UP553 Live: The Business of Horse Racing

22:18Josh Apiafi:And that leads you to a certain type of content that's defined by depth, that's defined by a specific set of linguistic terms that are very inaccessible. And I'm not saying dumb it down and get rid of furlongs. I don't actually know if that's the answer. I just mean, if we want to interest people who have just a scintilla of awareness about the sport, You can't lead with, you know, going changes and the entries for a race in five days' time. You need to lead with the human connection or indeed the equine connection, but something that they can actually identify and care about.

22:55Charlie Boss:The problem we've got, of course, is our sport is linked to betting. And fandom is generally done statistically by around the ages of 11 or 12. You find your football club probably around the ages of 5 or 6. Because we're so linked to betting, we find it very difficult. we have this big advert that goes people come race, under 18s come for free that's brilliant but find me a 17 year old that wants to go with their mum and dad because that's the thing, you have to go with a paying adult to go for free

23:23Tom Kerr:but they do like betting don't they

23:25Charlie Boss:the old Gen Z's 17 year olds don't bet whatsoever

23:28Tom Kerr:I think, ok, so again this is a bit this is beyond the scope of this conversation and you will know far more than I do as your Betfair background but Gen Z have almost been trained to like betting by gaming.

23:42Charlie Boss:Yeah, but there's different ways of doing that. There's spot prizes, there's predictions, there's fantasy. There's all the new ones that everyone's put the buzzwords that they're talking about now. But when it comes to looking at how we embrace the young, I think Invades have done a fantastic job. And I know that our race courses are part of that organisation now as well. So I think that's brilliant. But let's grow initiatives like that and look at other ones. it can't just be one, there needs to be others there and the one thing that British horse racing has compared to Charlie Boss or compared to the Royal Albert Hall we have space and it doesn't cost for people to come it costs you a lot of money

24:18Tom Kerr:You're using Charlie as a proxy for Bristol City though

24:20Charlie Boss:He's got 27 ,000 seats If we need an extra 20 ,000 at the Children's Festival if you look at the Melbourne Cup their whole enclosure is the whole way down the straight we have got space I couldn't agree more about that, even better than that

24:32Josh Apiafi:if you were 20 something You don't want to have to plan your day in advance. I'm going to sit next to Josh and Tom. That's a lot of effort. InVades, you don't have to. You can say, I'm going to turn up, and my mates are going to turn up, and we don't have to have a dedicated seat. We can just be where we want to be on the race course. That is a massive advantage. It's why InVades has done so well. InVades is an organisation that brings students onto race courses, and they've been unbelievably successful. They have trialled doing it in football. They've trialled doing it in cricket. They've trialled doing it in rugby.

25:01Josh Apiafi:It has been less successful because of the fact that it takes more organisation and actually, a day at the races, whatever happens on the course is a great day out with your mates.

25:12Charlie Boss:And there's a space to do it.

25:14Tom Kerr:Okay, right, we're going to switch the... Thank you very much. Big round of applause for this group. Thank you.

25:28Tom Kerr:There is a race for the yellow seat, I would suggest. There's a... Okay, I just want to start off by just, you've heard the first group, we set it up, you can see the sort of theme of the conversation. Just give me your first response. Bran, what do you think, in terms of what you've heard, give me an idea of where you stand on these issues.

25:46Josh Apiafi:Yeah, thanks Richard. It's fascinating to listen to the various views articulated, Charlie explaining from the beginning that we are incredibly good at many of the things we do as a sport. extracting value out of our betting proposition, our rights. We do that very well. And I think the observation for me is that we are fantastic at putting on events. Our race courses do an amazing job of putting on events. What we're perhaps not so good at is that fan engagement. And the report, from my perspective, validates much of what we've already learned over the past 18 months, two years through our own Consumer Insights work, which has fed into this report.

26:39Josh Apiafi:So for me, it's certainly reassuring that the direction of travel that we're now following, trying to create that central place for people to come to, which, again, I think Josh talked about, to direct people to race courses, to their next event, to engage with those younger generations in a different way, to bring them along, is front and centre of what we're trying to deliver now. as the governing body in the centre for the whole of the sport. And we... I don't believe it's a coincidence that we've seen five consecutive quarters of near on 5 % growth of race course attendances over the last 18 months.

27:22Josh Apiafi:And that is because we, perhaps for the first time, have invested heavily in a national marketing campaign. We can invest more, and we want to. we've focused our efforts on the learnings from that research which is all again around demystifying the sport building the emotional connection engaging through short digital platforms and so that work is is now in full flight and we're in the second year of the broader national campaign and and this year we've really focused on making uh you know the jockeys the horses creating those stories that will draw people in and so i i recognize that the report tells us a lot of what we already know the challenge of course is that is a it is a fragmented industry both domestically here but also globally with different business models all over the world and our challenge is to organize ourselves in a way we're by nature looking at

28:26Tom Kerr:exciting new things and this is going to be the IPL of racing this is going to be the Formula One of racing and we get there we understand it intellectually but I'm always interested in what the real world complications are and why these things don't take and don't work what what is in it there's a conservative wing within the industry as there is in every sport why does it get stuck and do you think innovation can come from within because one of the questions I've got is about the hundred actually because the ECB is quite an interesting case study is that they have disrupted themselves in a way.

28:57Tom Kerr:They've taken the money and actually created a thing. Is it going to be possible to do that? Is it always going to come from outside? Is that the vulnerability?

29:06Josh Apiafi:I think we must innovate. What we've learned from this report, from our own research, is that we must innovate to remain relevant to new consumers. One of the challenges for us, of course is that unlike other sports we are actually very well organised in terms of that global framework in which our horses are bred, are sold, raced to maximise commercial value through an existing global patent system and just like Charlie I would receive 10, a dozen different presentations every year from different groups or individuals with the next concept, the next idea that will revolutionise horse racing. Some of them are fabulously interesting.

30:02Some of them are frankly crazy.

30:06Josh Apiafi:But we've got to remember that our best horses are not motorcars that can be put onto an aeroplane and flown to the next country for a race in a fortnight's time. It's just not how our structure works. But to answer your question, I think we have to strike the balance between the two. There is a need for innovation. We've got to find what that solution is. And I think we need to do that both at a domestic level but globally. Okay. Sharon, what's your...

30:34Charlie Boss:Yeah, I think... Look, the report for me, I think, you know, calls it out really well in terms of that fandom and fan engagement. But I think the sport at its heart probably is a bigger question in that we probably have an identity issue. I don't think as a sport we really understand who we are or what we are and I think that that's probably a really big question for me. I think that needs probably understanding a lot more.

31:02Tom Kerr:What do you think we are? Or they are? Or you are?

31:05Charlie Boss:And that is, it is such a diverse sport and I think Charlie referenced it there. For me it's not fractious but it is who are we engaging and what are we engaging them with and I think if I went round the room and asked for a show of hands there's 70 people in the audience you would probably get about 65 different answers I think and that is key for me that we're not always all on the same sport or same page when we're looking at fan engagement and what is that fan engagement for the sport

31:40Tom Kerr:okay Sam the report has been referenced people will go away and read it but what's your take on where it applies to what we're talking about yeah I love the opening are we a sport I think

31:52Charlie Boss:as a sport I do think we are a sport live experiences we do fantastically well you only need to look at numbers around Royal Ascot the Melbourne Cup Breeders Cup over the last few years to know that from a betting experience perspective and betting is tightly woven into the fabric of our sport we can't you know we can't get away with that we can't get away from that i also think you know we do relatively well but i've heard a lot about british market the british market brand you touched on the global market i think when we think about how the sport will transform and you know at spotlight sports with racing posts we're tuned in to think about opportunity We're a media publisher.

32:34Charlie Boss:If you haven't evolved and seized opportunity in the last couple of decades, you failed.

32:38Tom Kerr:So what proportion of the Post and Spotlight's audience is outside of the UK?

32:42Charlie Boss:Well, we have a relatively diverse business. So we are obviously a UK and Irish media publisher with a core UK and Irish audience. But we do a lot of work on products and content that services operators with experiences they'll use on their platforms to their audiences in other countries. so it's not quite as simple as our audience in racing posts we've got quite diverse wide business when it comes to what we service but my point is that when we do live experiences really well we do betting at local level relatively well then the levers to really increase those things is the fandom we've touched on it a little bit there but i think the transformative play is to take that away from local markets and connect some kind of global narrative across racing

33:29Tom Kerr:Who is the natural organisation to do that? So if we're talking about a global play, what would that mean? So again, back to my initial opening about the money, that sounds appealing, frankly, and I'm thinking, OK, I can see the Kentucky Derby, I can see all these great races around the world, and there'll be one point of entry for media and sponsors. Who's going to do that?

33:56Josh Apiafi:Yeah, and that is a question both at the domestic level and at an international level. But I would say, and I'm a member of the International Federation's Executive Council, we spoke at length on Saturday night at our most recent meeting about rebranding global racing. What is the International Federation? Most people in this room might know it exists but don't really know what it does. And obviously the chair...

34:21Tom Kerr:Does that have the power to do that level of change? It's a federation.

34:26Josh Apiafi:So it's about building a coalition and getting everybody to come on the journey with us. And I think there is a huge opportunity there for us to work globally on developing a brand, a new brand for the sport that can become globally recognisable. Whilst we might be different to other sports in the way that we're structured, When you look at football, when you look at basketball, the language is the same. The rules are the same. We complicate things for ourselves. You just have to move from one part of the world to another in racing to hear the same thing described in different ways. For change to happen or for something seismic to happen, for an IPL or a Formula One, if that's the conversation,

35:24Tom Kerr:there's going to be winners and losers, and someone is going to have to give something up that they enjoy. And this is the same in every sport. It's not just in horse racing. But there is going to be sacrifice. And trying to get organisations to do that is incredibly difficult.

35:40Josh Apiafi:I would never have known that, Richard.

35:43Tom Kerr:I'm just here as a podcaster. Particularly in British racing.

35:48Josh Apiafi:As a podcaster, I'm here to just give lessons. I think where we are fortunate at a global level, and I'm trying to keep this macro because I think that's where there is an enormous opportunity. We have some outstanding examples of addressing these issues that we're talking about tonight. So I was at the Japanese Derby on Sunday. Talk about fan engagement. I mean, it's another level. people waiting for an hour to line up and do a virtual reality of riding a horse as a jockey in a hall of fame it's got you know all sorts of fan engagement tools there and you know we we have other examples you know hong kong jockey club as well are doing similar things so we we have a great platform there for us to to lead at a global level and share best practice just just on that

36:43Charlie Boss:though, I do think and you're right, if you go racing in Hong Kong or Japan, the fan engagement there is phenomenal but it's across various different age groups there's so much more to it than just going racing for a social event or going racing because you're a core racing fan that loves to bet it's got so much more to offer I don't think we do that as a sport really well and again for me it comes back to that identity bit we're probably trying to please all of the people all of the time and then inevitably you end up really pleasing nobody but getting this general yeah racing is a great day out which it absolutely is but that might be your Cheltenham your Ascot you know your your key meetings that's not necessarily for a Thursday night you know you've got you know maybe an average enough card and there is a place for that in the sport but it's understanding where is that place and how do we focus on our fan engagement, our investment, promoting all of the really great things within the sport without damaging the grassroots side of it because you cannot have the great days without your mediocre race cards.

37:59Charlie Boss:You need those meetings. And it's the ecosystem thing. So when we talk about football, people immediately go to, well, that England team is made up of a whole pyramid of clubs.

38:18Tom Kerr:So the money wants the bit at the top. And then there's an argument, say there's a sort of externality that might, you know, there's a trickle down that might happen. take that the pyramid into horses because I'm not quite sure how that works, what would that impact be if the focus was at the very top how does that impact on the broader ecosystem or the pyramid of horse racing

38:47Josh Apiafi:I was just going to say the investment at the top does feed the whole of the core because whilst that investment may drive further investment in breeding, quality of breeding, not every horse that's bred to a high-quality standard in stallion will necessarily make that high level. So it will filter through to the core, and it has to filter through to the core, but there also has to be a mechanism for that investment at the top to support the pyramid at the bottom. There has to be.

39:21Charlie Boss:But I think when you look at the report, for example, and we talk about the 200 million addressable fans out there, we've divided them into sports fans and what we call entertainment and big event fans. Those major pinnacle moments in the sport are our cut-through moments. Whether it's Royal Ascot or the Melbourne Cup, internationally, they are our cut-through moments. So when we think about that audience, 70 % follow teams or athletes on social media. we have another stat 36 % will have watched highlights from the sport on mobile over the last week we know they're mobile first we know they're social first, that is the place where major events cut through and that is where we can showcase our sport and hopefully gain that fandom it's about how we push them with strong narratives into the sport more widely

40:09Tom Kerr:I wonder if there's a sort of bifurcation, there's a top and there's a bottom we're talking about different things, there's a hospitality the great events you know and you go to whatever you know I'm a county cricket fan for Christ's sake you know I know about empty stadiums and the rest of it so I'm going to throw out any questions we've got a process here finely honed which involves Sean over here so Sean is going to just make yourself apparent he isn't Baldrick from Blackadder so don't ask him he gets annoyed he gets annoyed when people make that comparison Yes, Paul Morgan.

40:47Charlie Boss:Hello, I was really interested in the point you were making about Japan and Hong Kong. And earlier on, you were talking about what we do with investment. Isn't that what we do with investment? And why haven't we already done that? Because that really does sound like it engaged a whole new audience.

41:04Josh Apiafi:I don't think it would be any surprise to anybody to acknowledge that we haven't invested in marketing our sport to, certainly centrally, through our current marketing vehicle. And in fact, comparative to other sports and the investment that they would make in marketing their product, we're a long way short. but we are committed to turning that around and we have been so last year significant investment from the levy board around 3.6 million to develop a new national marketing campaign another 4 million this year which also incorporates building out new digital content to engage with fans so baby steps at the moment but our vision is that we build on this and we continue that growth it's It has to be central to everything we do to help engage with those new audiences.

42:04Josh Apiafi:So in the context of the current investment we can make, we are focusing on trying to do those things.

42:14Charlie Boss:And Brent, with that marketing, how do you think about it between marketing live events on a local market basis or marketing the sports narrative?

42:24Josh Apiafi:I think there are different roles and different parts of the sport play here. So, you know, our race courses do a fabulous job of engaging with those that come racing at the local level. I think there is a lot that we can do at the centre to demystify the sport, to build those emotional connections through different digital content, and that's what we've really been focusing on over the last six months. so I think different parts of the sport play different roles but we have developed an industry strategy that's been agreed across the sport here in Britain and everyone is playing their part in

43:06Tom Kerr:that and and it is actually working very well okay so we've got another question hi it's Andrew

43:13Charlie Boss:just a couple of observations uh would you please respond and then a couple of questions really just in one on the report itself. The first thing is that there is no one central body, therefore there is no one strategy, internationally or nationally. You've got seven or eight stakeholders within UK racing, let alone internationally outside of the United Kingdom. Therefore, sort of taking best practice, it would be good to talk rather than generics about specifics. And, you know, to highlight a couple, fractional ownership has transformed the Australian horse racing market. We sort of start with sort of owners group in elite racing and others.

43:49Charlie Boss:so we bring it in certain ways. Betting, ironically, is a sticky product because it actually drives engagement, but there's no real in-play. But there is in-play behind a paywall, and in-play is understood. And we need to demystify why horses run 7, 8, 9, 10, 2 miles or whatever. And the big question is that people don't bet because they basically think it's either fixed or they don't understand it, and you still need to address those big, big issues. Gen Z actually do absorb data. They've done that since FIFA 2005 through PlayStation and everything else. So you're missing a beat if you don't understand the answer to what data is.

44:29Charlie Boss:And they will understand data. They will understand in-play, which is something that they will completely absorb. If I can then just ask from the generics to the specifics, which is more on the report itself, which is that you're saying the report says that racing should be positioned as a sports first rather than primarily as a betting product. but we're also arguing stronger. Fandom can later convert into wagering. For race courses and for operators, rights holders, what would be a credible sport-first strategy look like in practice? So in practice, and what commercial evidence would you need to justify that shift?

45:01Charlie Boss:And then the transferable lessons that you talk about in the report, which are you point to Formula One grades under Liberty Media and how centralised digital rights, clear narrative arts, and strong content ecosystems can expand a sports audience. And my question is, what lessons are genuinely applicable to horse racing, which kind of breaks down because horse racing is fragmented by governance, jurisdiction, calendar ownership structure and commercial incentives. There's a lot of unpickering, sorry. Blimey.

45:31Josh Apiafi:I was just going to say if you wanted to jump up here, actually.

45:34Charlie Boss:I'll try and... Hang goodnight. I'll try and tackle one or two of those and see where it takes us. At Racing Post, we think a lot about the demystification of betting. We produce products like SmartView, which break down more traditional race cards into data-led, data-vis products to make them more accessible for first-time audiences. I think just expecting to demystify betting and change the sport's fortunes is the wrong place to start. I think that's a product of our sport. It's a very important product, and it's woven into the fabric, obviously, of our finances and our commercials. But I think as the report pulled on very clearly, starting with sport and fandom first is the most important thing.

46:19Charlie Boss:We're not trying to squeeze the lemon harder by getting more betting out of the sport, I don't think. We've done that pretty well, I think, over the years. We need to build more audience and more fans and push more people into the top of the funnel of the sport.

46:32Josh Apiafi:I'll just address the issue that you raised at the beginning around there is no strategy. Two and a half years ago, the sport in Britain came together and all of those different fragmented stakeholders that represent different parts of the sport agreed on an approach to developing a strategic framework and we've done that. And we, as the governing body, sit at the centre and are responsible for working with the stakeholders to bring it together. And one thing I will absolutely acknowledge is that we perhaps haven't been very good at communicating outwardly how that works coming together. but I think we will see over the coming period of months how that is all converging and starting to ladder up into delivering what it was we have been working towards over the past few years, and it's largely focused on growth.

47:28Thank you.

47:29Josh Apiafi:Right. Yeah, we've got one over here. Betting is central to everything that horse racing does, and it will be into the future. I think it's the greatest betting mode ever conceived. But crucially, the betting that horse racing offers, at its best, is not a spin of a roulette wheel. You have to actually understand something about the sport in order to derive as much enjoyment, as much satisfaction from that betting experience. And that's where the storytelling comes in. That's where presenting it as a sport comes in, because that's your point of understanding. My first winning bet was on the Grand National and it was literally a lucky guess.

48:12Josh Apiafi:But that then planted a seat for me and I started watching TV. I started understanding who the players were, who the jockeys were. I started seeing horses reoccur. I started piecing together the narrative, the season that runs through it. But it's unrealistic for us to expect lots of people to do that when it's so hard to do it. So I think what the report is saying and what we're saying tonight is not don't put betting at the centre of horse racing. It's make it easier for people to care about horse racing and the betting will follow.

48:47Charlie Boss:If you go to a race course today, why would you bet? If you're not an avid fan, if you're not a hardcore racing fan, if you're just there because you're, and I'll use my own reference, you're a group of girls. I'm from a non-racing family. So when we go racing, I'm usually the only one that's any interest in watching the actual horses. Everyone else just wants to stay in the champagne bar, which is, you know, find out there's nothing wrong with that. But what makes you convert that into betting? How do you make it understandable? How do you make it relatable? How do you make it an experience? And I know that might sound a bit, you know, large in that, you know, you put on five pounds, but it gives you something.

49:26Charlie Boss:What do you get out of betting? and I think we need to understand that from a participant's perspective and it goes back to that experience piece it's really understanding the audience that you're marketing to

49:40Josh Apiafi:I was just going to make the point we don't exist as we are without betting no, a marriage of convenience it is as simple as that but we have to engage first yes there will be a migration of people from different products of course different types of betting products But if I take my 22-year-old daughter along to the races who's had no exposure to horse racing at all in her life, she might have a little bit of fun looking at the horses and enjoying a glass of champagne or something. But there's nothing that's getting her to engage. And what we've got to do is we've got to engage more people because, frankly, I think we've not been doing that like other sports, have been forced to do because we've been able to rely on a financial model that has this connection with betting and wagering and media rights.

50:35Josh Apiafi:And so we've been able to exist as we have for some decades now, but now things are starting to change and we need to engage with those new audiences to build that betting narrative, betting proposition into the future.

50:50Charlie Boss:And engaging with those new audiences is hard. than never. Yeah, in a competitive... One of my favourite stats is 52 % of people follow 11 or more sports in 44.

51:02Tom Kerr:Nick Couchman.

51:03Charlie Boss:So, yeah, my name's Nick Couchman. I'm a sports rights lawyer. I have been for 30 years, so I've worked in a lot of different sports, including sports racing. One thing that we haven't discussed tonight so far is AI. My view is that AI represents a massive challenge, threat, and opportunity to mankind. or humankind, and including sport. And I think horse racing is no exception to that. We've just been talking about data. Data rights, in my experience, over the last 10 years, have been the single biggest growth area in many sports. The single biggest. A lot of people, simply, I'm afraid, don't realize that.

51:43Charlie Boss:It's been happening under everybody's noses. The data wholesalers have been running amok, in my view. There's probably some of them represented here, but they've been running amok, being capitalized on New York stock markets. So you're talking about Sport Radar Genesis? No, no, I'm not going to mention any names.

52:01Josh Apiafi:I'm not going to mention any names.

52:02Charlie Boss:You can all do your own research. But the wholesale data market has just been running amok in the last 10, 15 years. I think AI now provides an incredible opportunity for all sports, but especially racing, to completely review its data strategy on a global basis. but if the global federations and stakeholders won't get together and do that then we should just start it in the UK and see whether we can take a lead but it's not just data rights and exploitation and betting it's about all areas of data capture analytics the use of data to make the experience better to make it more interesting the gamification the prediction markets etc.

52:43So when you look at football and betting who is doing the innovating who is doing the promoting

52:47Tom Kerr:who is presenting new betting products to the marketplace in football? Is it the betting companies? Betting firms? Is there a lack of innovation in horse racing betting per se?

53:01Charlie Boss:What's happening in the other sports is that wholesalers have gone with their checkbooks and bought data rights from, I would say, personally, I'll go out on a limb here, naive rights owners who've just said, we need the cash, this is great, a new category of rights that we can make some cash from. I can hit my quarterly or my annual figures. Fantastic. They've sold those rights, in some cases, for a long time. And those rights are then exploited in the global betting markets. Whether people realise that or not is neither here nor there. That's what's actually happening.

53:34Josh Apiafi:And I could not agree more. The International Federation have been publishing literature on this. I'm involved in a think tank. a lot of this behaviour that you're describing is fuelling the growth in markets, offshore markets that are not regulated here domestically. And, you know, that's a matter of fact. And it's something that not only sports, but government need to try and grapple with because it's, I would say it's an existential threat for us as a sport.

54:10Charlie Boss:horse racing is relatively unique as a sport that our superstars are equine and as much as core racing fans will try and convince me it's difficult to extract a personality out of a horse so so we have to play with the other assets we've got jockeys trainers we've got some brilliant other assets out there but i don't think we've really landed on what the clear narrative is around racing sometimes and it is focused on the horse quite rightly i think the second point is that we are a collection of lots and lots and lots of different smaller stories rather than a bigger joined up narrative and that's kind of where I was making the point around if we want transformative levels of engagement with the wider fan base that we talk about here, the 200 million, the dress for audience for racing, we have to lift the narrative and think about it in as macro terms as possible would be my opinion

55:09Tom Kerr:yeah yeah i mean i hate it as you know

55:15Tom Kerr:yeah i i get it i i go around in circles i mean not that matters but i go around in circles on this because i think that sometimes the complexity is the thing and actually the the push for simple narratives is actually not what most people want and the idea that gen z wants simplicity you just got to go into the gaming world and they adore complexity and so it's a mistake to try and dumb down into a into an idea that you know that there's a straight line there's a franchised world I don't know I'm often wrong but that's where I think there's a there's a challenge when the money hits the sports industry because actually I think the complexity is that it's quite often the bit that we find interesting and there's a trade-off question about you know what are we going to lose what do we give up you know in rugby it's a lion's tour it's a rider cup in golf what do we in horse racing what are you okay with losing that you've really loved for 20 30 40 50 years and that's those are the really difficult questions that once you start down that route okay you might get this overarching narrative but there's going to be trade-offs and the trade-offs are really painful in some cases personally and and corporately anyway i'm standing between 80 people and a free bar.

56:30So we will draw a veil.

56:33Tom Kerr:What is very important on a podcast, a live podcast, is that you get an enormous, almost comically loud round of applause at the end. But I want to really thank our guests, and I really enjoyed the conversation, and I hope you did too. So thank you very much, everyone. APPLAUSE

56:58Thank you.