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From the RP:
REDCAR, whose prize-money levels prompted calls for boycotts from trainers last summer, was dealt another blow on Thursday when the Horsemen’s Group blackballed the racecourse from its new prize-money bonus scheme.
The independent track has paid the price for failing three tests which would have qualified it to apply for a £5,000 bonus for winning connections in one of 96 races nationwide this year.
For me this £5k bonus is just a vehicle which effectively allows THG to behave like a cartel. They started off these prize-money campaigns with brash and open threats of boycotts. Obviously somebody with a smidgin of legal nous had a word in their ear regarding cartel-like behaviour and they’ve since toned down the public statements.
But it seems that there is little change in the ‘strategy’ of trying to discourage their members from running horses at certain courses.
Perhaps forum member ‘wit’, who comments from time to time on legal arguments here, would care to offer some thoughts?
Seems fair enough to me, they don’t have to give the money to any tracks. Maybe Redcar should pull their finger out.
I thought a cartel had to be more than one entity (company, interest group) who control a market, getting together to exploit their control in an illegal manner. For example, if only four airlines were licenced by the authorities to fly between London and New York, and they conspired together in secret to charge the same high price, or the same minimum price, so that they could all make huge profits because there was no competition outside the group of four, then they would be a cartel.
The Horsemens Group is a single entity giving their own money to some racecourses that meet their openly published criteria.
If I give my own money to charities that help cancer sufferers I would not want to be called a cartel, or denigrated in any way, because I did not give money to charities that help old people, educationally deprived children or sick animals.
Redcar are perfectly entitled to run their business as they see fit. But if that disqualifies them from receiving grants from the EU, the local council, the regional business development board, and The Horsemen’s group, then that is their choice.
Marginal Value
23 Mar 2012, 14:22
I thought a cartel had to be more than one entity (company, interest group) who control a market, getting together to exploit their control in an illegal manner.That, broadly, is my understanding too. Although this £5k prize competition is not, in itself, illegal, I believe this declared strategy of THG to deprive racecourses of a product
unless the course meets the price fixed by THG
, is legally questionable.
To deliver such a boycott, THG needs the collusion of trainers,owners and jockeys – "more than one entity".
I wonder if any course, or indeed the RCA, ever questioned the legality of such an approach?
I don’t see how the bonuses being offered by the Horseman’s Group can be considered a boycott. They are merely an incentive to run in particular races. Do sales races amount to a boycott of those courses that don’t have them?
Redcar failed to qualify to APPLY for the bonus rather than their application being refused according to your OP. Blackballing occurs by process of voting, in this case they did not get to the voting stage.
Although Redcar is the only course classed as ‘unclassified’ by the HG, the following courses are also ineligible for the HG bonuses:
Newcastle
Thirsk
Leicester
Yarmouth
Bath
Catterick Bridge
Brighton
Chepstow
Well said Tuffers , this is much ado about nothing
its all about choice essentially
Ricky
I seem to remember reading in a report that Redcar was one of the courses mentioned that was suffering particular financial problems and struggling to find money to keep prizemoney levels at healthy levels.
Seem to remember that it was suggested that Redcar was being tipped as one of those particularly vulnerable to closure in the current financial situation facing courses during the recession.I seem to remember reading in a report that Redcar was one of the courses mentioned that was suffering particular financial problems and struggling to find money to keep prizemoney levels at healthy levels.
Seem to remember that it was suggested that Redcar was being tipped as one of those particularly vulnerable to closure in the current financial situation facing courses during the recession.Redcar Racecourse’s last accounts were filed in August 2011 relating to the financial year which finished 31 December 2010.
Net worth: £2,359,923
Shallow decreasing trend 2005 – 2007, then fairly level 2007 – 2010Cash at the bank: £155,070
Sharp decrease from £265,000 in 2005 to Zero in 2006, then Zero 2006 – 2009, now £155,070Total current assets: £338,728
Sharp decrease 2005 – 2006, gentle increasing trend 2006 – 2010Total current liabilities: £172,292
Increasing from £307,907 in 2005 to £1,161,087 in 2009, then sharp decrease to £172,272 in 2010They look as though they will not worry about the odd £5,000. Although they are not as rich as Bath (Net worth: £3,680,313), they appear to be in better health than Nottingham (Net worth: Minus £209,703).
As I understand, where the BHA is the ROBL:
– Racecourses
-Owners
-Breeders
-Licensed Persons (trainers, jockeys, etc),the Horsemen’s Group is the OBL.
This suggests they have something to say to the R.
Sure enough, the OBL have ranked the R as regards prize money, on metrics of:
1/ the percentage of their races which meet the OBL’s underlying tariff;
2/ the percentage of a course’s total prize money which derives from non-Levy funding (the “executive contribution” made by a racecourse from its own coffers);
3/ the average amount of executive contribution per fixture.
“Partner” racecourses meet all three criteria, meaning that the OBL is actively encouraging its’ members to support them whenever possible.
"Associate Partner" racecourses meet one or two of the criteria, meaning the OBL encourage its members to support them when individual races they stage meet or exceed tariff.
"Unclassified" racecourses meet none of the criteria.
There’s a list here of which racecourse is in which category:
http://www.racehorseowners.net/en/news/ … tners-flat
Redcar is the only "Unclassified" racecourse, implying OBL does not actively encourage its members to support it.
What’s happened now is the OBL has invited "Partner" racecourses to apply for support from the Horsemen’s Group Bonus Scheme, under which 96 races during the 2012 Flat Turf season will see an additional bonus payment of £5000 made to winning connections.
According to the OBL chairman: “The Bonus scheme is a great way of incentivising racecourses to become Partners, as well as being a way of rewarding our members for their support of the Horsemen’s Group. Clearly, we’ve already had a large number of racecourses wanting to get involved, and I would hope that once we have selected the races we want to back, our members will step up to the mark by ensuring that there are tremendous fields for those races.”
Stepping back a bit, according to the Levy Board 2010/2011 annual report in 2010 contributions to prize money were:
Levy Board – 51m
Sponsors – 14m
Owners – 15m
Racecourses – 16mThe Levy Board is a statutory body; the rest are private bodies or associations.
The BHA is also a private body, albeit one that is quite powerful and important and necessary to anyone wanting to get involved in horseracing in the UK.
The OBL is in neither of those positions.
It is as strong as its constituent member associations. As I understand it, it is not a legal requirement of participating in racing in the UK to join any of those associations – Racehorse Owners Association, National Trainers Federation, Professional Jockeys Association, National Association of Stable Staff or Thoroughbred Breeders Association .
I don’t know what percentage support each of those associations in fact gets from the category of racing participant in its name ?
Also, the OBL has worded its campaign in terms of carrot rather than stick – active encouragement of what it sees as "the good" rather than calling for a boycott of what it sees as "the bad", thereby sidestepping any accusation of it trying to interfere with contractual relations in any legally actionable way.
Is the OBL in so dominant a position that its carrot and its stick can be said to amount to the same thing – serious impact on anyone ignoring its demands, to the point of interfering with the free operation of a relevant market (the ability of racecourses to "buy" runners for their races at the cheapest price possible) ?
Does the OBL’s action force Redcar in practice into the position of either having to increase the price it pays for its runners beyond that demanded by the free market, or else be boycotted out of business ?
Have OBL recommendations been ignored in the past, with horses running in races and at tracks despite non-approval by the OBL ?
Hi Wit
Good post. Just picking up on a couple of your comments.
On the issue of membership of the bodies that comprise the HG, I’m sure there is a side issue of drumming up more members for these bodies. If the horse’s owner isn’t a member of the ROA for example then the bonus won’t be paid out so there is a big incentive to join the ROA if you are entering your horse in one of these races.
It’s fair to say that there has been no real ‘united front’ on the non-entering of horses in races which fell below tariff. The fact that every AW race this season met the tariff must be, to some extent, testament to the negotiating power of the HG, although even meeting tariff is a pretty low bar in prizemoney terms.
I thought a cartel had to be more than one entity (company, interest group) who control a market, getting together to exploit their control in an illegal manner. .
Could a Cartel be bookmakers fixing starting prices that they all gain from at the disadvantage of the punter? Or not self pricing, but shadowing the prices of "competitors" so there is no competition on price. Or sharing information to restrict the market so that more shrewd punters are avoided and not allowed to bet. Or setting terms and conditions that are identical and avoid any real competition on price. Or going on mass overseas to avoid Levy which helps UK racing to be run honestly – so adversely effecting the chances of UK punters to obtain a fair price and a fairly run race.
There may even be some cash back. Third parties – including competitors, customers and consumer groups – can also bring damages claims against the business. But there is a loophole they only have to confess to OFT and they are off the hook. In USA they would be banged up for 150 years.
UK Government definition of Cartel:
"Cartels
A ‘cartel’ generally refers to:directly or indirectly fixing prices between two or more competing businesses
limiting or preventing supply or production between competing businesses
dividing up customers or prospective customers between competing businesses (also known as ‘market sharing’) – ie where two or more businesses agree not to poach each other’s customers or compete against each other in certain sales territories
in response to a request by a third party to tender for a contract, an agreement between businesses as to whether or not to bid and/or as to the terms on which they will bid, eg an agreement that one or more of them will not bid or that one will put in an artificially high price so another business can win the contract
Cartels are illegal under both civil and criminal law. They are prohibited under Chapter I of the Competition Act 1998 and Article 101(1) of the Treaty on the Functioning of the European Union. Where an individual does so dishonestly, it will also be a criminal offence under the Enterprise Act 2002 to engage in cartel activity.If your business is found to be a member of a cartel, it could be fined up to 10 per cent of its turnover. In some cases, individuals within your business could receive an unlimited fine or a prison sentence of up to five years. Company directors may be disqualified from acting as a director for up to 15 years.
Third parties – including competitors, customers and consumer groups – can also bring damages claims against the business.
However, if a business ends its involvement in a cartel and informs the Office of Fair Trading (OFT), it may be granted immunity or a reduction in the financial penalty under Chapter I and Article 101(1). Its employees may also qualify for immunity from prosecution and from director disqualification. See the pages in this guide on reporting cartels to the Office of Fair Trading and the Office of Fair Trading Leniency Programme and Informant Reward Programme.
wit, many thanks for responding at such length. On the three points you raise:
Is the OBL in so dominant a position that its carrot and its stick can be said to amount to the same thing – serious impact on anyone ignoring its demands, to the point of interfering with the free operation of a relevant market (the ability of racecourses to "buy" runners for their races at the cheapest price possible) ?
Although they’ve toned down considerably their early announcements urging boycotting of certain courses, there might well be private ‘lobby briefing’ against such courses. Paul Dixon and Alan Morcombe’s spots might be camouflaged in public but I suspect they burn as vividly as ever when the press are not around.
Does the OBL’s action force Redcar in practice into the position of either having to increase the price it pays for its runners beyond that demanded by the free market, or else be boycotted out of business ?
Perhaps not in an open and explicit fashion but implicit in this exclusion as a partner or associate is a branding of Redcar as being not worthy of hosting the THG ‘product’.
Have OBL recommendations been ignored in the past, with horses running in races and at tracks despite non-approval by the OBL ?
Numerous times, doubtless to the huge frustration of The Horsemen.
Perhaps the main reason the boycott campaign has gone a bit quiet is that THG is trying to figure out how best to sort out its joint responsibility for exploiting the commercial value of fixtures – a duty it shares with the RCA, on whose members it attempts to impose increasing demands. It should be interesting watching how this alliance of cat and dog decide how to share the spoils.
This is just another round of Anti Horsemen’s Group stuff from Joe; it seems clear he doesn’t like them, and that is his right. We don’t all have to like the same things.
To say
I believe this declared strategy of THG to deprive racecourses of a product unless the course meets the price fixed by THG, is legally questionable.
is nonsense.
Why only the other day I went in a shop and wanted a chocolate bar, and they deprived me of that product, unless I was prepared to meet their unilaterally imposed price of 75p
cjboy, I’ve nothing personal against the people running THG, it is their blundering, foolish boycotting strategy I thoroughly dislike and their way doing business.
Fortunately their members frequently make an @rse of those at the top by completely ignoring this daft policy when it suits them:
From today’s RP:
REDCAR appears to have had the last laugh after being given the only "unclassified" rating by the Horsemen’s Group in its latest tariffs initiative.
Monday’s feature, the Come Racing Again on EasterMonday Handicap, falls £1,300 under tariff but the increased £5,000 pot, upmore than £1,000 from last year, has attracted the day’s biggest field of 15.
The other six races tie tariff levels and Redcar’s first meeting of the year has 64 runners on watered ground that is still firm in places.
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