Simon Bazalgette – ON THE RIGHT TRACK

unnamedSimon Bazalgette, chief executive of The Jockey Club talks about  a new TV rights deal with ITV and the prospects for a new era for racing in the UK.

Next year sees the end of an era when the UK’s Channel 4 free-to-air channel relinquishes its coverage of horse racing after 32 years in the saddle.

Instead the contract will be held by ITV Sport which has committed to increasing output to 94 days  with most of the showpiece events screened on its prime ITV 1 channel with others on its ITV 4 digital outlet.

“It wasn’t an easy decision to take because Channel 4 had been there a long time. But we had a lot of options and that hasn’t always been the case,” said Simon Bazalgette, chief executive of the Jockey Club which runs 15 leading UK race courses, making it a powerful voice within Racecourse Media Group, the organisation set up to manage the media interests of 34 courses and which was responsible for doing the terrestrial deal with ITV sport.

ITV was reported to have paid in the region of £30 million ($39m) for its four year deal which starts on January 1.  For the channel it represents an increasingly rare sporting success having lost  properties its UEFA Champions League rights to BT Sport.

While the sum may not be huge in relation to some other sports deals it represents a significant turnaround in the media fortunes of  racing which has had to work hard to re-build its following and standing as the nation’s second most popular spectator sport.

“Ten years ago the rights weren’t thought to be at all valuable but Channel 4 thought they should be,” Bazalgette said.

“Back then we had to pay Channel 4 to get on air and that wasn’t a good position. That has been sorted over the years   but we knew we needed to build a younger audience. Five years ago Channel 4 decided it wanted all of the racing and did a deal to acquire the very top events which had been with the BBC.  It was a good commercial deal driven by the idea that Channel 4 would promote and grow interest in the sport,” he said.

That’s easier said than done in a fast-changing media universe and , although Bazalgette is quick to defend C4 as ‘ good partners,’ reports in the specialist racing media suggested that  audience figures for the major events were  significantly down on those achieved by the BBC.

And with the explosion in TV advertising around sport by betting companies since a change in the law which took effect in 2007, competition  for the rights was more or less assured.  While Channel 4 was anxious to hang on to the contract, Sky joined  ITV Sport for the final showdown leaving Racecourse Media Group the relative luxury of being able to think beyond the cash on the table and make its decision based on what each bidder could do to promote the sport.

“Channel 4 had done a good job and built a younger and more upmarket audience but ITV have an inherently greater reach and bigger mass market audience,” Bazalgette said.

“ITV also picked up on the fact that we didn’t want the typical relationship between broadcaster and rights owners where we do the deal and they just go away and put it on TV.  We wanted more engagement in the overall promotion of the sport, someone who will be a real broadcast partner.

“We are getting that from ITV who are doing a lot of groundwork to support their commitment and there is a lot of engagement with us.”

The domestic terrestrial deal may come to be seen as a game changer and another feather in the cap of Racecourse Media Group as  it is certainly the case that it is the major shop window for the sport.

But the media environment around racing in Britain is as complex as you’ll find anywhere in world sport and overall success is only achieved by putting all the pieces of the jigsaw together carefully to maximise the commercial power of the operation.

“Racecourse Media was set up as a co-operative structure to look after the media interests of 37 of the  courses in the UK,” explained Bazalgette who was the organisation’s founding chairman.

“Its job is to manage media and data rights and gives the member courses a dedicated media management team.

“Of course we might have used a third party agency for some deals such as the international terrestrial rights but, inevitably, their interest would be in the money rather than maximising the audience.  If it comes to it we prefer to take less money but a bigger audience because that plays to our international sponsors.  We can drive that to make it work in the best way for us.

“The key is to look at things in the round and how every decision impact on our commercial business,” he said.

Racecourse Media Group also  owns Racing UK, a satellite channel for hard core racing aficionados which currently has in the region of 50,000 subscribers  paying £25 per month and generating some £15 million per year.

That, says Bazalgette, is a completely different service proposition.

“It needs to speak to people who are already knowledgeable about the sport and people within the sport. It needs a different presentation to that or the terrestrial service,” he said.

Then there’s Turf TV, a service for 10,000 betting shops in the UK and Ireland which will itself undergo a transformation in 2018 when it will switch to a license model with the bookmakers paying a fee and taking on responsibility for the output.

“The relationship between racing and the betting industry is symbiotic with over $1 billion a year being wagered on racing in the UK and, of course, the big change has been the shift from betting through retail shops to online betting.

“Racecourse Media licenses coverage of racing   to betting industry customers for online and mobile use and delivers 70 million streams a year through betting websites. That makes it one of the biggest online streaming companies in the world,” he said.

And because racing and betting are international industries, there is also a ‘parallel universe’ of services to be supplied to betting customers around the world.

“We provide video and data to most of the big race betting markets around the world with revenues being based on a proportion of the betting spend,” Bazalgette explained.

“In all around 3 per cent of betting turnover comes back to the host track.”

All sports marketing professionals have to deal with the fragmentation of the media market but Bazalgette says that the terrestrial market is ‘holding up well’ and that   part of ITV’s appeal is that it will deliver a multi-channel offering under a single brand.

“It’s a question of cannibalising yourself and controlling it or letting others do it for you,” he said.

In common with his peers Bazalgette also sees the continued migration to mobile digital as key to the future.

“That’s where the growth is and you have to be leading with a mobile offering nowadays. If you put mobile first other things will come off that,” he said.

“It is about creating a better and more relevant customer experience with more analysis and more data and even augmented reality.”

The ability to harness new technologies will, naturally, be important to the future of racing and data will be central to that.

“Technology allows us to produce more performance data and analysis and that, in turn, can deliver new betting opportunities.  There will be new ways of betting and I certainly think we will see more ‘in-play’ betting where it’s possible to bet on outcomes other than the result of the race itself, such as one particular horse beating another or bettering a particular time.”

An easier and more accessible ‘in-play’ offering  might well help racing to make up some of the ground it has lost to football in the last 15 years. Where once it was the undisputed king of wagering sports in the UK football has now taken over thanks to in-play and the role of the smartphone as a 24/7 betting shop in the hand.

The relationship between betting and racing in Britain  is due to take a significant step next year when  the 50 year-old Levy system , which sees bookmakers paying  back to the sport a proportion of their revenues from shops and on-course  outlets is scheduled to change.

While the system may have worked 50 years ago it has not moved to take account of new technologies and does not cover offshore online betting, leaving betting firms  to keep all of their revenues without benefiting the sport.

“In other parts of the world horserace betting is owned by the racing industry but in the UK it has always been a free market which means that anyone can enter. The levy was the way of ensuring that racing received a return for providing the product and we expect a new system to be in place form April 1 next year,” Bazalgette said.

With a solution to that fundamental financial conundrum on the horizon and the new domestic TV deal providing an enhanced level of expectation, things are looking good for Bazalgette and The Jockey Club right now.

Last  year’s financial  reports show a  seventh consecutive year of turnover growth to a record  £183.3 million ( $ 238.3m), operating profit  at £21.9 million ( $ 28.47m) and record attendance of a little under 2 million at its  15 courses.  This month The Jockey Club announced its courses would stage 341 days racing in 2017.

None of this has happened by accident.  Since Bazalgette joined the organisation, The Jockey Club has been working to give the sport a 21st century makeover without losing sight of its long and rich heritage.

Since day one he has focused on creating a better race-day experience for fans and supported innovation such as the introduction of the QIPCO British Champions Series, designed to bring the finest flat racing to a crescendo at Ascot in October where the best jockeys and horses will compete for more than £40 million ($52m) prize money.

“I am very optimistic about the future. We have worked to improve the fundamentals and The Jockey Club and others will grow from that,” Bazalgette said.

“So far as The Jockey Club itself is concerned, a lot of what we do is very transactional and I think we now need to be more brand-led and invest more in the brand. We have not necessarily marketed ourselves in that way yet.

“Racing is still fragmented and we should think more in global terms.  Our terrestrial rights sales show that there is a lot of interest around the world in markets including the Gulf States and Middle East as well as France, Australia and North America.

“There are big opportunities coming down the track and as long as we stay relatively unified and strong then we can all keep growing.