Recession takes its toll on sport of kings and property developers

ANALYSIS:The number of horses in training in Ireland has taken a tumble from its boomtime peak

IRISH PUNTERS will travel to Cheltenham with their usual optimism next week, but even they would have to acknowledge that the challenge from this side of the Irish Sea for some of racing’s top prizes is not what it was half a decade or so ago.

Like everything else, the recession has taken its toll on the sport. The number of horses in training here has fallen from a peak of over 12,000 in 2007 to around 10,000, although there are no official figures for last year available yet.

One of the boom’s offshoots was a surge in the number of Irish people buying racehorses. The rapid turnaround between 2007 and 2008 had a similar impact on racehorse ownership.

In 2006 and 2007, an average of 1,400 new owners registered with the Irish racing authorities. By 2009, this had fallen to less than 900. Evidence suggests it is still declining.

There was a significant link between property and ownership. In 2005, Kicking King, owned by financial adviser and developer Conor Clarkson, captured national hunt racing’s biggest prize, the Cheltenham Gold Cup. Clarkson had a number of horses in training, including Finger on the Pulse, which won at Cheltenham in 2008.

Irish Nationwide placed Clarkson’s business in receivership in late 2009 with a €40 million debt. He no longer owns any horses. Kicking King was retired, and JP McManus bought Finger on the Pulse. The horse went on to win the prestigious Galway Plate last July.

In 2006, War of Attrition, owned by Gigginstown House – Ryanair chief executive Michael O’Leary – led an Irish one, two, three home in the Gold Cup. Back in third that day was a horse called Forget the Past, owned by Ballymore Properties founder Seán Mulryan.

At one stage, Mulryan had an estimated 150 horses in training in Ireland and France, although he reportedly confessed that he did not known the exact number. Forget the Past came closest to his ambition to own a Cheltenham Festival winner.

He is now further away from that ambition. He no longer has any horses in training in Ireland. He and his family still own Ardenode Stud in Kildare.

Ballymore’s Irish debts are in Nama, but its scale means that it is in it for the long haul. In January, it transferred 72.5 per cent of its landmark redevelopment of the London Arena on Canary Wharf to Royal Bank of Scotland and a group of bondholders in a debt for equity swap. It owed those creditors £265 million. It has been working on refinancing around £1.1 billion of debt in Britain.

Seamus Ross of Menolly Homes, whose red-and-yellow checked colours were a familiar sight in Irish racing, no longer has any horses in training. He has sold a number of them to others, including the successful handicapper Keleghan.

Syndicates were a big source of home-grown owners, and at one stage they owned up to 30 per cent of Irish-trained horses. Latest figures now show their share has dropped to 20 per cent, and is still falling.

The balance in national hunt racing has shifted back to a small group, some of whom are Irish, including Michael O’Leary, JP McManus and Cork insurance broker Archie O’Leary (no relation of Michael). Others include British mining magnate Alan Potts and Barclays bank executive Rich Ricci, who is from the US.

Carlow-based Willie Mullins trains Ricci’s horses. Potts uses two other high-profile trainers, Henry de Bromhead in Waterford and Jim Dreaper in Kildare. McManus and Michael O’Leary tend to spread their horses around various stables, while Archie O’Leary is also a client of Mullins.

Irish racing’s ability to attract outside investment dates back to the days when Vincent O’Brien trained for the likes of US mining millionaire Charles W Engelhardt in the early 1970s.

That is due to the quality of horse bred here, as well as the level of training and riding expertise. While Ricci is based outside Ireland, when asked last December why he based his horses here, he said it was the quality of the people in the industry.

In his case, he has the services of a trainer who is regarded on both sides of the Irish Sea as being among the best. With Mullins as his trainer, it is likely Ruby Walsh, who last year became the most capped top jockey in the 100-year history of the Cheltenham Festival, will be riding at least some of Ricci’s horses.

Owning national hunt horses is not profitable and most of them have no residual breeding value. Prize money helps to offset the expense with, on average, prize money returns cover 29 per cent of the entire investment.

Sponsorship is a key component of on-track profits, but most of this comes from businesses that are extra careful about spending these days.

Punchestown, which hosts Ireland’s biggest national hunt festival, is still attracting sponsors.

Marketing director Liam Holton says that interest in backing the event comes from a range of businesses, including bookmakers, media, hotels and travel companies.

The festival has just recruited Chronicle Bookmakers, owned by the Carty family and businessman Dermot Desmond, as sponsor of its champion bumper, on the festival’s high-profile Wednesday.

Ryanair has deals with both Punchestown and Cheltenham. It is one of two Irish sponsors at the Cheltenham Festival, although Paddy Power sponsors most of the track’s November meeting.

Both Ballymore and Anglo Irish Bank previously sponsored races there.

Whatever about owners and sponsors, ticket and accommodation bookings indicate Irish punters are still planning to turn up in Cheltenham next week in their usual droves, and with their usual – if naive – optimism.