Tuesday 21 May 2019

Analysis: An expensive hobby - the numbers behind Michael O'Leary's decision to step away from racing

Michael O'Leary, CEO of Ryanair, in attendance during the Sky Sports Racing Maiden Hurdle during day three of the Leopardstown Festival at Leopardstown Racecourse in Dublin. Photo by David Fitzgerald/Sportsfile
Michael O'Leary, CEO of Ryanair, in attendance during the Sky Sports Racing Maiden Hurdle during day three of the Leopardstown Festival at Leopardstown Racecourse in Dublin. Photo by David Fitzgerald/Sportsfile

Ian Gaughran

AND like that, he’s gone!

Not quite, but Michael O’Leary is riding off into the racing sunset. The question on everybody’s lips is why? Why would Ireland’s seven-time National Hunt champion owner be packing in what has been a massively successful operation which has enjoyed some of the great days in the sport.

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Red Rum’s achievement in winning back-to-back Aintree Grand Nationals was never going to be emulated – it was just too big an ask.

It wasn’t, as it turns out. It was done with style and with a little bit left in the tank – just last month – by Gigginstown House Stud’s Tiger Roll. O’Leary’s little horse had repeated history.

Gold Cups, Irish Grand Nationals, Aintree Grand Nationals, numerous Cheltenham and Punchestown Festival wins. O’Leary won his own race at Cheltenham just last year when Balko Des Flos won the Ryanair Chase. Maybe, though, the writing was on the wall. Delve a little deeper and yesterday’s decision doesn’t actually come as the major surprise it seemed at the outset.

As surprising as Ruby Walsh’s retirement at Punchestown was, there had been murmurings for some time that his career could be in the very latter stages.

Again, in hindsight, it’s not the biggest shock in the world when a 40-year-old with an injury record as long as his decides enough is enough.

O’Leary, however, is one of the richest men in the country and yesterday he decided not to reinvest in a sport anymore, a sport which saw him take in close to €5m in prize money last season.

Gigginstown will wind down over the next five years or so. In essence, they will no longer be buying new horses to race in their maroon silks with the white star.

O’Leary suggested that commitments with his kids won’t allow him time to get racing anymore and enjoy the sport as an owner should. A politician’s excuse, cynics will claim.

There is, of course, nothing wrong with his reasoning. There is everything right with it, it just hasn’t washed with many. Plenty cried foul, plenty sought a more sinister reason. Is there a scandal coming?

Fortunately, there doesn’t appear to be any whiff of an FAI-style controversy surrounding this one.

Back to delving deeper and it looks as though the Ryanair supremo simply lost the love for the game. And when you’re onto a loser without the passion anymore, a good businessman will probably tell you to walk away.

Take when Apple’s Jade won the BHP Insurances Irish Champion Hurdle at Leopardstown in February. It was the Dublin Racing Festival and the biggest National Hunt meeting, pre-Cheltenham, there is.

Apple’s Jade passed the Foxrock winning post seconds before 1.30pm that afternoon and Ireland’s Call wasn’t due to be belted out in the Aviva until 4.42pm before Ireland faced England in the Six Nations.

Apple’s Jade was the hottest property in racing yet O’Leary was nowhere to be found – he was off to watch Ireland being roundly beaten by the old enemy. A shift in his priority perhaps?

Back to O’Leary’s kids, who have often been wheeled out for photographs on big days at the races – they were front and centre when Tiger Roll returned to Summerhill, just last month after his momentous success.

O’Leary’s enthusiasm for horseracing may just not have rubbed off on the kids and maybe it is one genuine reason why, as he might say himself, “he can’t be arsed” anymore.

Maybe he got bored, maybe the operation, and his interest, had peaked – a second successive Grand National isn’t a bad way to exit stage left, to be fair.

O’Leary was reported to be €167m down on 2018 in the Sunday Times rich list published earlier this month. He is still worth €865m but his racing operation certainly wasn’t adding to his wealth.

Between races in Ireland and England last season, Gigginstown House Stud earned close to €5m.

They ran 226 individual horses on the track in Ireland.

Estimates would suggest that each horse is costing O’Leary a conservative €1750 a month in training fees and given that they are each in training for 10 months of the year you are looking at an outlay of close to €4m.

Think back to the public falling out O’Leary had with champion trainer Willie Mullins over something like a fiver a week per horse and we start to see someone becoming tired of just throwing money at the game – it became a very expensive hobby.

Throw in another conservative estimate of €250,000 for horses who didn’t race for various reasons, not to mention vet costs etc, and you close in on that prizemoney very quick.

And these figures don’t include the purchase of any horse last season.

So while O’Leary has won over €28m in prize money in Ireland since he got into racing, you can be sure he hasn’t come out with a profit from that outlay.

He is also on the record down the years claiming to have lost fortunes from his passion.

What shouldn’t be forgotten is that Michael O’Leary and Gigginstown still own a lot of horses who we have hardly heard of yet.

There are four and five-year-olds that will really only get going this winter when the National Hunt season kicks into gear again and those  could easily still be going strong at nine and ten.

The maroon and white are not restocking, but they’re not going away in a hurry either.

The industry will take a massive hit from Gigginstown’s exit. Many will feel the pinch. O’Leary, however, has done what, on the face of it, looks like the decent thing.

It’s a five-year phasing out of his operation and gives all those potentially affected time to get their ducks in a row and replace lost earnings.

Racing will endure, as it had before O’Leary arrived around 15 years ago or so. It’s in a better place, in all honesty, and will endure, as it always has.

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