Prize money at Jockey Club Racecourses in 2024
A message from Nevil Truesdale, Group Chief Executive of The Jockey Club
As I am sure you will know from your own experiences, many businesses inside and outside our sport are facing a number of unprecedented financial headwinds and being forced to make some difficult decisions as a result. The Jockey Club is not immune from these challenges and, like any prudent business, we are also having to constantly adapt.
The cost of living crisis continues to impact both our own revenues and, those who invest across our business, with inflationary factors significantly affecting our operational costs. At The Jockey Club a few examples of this include the cost of energy forecast to be £2.2million higher in 2024 than in 2019, our business rates having increased by 28% in 2023 to £5.1 million with a further 6.8% in 2024, the National Living Wage rising 39% since 2019 which impacts our staffing costs and food and non-alcoholic beverage costs rising by 7% in the year to January 2024.
With a lack of any meaningful growth since early 2022, according to the Office for National Statistics, high interest rates are having a significant impact on low and middle income earners coming to the end of fixed rate mortgages, with rising energy prices and food inflation impacting the discretionary spend of many of our traditional racegoers.
A combination of all these factors was keenly felt at the Cheltenham Festival, our largest single commercial driver in terms of events, and which has seen its own cost base - everything from staffing to energy and food - rise by 25% since 2022 and 50% since 2019. In addition our online media revenues remain uncertain due in part to the proposed yet ongoing affordability checks. In this regard our operating model is very different to other racecourses and racecourse groups, which are not necessarily impacted by the current economic climate in the same way.
You will recall that we announced at the start of the year that we had budgeted to offer £60.1 million in prize money in 2024, contributing £31.8 million of that from our own funds, while highlighting at the time that in any year our prize money is subject to business performance and is constantly reviewed.
Unfortunately, as a result of some of the financial targets we set ourselves for the start of 2024 not being met, it is necessary to reduce this planned prize money at our racecourses, which had been an increase on last year, between the start of May and the end of December. This will see our executive contribution reduce by around £750,000, or 2.3%, during this period, bringing the amount of money The Jockey Club invests in prize money this year to just over £31 million, the same level as in 2023 and still a very significant increase when compared with recent years. This will result in a revised overall prize money offering of around £58.6 million at The Jockey Club’s racecourses in 2024, a total reduction of approximately £1.5 million on the initial forecast at the start of the year.
This has been a difficult decision to reach for a number of reasons. British racing relies greatly on the support of owners investing in racehorses and, therefore reinvesting as much money as possible into prize money to maximise your returns, will always be a priority for The Jockey Club. While we are also committed to ensuring that the on-course experience for owners on racedays is not impacted in any way, we have made a great deal of progress in reducing our underlying costs in other areas and worked hard to minimise the impact on prize money, meaning that while this course of action is sadly now necessary, our prize money reductions are far less significant than the savings we are having to make elsewhere.
It is vitally important to us that we remain open and transparent throughout the year with those who work in and contribute to the horseracing industry and that is why we are communicating this news proactively at the earliest opportunity.
I appreciate that you may have a number of questions and I know these will be answered in due course, when more details will be published concerning which fixtures and specific races will be run at revised prize money levels. However, what I can assure you is that The Jockey Club has considered the importance of owners at all levels of the sport when making these decisions and we have revised our prize money levels accordingly.
Finally, I would like to take this opportunity to thank you for all you do for British racing and for your ongoing support and understanding, while also reassuring you that we remain committed to doing everything we can in what remains an exceptionally challenging set of circumstances.
Kind regards,
Nevin Truesdale
Group Chief Executive
The Jockey Club