Irish racecourses face multi-million currency hit on rights deals - HRI boss
Smaller Irish horse racecourses are facing a serious threat to their businesses because of the impact of exchange rate volatility on the lucrative media deals that many of them have struck, according to the head of the sport in Ireland.
Horse Racing Ireland chief executive Brian Kavanagh told the Sunday Independent that racecourses around the country could lose as much as €5m if the exchange rate between euro and sterling were to hit parity.
In an in-depth interview, Kavanagh discussed a new report that outlines the importance of the industry to rural Ireland, the potential impact of Brexit on the sector, the ongoing issue over employment standards for stable staff, as well as the controversy that last year surrounded his own terms and conditions in the role.
"All of our media rights deals are done in sterling," said Kavanagh. Irish racecourses generate a combined total commercial revenue of €31m. A large percentage of this commercial revenue is made up of media rights, which is the amount paid to them for the right to show pictures of racing across various media platforms, primarily to support betting activity.
The two biggest players in the market are both British based - Satellite Information Services (SIS) and Sky-owned At the Races. Between them, they have the rights to live stream racing from throughout Ireland to about 10,000 bookmakers' shops around Ireland and the UK.
Kavanagh said that HRI had carried out an examination of the issue to see how big a hit individual racecourses are actually facing.
That exercise was carried out when sterling was worth €1.25 to the pound but has since dipped to €1.14, with some economists predicting it will weaken even further as Brexit unfolds.
"It is hard to put an exact figure on it but if it were to go to parity, the hit on media rights would be many multiples of millions, certainly €4m or €5m, for racecourses around the country," he said.
Asked if racecourses may close because of the problem, Kavanagh answered: "You would hope not. The ones where they are generating other commercial revenue, they won't."
Attendances at racecourses fell during the recession but are back to the 1.3million level they were at before the recession, he said. But much of that recovery has come from the bigger events at the bigger courses, meaning smaller rural racecourses remain under pressure, he indicated.
Sunday Indo Business