Equine flu: What is the cost to horse racing?

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Horse racing is facing its biggest health – and financial – crisis in 18 years, with the industry forced to close down in the UK due to an outbreak of equine flu.

More than 100 stables remain on lockdown, with six days of meetings cancelled, as the authorities work to contain an outbreak of the highly contagious illness.

The industry, which is worth an estimated £3.5bn to the UK economy a year, and the wider sector employ close to 100,000 people (with about a fifth directly employed). It has not experienced such a shutdown since the the foot-and-mouth crisis of 2001.

Racing is the second-best attended sport in the UK after football, and supports a number of other ancillary sectors, from horse training and transportation, to catering, media coverage and gambling.

‘Saving fixtures’

Media reports have put the overall cost to racing at between £150m to £200m, with concerns that the shutdown – including the Super Saturday meeting at Newbury – will cost betting firms £2m a day.

The outbreak comes less than five weeks before the start of this year’s Cheltenham Festival, which is followed by Aintree and the Grand National at the start of April.

And there are fears that unless the outbreak is contained these high-profile showpiece events could be under threat.

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The Cheltenham Festival attracts tens of thousands of horse racing fans from the UK and Ireland

More than a dozen meetings between 7 – 13 February have been called off, and the British Horseracing Authority (BHA) says it will make a further announcement on Monday.

“I don’t want to be complacent but I think the best way, in all our experience, to ensure we manage things, is to lock down at the moment,” says the BHA chief executive Nick Rust.

“Then we can identify cases if any more emerge. It gives us the best chance to isolate, and make sure our [future] fixtures are saved.”

Australian crisis

Millions of pounds are at stake if more races have to be called off. The BBC’s racing correspondent Cornelius Lysaght says: “Any further shutdown – Cheltenham is again looming – would clearly have a considerable effect on the sport but [also] on all the ancillary industries that go with it.”

When the UK was hit by foot-and-mouth in 2001, the estimated cost to the local Cheltenham economy by the cancellation of the festival was put at £30m. Meanwhile, bookmakers were estimated to have lost £100m because of the call-off.

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Media captionEquine flu: Inside Newmarket laboratory which detected the outbreak

And when Australia was hit by equine flu in August 2007, the industry was shut down for six months and the country was not declared free of the disease until 10 months later.

At the beginning of the outbreak, containment and eradication cost A$500,000 (£273,000) a day, while wider “associated income” losses hit A$4.6m (£2.5m) a day.

Sydney’s spring racing carnival, which runs from August to October, was cancelled as the bottom fell out of the racing industry.

Nipped in bud?

Alan Switzer, from Deloitte’s Sport Business unit, monitors the racing industry and produced a major report for the BHA six years ago.

“The initial financial cost will be to the racecourse, and then flow through the sector affecting things like betting and media revenues,” he says.

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Bookmakers will be badly hit by the shutdown

He points out that a reduction in gambling income will also mean a reduction in the amount paid to the industry via the betting levy.

“Hopefully the shutdown will not run for weeks. What the BHA have done is right, with regards to both animal welfare and business,” he says.

“If they can have nipped things in the bud, they will have experienced a few days of disruption but managed to secure the medium and long-term future of the industry.

“The industry could withstand a short-term blow of this nature, but if Cheltenham were to be cancelled it would be a serious blow, both for the racing industry and wider economy – transport, restaurants, entertainment, hotels – which benefit from the festival.”

Costs and refunds

Harriet Collins from Newbury Racecourse – whose cancelled weekend event is seen as an important warm-up for Cheltenham – says the “very disappointing” outbreak is going to be costly to the industry.

“There are always going to be costs associated with losing any race days,” she says.

She said the Berkshire course had the necessary contingencies in place, “including insurance” to cover racing cancellations.

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Kempton Park Racecourse is closed

In addition, race-going ticket holders have been quickly updated, and will now receive a full refund.

She said the goal for the BHA was to balance horse welfare to ensure “we don’t lose [racing] for a longer period of time”.

At Musselburgh, near Edinburgh, the course has lost its richest-ever jumps meeting, taking place this Sunday. If the venue’s next meeting, scheduled for Wednesday, goes ahead there will be free admission for all racing fans.

‘Financial damage’

After the cost of admission, catering is the highest area of expenditure for most race-goers.

Ivor Spreadbury runs the annual National Racecourse Catering Awards, having been involved with the sport for 30 years and employed in catering for half a century.

He says equine flu could cost the catering industry hundreds of thousands of pounds, if not more.

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Eating and drinking is a big part of the race-going experience

“This is a huge blow for the industry, and certainly will have a major effect. It is very serious,” he says.

“Without a shadow of a doubt it is going to cause financial damage. The ultimate cost will not be known until we know how long the lockdown is in place.”

He said the racecourse catering sector spanned big firms like Sodexo, Arc, CGC, and Jockey Club Catering, via medium-sized outfits to one or two-person independent operators.

Mr Spreadbury says that all aspects of catering will be affected, including fine dining, cafeterias, fast-food concessions and bars.

“They are all going to be hit across the board.”

‘Disappointing’

The big bookmaking firms saw their shares hit on Thursday, and were down again slightly on Friday. At close Ladbrokes-owner GVC was down 1.45%, William Hill was down 0.92%, and Paddy Power Betfair lost just 0.08%.

Venetia Williams is a trainer specialising in National Hunt racing, and was due to have horses running during the abandoned period.

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Racecourses are standing silent across the UK

“We missed a large part of the week before through frost and snow, so missing another week is a nuisance and a pain,” she says.

“Particularly for us, because the horses are running really well at the moment.

“This to us is the ‘high season’, so obviously it is disappointing from that point of view.”