By Robbie Butler

We received some great news recently when learning that our paper "Contracts, Pay and Performance in the Sport of Kings: Evidence from Horse Racing" had been accepted by the British Journal of Industrial Relations. The paper is co-authored with David Butler and Robert Simmons (Lancaster University). 

Using twenty year of data from 2000-2019 we explore the relationship between jockey pay and performance for flat racing in Great Britain. In essence, the work is an extension of Fernie and Metclaf (1999) and seeks to understand if  performance-related pay schemes can raise worker productivity with much of this increase due to worker sorting. The beauty of horse racing in the context is that it allows us to consider variations in the power of performance-related pay contracts which can be rarely observed in other employment settings.

Unlike previous findings, we find no evidence of worker shirking when the power of incentive contracts is reduced through jockeys switching from complete performance-related pay scheme into a salaried (retainer) contract. Moreover, salary contracts result in legacy effects with superior performance continuing for elite jockeys even after their salary agreements have expired. Amongst other things, we argue this is due to a reduction in monitoring costs. 

The acceptance marks our 4th peer-reviewed acceptance in sports economics over the past 10 months. It is also the 4th sport (rugby, football and boxing the other three) we have explored. I wish to thank attendees at the 2018 ESEA Conference in Liverpool and the 2020 NAASE virtual conference for their many helpful suggestions. 

Once ready, we will make a link to the paper available.  

By Robbie Butler

Horse racing seems to be the sport that dropped the curtain on sport quite late on these islands  (late March). The Cheltenham Festival inexplicably continued as normal until sport was called to a halt in the UK the following week. Irish horse racing went on for longer with Thurles being broadcast in free-to-air television in the UK. 

 The curtain was raised  again this week. With racing in the UK returning at Newcastle on Monday, and Kempton Park yesterday, the show is very much back on the road. The 2,000 and 1,000 Guineas will be held at Newmarket over the weekend, while Irish horse racing will return at Naas next Monday the 8th of June.

One noticeable difference to the before and after Covid break has been the reduction in prize money on offer. The table below provides an overview of some aspects of this. 

The difference between Ireland and Great Britain are listed. While not identical, there are similarities. British races will see an increase in prize money at the lowest end of the races. Class 5 and Class 6 races are now more valuable. This is not the case in Ireland. Maybe this is because about 2/3 of all prize money is sourced from exchequer funds. 

By Robbie Butler

In our latest post “Economic Impact of Sport in the EU” John explored the economic impact of sport in the EU. It can be seen from the bubbles in the graphic that Ireland is lower than in most countries, with sport accounting for 1.68% of total employment and 1.03% GDP. The impact that the cessation of sports fixtures as a result of Covid-19 will therefore be smaller on the Irish economy than it is in many other EU states.

It is interesting to consider this further.

There is very little professional sport in Ireland. The most recent CSO sports module in 2013 found that almost all sport in Ireland is non-professional. Rugby reported the highest number of professional/semi-professional athletes at 5.1%. Other professional sports people in Ireland are found in dance and gym related activities. Then there are the elite individual athletes that are either funded through Sport Ireland or very successful in their sport and are household names e.g. Shane Lowry and Katie Taylor spring to mind.

After rugby, the only other team sport with sizable employment is soccer. However, just 0.2% of players here are paid. The domestic league probably employees about 400-500 players on professional and semi-professional contracts. Clubs are now in serious financial trouble as fixtures have ground to a halt. The primary source of income is gate receipts and one can only wonder what is going to happen to players and other staff in the coming weeks. (More on this next week).

It is interesting to compare the current fate of the League of Ireland with another Irish sport – horse racing. Horse racing is not considered a “sport” but rather an industry in Ireland for data purposes and probably employees about 3,500-5,000 people directly. Indirect employment is much higher. If direct employees were included, the number of professional sports people working in Ireland would jump considerably.

Horse racing continues in Ireland – behind closed doors. Today Dundalk goes ahead. Tomorrow Thurles. Down Royal is on Sunday. Naas Monday. Clonmel Tuesday. Dundalk again next Wednesday. And Cork next Thursday.

Irish soccer cannot proceed like this. The reason racing can is because gate receipts are not terribly important. The broadcasting agreement with Racing TV trumps this. Irish soccer has no major broadcasting agreement. It suffers badly because of this.
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The domestic game in Ireland will require support if it is to survive. This might mean State support through Sport Ireland or elsewhere. No domestic league means no national team. No Euro 2021. No World Cup in 2022.

By Robbie Butler

In February this year I addressed the issue of Irish horse racing moving from its long-time home of Attheraces (now Sky Sports Racing) to Racing TV. The piece discusses a number of challenges for the move, particularly Irish racing's place on the new channel. After nearly one year of the new provider, some of the obstacles remain.

This week the Racing Post ran a article about television coverage of the Grade 1 John Durkan Chase at Punchestown on Sunday. In the piece, general manager of Punchestown racecourse and chairman of Horse Racing Ireland’s media rights committee Conor O’Neill,  said he was “very disappointed” that the race was broadcast on a split screen on Racing TV and lacked commentary until the final number of furlongs. 

The race shared the screen, firstly with a race from Huntington, and then Cork. As the Peterborough Chase at Huntington started before the John Durkan it took commentary from the English track. Once this ended, Cork replaced the English course in the split screen, with commentary changing to the John Durkan Chase at Punchestown. 

Of course, this only happened because of a delay of more than 10 minutes to the race at Punchestown. The race was due to start at 1.50pm. Huntington started as planned at 1.55pm and Cork 2.05pm. Because the John Durkan Chase did not start until just after 2pm, it was sandwiched between the 1.55pm and 2.05pm races.

But things may get worse. The 26th of December is the busiest day in the horse racing calendar. 11 meetings take place in Ireland and the United Kingdom. Racing TV have exclusive access to 8 of the 11 courses. One can understand the need for multiple split screens during the day, as it is impossible to sequence races so that they do not clash. And what if there is a delay?

​This is a little like an airport and landing slots. If a plane is delayed or not ready to leave it can miss a slot. Races courses won't wait however so races will proceed, later than planned, and clashes will be unavoidable. If may even be the case that three races are in running concurrently, despite the best efforts of organisers. 

There were just four meetings on Racing TV last Sunday. One has to wonder how a doubling of this to 8 can be accommodated on just one channel.

By Robbie Butler 

In 2005 the "Cross Country Race" was run for the first time at the Cheltenham Festival . Over a distance of about 3 miles and 6 furlongs, the race is probably the most easily recognisable at the 4-day Festival as horses tackle a variety of different obstacles including grass banks, hurdles, wooden fences and “cheese-wedges” (two grass banks with hedge rows on top).

Run on the in-field of the famous Cotswolds course, the race has become synonymous with Ireland.  13 of the 15  races at the Cheltenham Festival have been won by Irish-trained horses. In fact, only the Philip Hobbs’ trained Balthazar King has raised the English flag.

Not only have Irish trained horses dominated the race at the Festival, but so too have horses from this island dominated the trial races at Cheltenham. 8 of the last 9 Irish winners had been placed previously over the cross-country course at Cheltenham before winning the race at the Festival.

So, to the most recent running of a trial race, on Sunday the 17th of November.

10 runners went to post last weekend, and remarkably, not a single horse was trained in Ireland. This most-Irish of races was, for the first time, devoid of Irish interest.
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The data below presents the distribution of Irish to non-Irish runners in the November/December Cross Country Trial Race since 2008. In 11 of the 22 races between 2008 and 2019, Irish trained horses comprised at least 50% of the field. In December 2017, and both November and December 2018, Irish trained horses constituted between 63% and 71% of the field. One year on, November 2019, this falls to 0%.

One has to wonder whether this is Brexit in action? The deadline of the 31st of October 2019 was a mantra repeated again and again in recent months. Did this effect Irish trainer and owner decisions when deciding to enter horses in Britain? It does seem odd that an Irish dominated race would suddenly have no Irish interest.
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No sport on this island will be effected to a greater extent if and when Brexit happens. Maybe we are starting to see the industry adjust to a new normal.

By Robbie Butler

I had the pleasure of lecturing the Thoroughbred Horseracing Industries MBA class at the University of Liverpool this week. We discussed funding horse racing in Ireland and the possible consequences of Brexit. The group came from a variety of industry stakeholders throughout these islands. 

At a general level, horse racing in Ireland is in relatively good health. According to Horse Racing Ireland (HRI), Irish bloodstock sold at public auction was to the value of €161.5m last year. While racecourse attendances continued to decline in 2018, large racing festivals are starting to attract record attendances again in recovery-Ireland. Prize-money also grew by 3.9% to €63.5m in 2018. it should be noted, more than 60% of this is sourced from budgetary support. 

While this annual report is largely positive, Brexit cases a shadow over the (very near) future. The eight "No" votes last night in the UK Parliament means a hard Brexit in early April remains a possibility.

30 years of progress within Irish racing could be undone over night. Chief concerns are centred on the Irish bloodstock industry, animal welfare and the tripartite agreement between Ireland, Britain and France. It remains to be seen how this will be affected in the weeks ahead and it should come as a concern that Aintree 2019 might be the last as we currently know it. 

While Irish racing successes in Britain have probably never been as obvious, the next two weeks will dictate if this could continue into the future, or come to a crashing halt. 

By Robbie Butler

On the 1st of January 2019 Irish racing was shown for the first time on the newly launched Racing TV (formerly Racing UK). The move ended more than a decade of coverage by Attheraces (now Sky Sports Racing) and effectively placed Irish racing behind a paywall for the first time. 

I should be clear, Attheraces was not free to all Irish television users, but came as part of Sky's "Entertainment" pack – 90 channels that formed part of Sky TV's basic package. Other sports channels in this offering include Eurosport, Sports News and Sky Sports Mix. Up to the end of 2018, Attheraces had provided 100% coverage of all Irish racing. Not a single meeting nor race, at any of the 26 tracks on this island, failed to be covered live.

Some cited their concern, when it was announced last year Irish racing would move to Racing TV until at least 2023, and argued that the packed UK schedule might see Irish racing slide down the list of priorities. A recent piece in the Irish Examiner supports this view and cites a Saturday card at Gowran Park where races were short of lead-in time and lacked information of betting markets. Spilt screens were used during broadcasts, and some races were only joined midway through. The most damning of all was the failure to show any coverage of the last race at Gowran.

In the weeks leading up to it's launch, Racing TV advertised a price of €31 to Irish customers. If my memory is correct, the price was subsequently dropped to €12 for a promotional period, and can currently be purchased for €15 per month for one year. 

Aside from the fact that €31 is more expensive than my Sky Sports subscription, which provides access to many sports, and Irish racing does not get the same coverage as it has done previously, I fear there is a bigger problem for those selling the product. 

Pay-walled sport works because it is the only way to access coverage. Sky Sports has been a spectacular success since its launch in 1992 because it was the only way to watch live Premier League action until 2007. Since then it has been joined by others such as ESPN, BT Sport and soon Amazon; all also subscription channels.

28 days of Irish racing will be shown this year on free-to-air RTÉ. These include the biggest days on the Irish racing calendar and events such as the Irish Grand National and Irish Derby (which must be shown free-to-air),  Punchestown Festival, Galway Festival, Leopardstown and most recently Thyestes Day from Gowran.

Think of this comparison. If BBC or ITV had the right to show the 28 biggest Premier League games each season, how many people would subscribe to Sky Sport or BT Sport? The 28 would include Liverpool vs Man Utd, the North London Derby, the Manchester and Liverpool Derbies, Chelsea vs Arsenal all home and away, and a smattering of other games.

The business model works because this is not the case. Free-to-air customers have to waiting until 10.30pm on Saturday evenings to watch Match of the Day. While some would continue to pay subscription sports channels, I suspect the number of subscribers would collapse dramatically if free-to-air providers could cherry-pick the best games, as happens with Irish racing. 

From the perspective of the Irish racing consumer, long may the cherry-picking continue. 

By Robbie Butler

In the last year or so, I have encountered a number of research papers that focus on the economics of horse racing. This culminated in (what I believe was) the first ever horse racing session at the European Sports Economics Conference at the University of Liverpool last August.

Work in the area is now developing and members of this blog, as well as colleagues in the UK at the University of Lancaster and University of Liverpool are exploring the economics of horse racing. There is really so much to explore (e.g. labour markets, betting tax, efficient markets, government support of the industry, and the impact of Brexit).

Some focus has recently turned to UK’s pending exit from the European Union and the impact on the industry, but this has been limited. The scale of a hard Brexit, which is now becoming more likely by each passing day, has the potential to decimate the industry. Remember, this is an industry that only survives in Ireland thanks to generous Exchequer support each year. More than half of all public monies are then used as prize money at Irish racecourses. 
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I have explored the issue on prize money on a number of occasions in the past. While the biggest prize funds on offer are on the other side of the Irish Sea (see here and here) the average level of prize money across all tracks remains higher in Ireland. This is particularly obvious at lower grade racing and has encouraged English horses to travel to Ireland (see here and here).

The difference in funding may be set to grow further. Last week Arena Racing Company which owns and operates 16 racecourses in Great Britain, announced that it would be reducing prize-money by £3 million as a direct response to the British government's recent decision on Fixed Odds Betting Terminal (FOBT) stakes. Leading trainer Mark Johnston’s response to this decision was:

“The prize-money is quite ridiculous and the whole situation of Arc cutting prize-money in anticipation of a potential cut in the number of betting shops and funding due to the FOBT reduction, which is hypothetical at the moment, is out of order. It gets to a point where it’s just not viable to take a horse all the way to Lingfield for that sort of money”. 

Others have responded in a similar fashion to ARC's decision. This resulted in a reduced card at Lingfield on Saturday, and one race on the card not attracting a single entry! The solution to the problem may be reduced cards in the short run, but in the long run trainers may need to look elsewhere. Independently owned Chelmsford City Racecourse is being used as an exemplar to demonstrate the type of money that should be put on offer, at lower grade races, to attract entries. 

Of course, another solution is for more horses to travel from the UK to Ireland to compete. Generally, horses and labour flow one way and not the other. A glance at prize money on offer last Friday night at Dundalk (Ireland) and Lingfield (England) demonstrates the difference. 

Dundalk's 8 race card had an average prize fund of €8,543.75 per race. Lingfield's 6 race card reports a figure of just €3,839.75. 

The total amount of money on offer at the Irish race course was €68,350, which is some €45,000 more than the €23,039 on offer at the English track. 

​All things equal, this should incentivise trainers in the UK to send more horses across the Irish Sea to race at venues such as Dundalk.

However, the extent to which this may now happen will largely not be decided to prize money on offer at Irish courses, nor reduced stakes at FOBTs in the UK, but rather events in Westminster over the coming weeks.

By Robbie Butler

Nearly two years ago RTE's Conor McMorrow wrote a piece entitled "Unease in Irish racing industry over Brexit hurdle". The story ended with Irish trainer Dermot Weld saying:

                 "When we had the original old border, there was always the danger when you brought horses to the North                        that they could be held up for a while. That's a long time ago. We don't need that again. We need free                            borders." Those comments sum up the views of an entire industry, if not an entire country".

Last night, following a Commons defeat on the Withdrawal Agreement, the United Kingdom government is no closer to securing a deal with the European Union once the country leave the trading bloc on the 29th of March this year.

To say this is a problem for the horse racing industry, indeed almost every business on the island of Ireland, would be an understatement. As of today, the use of World Trade Organisation (WTO) rules or a hard BREXIT, seems to be the most likely outcome, something that would not have been expected in June 2016.

This week, well-known Irish trainer Ted Walsh added to the debate and said on BREXIT that:
              "We rely on them (the UK). They have been good neighbours but we rely on them for most of our exports, a                   lot of imports and a lot of jobs for people".

There is probably not a sport on this island that is as connected as horse racing when it comes to the relationship between Ireland and the UK. As Walsh says, Ireland exports a large volume of product to the UK. The breeding industry is largely dependent upon UK customers. The reverse is also true; buyers in the UK depend on Ireland to breed horses. Ireland also exports labour to the UK in the form of jockeys, trainers, stable staff, etc. 

The relationship is further underlined by Horse Racing Ireland's (HRI) governance of both Down Royal and Down Patrick, two races courses located in Northern Ireland that are managed and partially funded by the Irish semi-state HRI.

And on a practical level consider this. The 2019 Cheltenham Festival starts on the 12th of March this year. One of the great aspects of the event in the past decade or so has been the English vs Irish dynamic to the races. The crowd is also littered with sports tourists from this island and the term "Irish invasion" is often used to describe the volume of Irish that attend the Cotswolds. People and horses will travel freely again this year.

Less than 4 weeks later, the Grand National Festival will start. Last year the first 4 horses in the race were Irish trained. Will this be the case this year in a post-EU Britain? Hardly if things keep going they way they are. 

Cheltenham will be the same this year. Aintree might not be. Everyone will lose if this is the case. 

By Robbie Butler,

Following on from our successful workshop last week on sports betting, it is rather appropriate that we re-start our blog with the traditional Galway Races exercise that puts the Fama's Efficient Market Hypothesis (EMH) to the test.

Last year we branched out and followed two leading trainers. A profit of more than 31% was reported for Willie Mullins, but Dermot Weld followers would have incurred a loss. As this is our 6th attempt, and with last years draw, the scorelines stands at 1.5 - 3.5, in favour of the bookies. Not deterred, we go again this evening, and for the next six days. 

The rules are as follows. A hypothetical stake of €2 (to win) will be wagered on on all Weld and Mullins trained runners shorter than 4/1, and €1 each way on all those 4/1 or greater. Guaranteed prices are assumed. The trainers will be evaluated separately. 

Updates during the week will follow.

2018 is not a year to forget quickly. An excellent return is reported. In total, 156 horses were wagered on. Mullins saddled 112 and Weld 44.

​Following both trainers resulted in a profit of €56.32 for a €2 stake per horse. That's a 36.1% return. Things were even better for Mullins alone, with a reported profit of €71.52 for a €2 stake. This is a massive 63.9% return!