High-level talks on horseracing's future now at critical point

A decision on the future control of the horseracing industry in Ireland, expected shortly - possibly within a week or two - will determine the future of millions of pounds in State funding.

However, high-level talks between the statutory Irish Horseracing Authority (IHA) and the two bodies most involved in racing in Ireland - the Turf Club and the Association of Irish Racecourses (AIR) - have so far produced no agreed solution on a single structure to run horseracing.

If no agreement can be found before the autumn, the industry risks losing a new and permanent source of revenue, which this year should amount to £30 million (€38 million).

Sources on both sides say they are hopeful that agreement on a single structure can be achieved.

It was "50-50", one industry insider said last week. But another warned that there was no solution yet.

A structure which would enable the Turf Club to continue to have a controlling role for racing, but possibly within the IHA, is an option being considered in the series of meetings.

However, such a relationship between the statutory body and the private club poses serious legal problems.

Models - such as the relationship between some dairy co-operatives and the plc food companies they have developed into - are understood to be among those under scrutiny.

The 210-year old Turf Club, which is a private body, controls most aspects of racing in Ireland and is resisting being taken over by the IHA, the State agency with responsibility for the horse industry, which also is the conduit for Government funding for the industry.

A special meeting of the IHA took place on Friday. A compromise document is to be presented to the meeting today-between the Turf Club, AIR, the secretary general of the Department of Agriculture, Mr John Malone; Mr Michael Dowling, former secretary general of the Department of Agriculture, who has been appointed as a facilitator by the Minister for Finance; and Mr Jim Beecher, the Department of Agriculture official with responsibility for the horse industry.

The Turf Club proposals came in response to the Minister for Finance's demand that the main interests in horseracing must come together as a unitary body, if they are to benefit from the new source of funding for the industry - the 5 per cent tax on off-course betting. On a turnover of £800 million this year, the tax would yield some £40 million, which would go 80/20 to horseracing and dog racing.

This is a big commitment from the Minister and is fully supported by his fellow racing enthusiast, the Minister for Agriculture and Food, Mr Walsh, who has responsibility for both industries. However, it is contingent on the different bodies in horseracing agreeing on a single controlling authority.

Both Ministers says they want to put racing on a permanently-funded basis but that they want the unitary body "or significant movement towards it".

But there the problem arises. The three main bodies which control horseracing cannot agree on a structure.

The IHA has been at loggerheads for months with an alliance of the Turf Club and the Association of Irish Racecourses.

There have been public and private slagging matches between the heads of each and the story has rarely been off the pages of The Irish Field or the Racing Post.

Some 25,000 people are employed in the horseracing industry and between 7,000 and 8,000 in the greyhound industry. More than 1.3 million people went horseracing last year and 750,000 went to dog racing.

Both racecourses and dog tracks have seen huge investment and development in recent years, but prize money remains low by comparison with other countries.

No other sports are to get any of the £40 million - nor have they sought it - even though off-course betting in this State is largely based on English racing, followed by soccer and golf. And, of course, the Minister for Finance could always have re-introduced income tax on stallion nomination fees, abolished by the then Minister for Finance, Mr Haughey, in 1969. This could yield unknown millions - but could also encourage stallion owners like Mr John Magnier - and some of his wealthy counterparts in the business - to take their sires out of Ireland.

The chairman of the IHA, Mr Denis Brosnan, believes control of racing should be under one roof, with a single authority responsible for its destiny - the statutory IHA. He wants the Turf Club to hand over its administrative function and the Association of Irish Racecourses to surrender media rights to racing.

Mr Brosnan is the managing director of Kerry Group, a property owner and racehorse breeder. He has been chairman of the IHA since it was set up in 1994.

The IHA is, at the moment, the "honey pot" for the racing industry, disbursing some £18 million of State funding last year. Its board comprises representatives of all the interests in racing. It controls the Tote.

There may not have been much between the two sides at the start, but Mr Brosnan's over-use of the whip is viewed as exacerbating the situation.

A few weeks ago, he was again warning the industry that it had to make up its mind about merging/ integrating, using terminology such as "standing on a precipice looking down the barrel of a gun".

The Turf Club is a private body which controls most elements of horseracing, except the Tote.

It makes the rules of racing in Ireland and owns the Curragh Racecourse.

It employs 64 people, regulates racing and enforces the rules, provides integrity services such as stewards and referees on the tracks and enforces such things as doping controls, as well as licensing racecourses.

There are 159 members of the club. The senior steward of the club is Mr Gerry Scanlan, a former chief executive of AIB Bank.

Its chief executive, Mr Brian Kavanagh, said everybody in the industry welcomes Mr McCreevy's proposals. He is hopeful that a compromise can be achieved, but is unsure about a timescale.

The Association of Irish Racecourses represents the 27 courses, North and South, and the chairman is Mr Gerry Desmond of Clonmel Racecourse. The racecourses have invested huge amounts of money in upgrading and developing in recent years, with matching investment from the Government.

It holds the media rights to racing and is represented on the Fixtures Committee which sets the fixtures list for the racing year. It wants to keep the media rights and their control of fixtures.

Mr John Magnier of Coolmore Stud, and a sometime business partner of Mr Brosnan, a normally reticent tax exile, has joined in the fray, tilting his sword at the Turf Club, which he described as "a handful of amateurs", who do not rely on racing for their living, putting at risk this valuable funding for the rest of the industry.

Meanwhile, the rest of the industry, including breeders, owners and trainers, watches and waits. The Government wants outline agreement soon - there is a notional deadline of the Galway Races - so that work on the formulation of legislation for the new body can begin in the autumn.

And the structure of the industry continues to be unsatisfactory. Each year, owners of race horses spend between £50 and £60 million on training fees, yet the prize money never goes above £20 million. As a result, the owners are the big funders of racing. Breeders - of whom there are about 6,000 - are generally regarded as farmers - will suffer if owners don't make money; the Government's main interest is to ensure that these breeders stay in business.