A day at the races

The Jockey Club has gone through a transformation over the last few years culminating with the transfer of its responsibilities for the regulation of the sport to the British Horseracing Authority. The Jockey Club Racecourses themselves have matured from merely the grounds where races take place to being multi-functional locations attracting all kinds of interest from both racing enthusiasts and leisure customers with. Chief Executive Andrew Coppel talks to CXO about this incredible business transformation.

When Andrew Coppel was approached by The Jockey Club to take on leadership of Jockey Club Racecourses, it was too good an opportunity to turn down. “I’ve been interested in racing since I was quite young,” he muses. “Not in the gambling so much but the actual sport. I knew nothing about how racing was managed but it’s been hugely enjoyable and challenging.”

While you might not be familiar with this division of the Jockey Club, Jockey Club Racecourses own 14 racecourses in all. “Contrary to what most people think, we have a significant business to manage,” Coppel points out. “We have a considerable turnover: in 2006 turnover was £80 million, £68 million from racing and £12 million from non racing. Our operating profit was £39 million; £33 million from racing, £6 million from non-racing.” When 35 percent of your turnover comes from people coming through the turnstiles, you need a professional and experienced team to manage it: exactly what Jockey Club Racecourses has in place.

The changing face of racing

A lot has changed over the years, from back in 1964 when Cheltenham became the first racecourse to join the group, which was then known as Racecourse Holdings Trust. Today, Cheltenham is a huge brand as the leading jump racing venue in the country, indeed the world, the highlight of which is the Cheltenham Festival in March. As well as the status of the racecourses changing, ensuring the long-term success of the enterprise has required a paradigmatic shift in thinking, according to Coppel. “We’re operating in an increasingly competitive leisure environment, where currently leisure spend is under pressure from higher inflation and higher interest rates. We have had to be more commercial to maximise cashflow, which then gets reinvested in the business to upgrade facilities, to meet the increasing demands of our customers.” By customers I don’t just people who come through the gate but the jockeys, the owners, the trainers, the media, the bookmakers, the racehorses themselves in terms of turf management: they all have to be looked after, which is a demanding task.”

Considering all the people whose welfare Coppel and his team must consider, he is lucky his employer doesn’t have to pay dividends to a shareholder. As all profits are totally reinvested in the business, The Jockey Club operates in a circular process of cash generation and reinvestment, enabling them to upgrade facilities. “As a result we are making the business more commercial, while building on what’s been achieved in the past 40 years,” he says with pride.

This increasing focus on the business as a commercial venture has been a result of a change in culture at Jockey Club Racecourses, and has been a great success to date. “The racecourse teams’ response has been enormously encouraging, also our sales and marketing initiatives have been more focused on the customer,” he adds. “We’re now segmenting our business, and we’ve undertaken significant research on pricing issues so we can make more intelligent business decisions in that respect. We understand the importance of service to the customer, which to a degree is outside our control as there are outside contractors for food and beverage.” But, as Coppel says, it just means they have to work closely with them.  “Significant progress has been made but there is still untapped potential”, he commented.

Another way they have streamlined their processes is by being more selective with investment. As a result, they have been able to deliver significant projects on budget and on time; Coppel mentions Aintree’s £35 million facilities to exemplify this. “Aintree now boasts two new grandstands, an equestrian centre, weighing room and press centre. Our general understanding of the customer has increased a lot, which is important as understanding their needs is vital to the success of the business. Our HR function is much more people-focused now, so we’re able to improve our training and career development across the estate.” This has enabled the enterprise to identify rising stars, who are given specific training programmes to meet their needs as they develop their careers within Jockey Club Racecourses. This, states Coppel, is of vital important, because they value the people in the business and they want them to develop and grow along with the business.

Cleaning up their act

After a few problematic racing stories in the news in recent years, many feared the Jockey Club’s image was tarnished beyond repair. But it is now perceived as a commercially focused shareholder, and Coppel has much respect for their approach to business.  He also believes industry regulation is in good hands, via the British Horseracing Authority. “Of course effective regulation is essential given the links to betting that the industry has” says Coppel when I ask him about this. “In terms of public confidence it’s essential that the industry is seen to be properly and fairly regulated.”

In fact, things are looking so positive for the Jockey Club Racecourses that they have implemented a five-year investment programme to improve and add new facilities to their courses. These projects consist of:

• £35 million for Aintree,
• £28 million for Epsom (which will provide a new grandstand, entrance and administration building)
• £11 million for Newmarket (ancillary activities on the July course).
• £2.5 million at Warwick (new restaurant, weighing room and administration offices)
• £2 million at Huntingdon (customer facilities and administration offices)
• £5 million on turf management projects

 “The first five projects are typical of investment required to ensure customers have a great experience when they race with us,” he says. (But Coppel underlines the importance of having the best racing surfaces and facilities for the horses that run at Jockey Club Racecourses’ tracks.)

It is this great experience that will make people return to the races repeatedly through the year. To this end, “theme nights are extremely important, and theme days too,” says Coppel. “There’s more fun and entertainment involved in racing these days, it’s less elitist.” He gives me the examples of Ladies Days, Irish Nights, and the Best of British at Kempton Park. Another hugely successful initiative has been music entertainment in the last 20 years. “Racing starts around 6pm, and then when the racing ends we have entertainment from the likes of Westlife, Pet Shop Boys, UB40, or a tribute group. It’s been great in attracting customers. Just a couple of weeks ago we had Madness at Newmarket, which broke all kinds of records for crowd, turnover, and food and beverage sales.”

These new and improved facilities will prove to be the Jockey Club Racecourses’ competitive advantage. There are over 300 days a year when no racing takes place at any of the enterprise’s racecourses, so it is important that they are efficient at generating income from other areas: local conference and events, exhibitions, meetings, weddings and other types of functions.

But how do they solicit this business? “At the individual course level, they have relationships with local companies of all sizes who use the facilities. We also market nationally to major agents through a function called Pegasus. The national awareness of racecourses as venues for conferences or meetings and so on was generally low, and we wanted to make sure we got on the radar of all key agents. Getting as much market share as we possibly can in this sense has been our goal this year on non-racing and will continue to be so.”

So how does Coppel see things for the future of Jockey Club Racecourses? “Generally speaking our business is improving.  We have much of the best racing in the UK and, arguably, Europe,  but there’s a lot more progress we can make particularly on non-racing because our awareness level is still growing. We want to generate more business in the 300 days a year that we’re not racing. At Aintree for example in the new grandstand we have function rooms that can seat 600, so we want to sell these to maximize our cashflow.”

He also remarks that the likes of Epsom, Sandown, Haydock and Newmarket are hosting an increasing number of weddings, because people like to have weddings in interesting venues – just as they enjoy exhibitions and conferences in similar places. “We’ve got excellent food and beverage, parking, and facilities themselves that are hugely attractive in capturing this business.” With all this on their side, there is huge potential for Jockey Club Racecourses – watch this space in CXO for the follow up report.

BIOGRAPHICAL DETAILS FOR ANDREW COPPEL

Andrew Coppel was born in Belfast in 1950 and educated at Belfast Royal Academy. He graduated from Queens University Belfast, Law Faculty in 1973, then qualified as a chartered accountant with Coopers & Lybrand in London. In 1977, he joined Morgan Grenfell & Co. Ltd, specialising in corporate finance and international banking, and in 1986 moved to Ratners Group PLC as group finance director. He was appointed chairman and chief executive of Sale Tilney PLC in 1990. From 1993 until 2003, he was group chief executive at Queens Moat Houses PLC, which operated 189 hotels throughout much of Europe, then ultimately 87 in the UK, Germany and Holland.

In August 2004, he became chief executive of Jockey Club Racecourses, which is owned by the Jockey Club and operates 14 of the premier racecourses in the UK, including Aintree, Cheltenham, Epsom and Newmarket.

He chairs Tourism Ireland Limited, the cross-border body formed in December 2000 under the Good Friday Agreement to promote Ireland as a premier tourist destination on an all island basis. He is also vice president of Queens University Association, London. He plays tennis and golf and is also a keen follower of rugby.

The Jockey Club Racecourses offer a mix of Flat and Jump Racing. The 14 courses are responsible for over 20 percent of fixtures and 30 percent of prize money in Britain. Major races staged at Jockey Club Racecourses include the John Smith’s Grand National, the Totesport Gold Cup and Smurfit Kappa Champion Hurdle at Cheltenham, the Stan James 1000 and 2000 Guineas at Newmarket and the Derby and Oaks at Epsom.

Jockey Club Racecourses own seven large courses:

Aintree
Cheltenham
Epsom
Haydock Park
Kempton Park
Newmarket
Sandown Park

and seven smaller courses:

Carlisle
Exeter
Huntingdon
Market Rasen
Nottingham
Warwick
Wincanton