Sponsors of UK horse racing will follow the example of Epsom Derby title sponsor Investec in calling for fee reductions because of reduced programmes caused by the Covid-19 pandemic, an industry expert has told SportBusiness.
The UK’s Daily Mail reported last week that the banking and wealth management group is negotiating a reduction for the event, which was previously scheduled for 5-6 June, but is now slated to run over one day in July or August, with no spectators allowed.
Investec is reportedly paying £3m (€3.74m/$3.7m) per year for the Investec Derby Festival rights, including title rights to the Derby itself, in a 10-year deal from 2017 to 2026.
SportBusiness understands that the key point in discussions is the change in schedule from two days, hosting 14 races, to one day with the Derby and the Oaks – regarded as the fillies‘ equivalent of the Derby – now set to run on the same day.
Johnno Spence, chief executive of specialist horse racing agency JSC Communications, said that Investec’s move to scale down its payment will likely be repeated across the sport on a contract-by-contact basis.
Although he is not privy to the Investec-Epsom discussions, he argued that sponsors in all sports will be discussing options with the appropriate rights-holders.
Spence added: “It is a question of every racecourse negotiating with their partners. You also need to factor in that there will be a reduction in prize money because of losses from betting turnover and no spectator income with racing likely to be behind closed doors for most of this year. I am sure that similar conversations are taking place in golf, rugby and football.”
The impact of Covid-19 apart, the circumstances of Investec’s commitment to racing may also have changed since the retirement last year of co-founder Bernard Kantor – a keen racing fan – and the instigator of the current deal.
This year, the brand also decided not to extend its principal partner deal with the England and Great Britain women’s hockey teams and title sponsorship of the Investec Women’s Hockey League. Investec’s nine-year relationship with the properties will expire in August 2020.
Overall, UK horse racing is likely to be resilient in the face of the pandemic thanks in no small part to the continued commitment of the sport’s most influential sponsor the Qatari investment fund Qipco, sponsor of the British Champions Series and Champions Day, as well as being one of Royal Ascot’s official partners.
Spence said: “Sheikh Fahad Al-Thani is a massive supporter of British racing in many different guises from owning, breeding and sponsoring. The sport is very lucky to have his patronage.”
The sport is responding to the pandemic with proposals for racing to take place behind closed doors from 1 June at Newcastle Racetrack and with the four-day Qipco Guineas Festival, from 4-7 June.
This is all subject to a green light from the government. Other countries have already raced behind closed doors, including Australia, Japan and Hong Kong with France returning this week.
Spence continued: “The television potential is massive with the Qipco Guineas weekend and the return of the sport on live television when no other sports is taking part. Racing has proved that it can take place in a safe environment behind closed doors.
“Racing can come back provided the government signs off all the safety tests. France returned with full cards on Monday, 18 May, and Ireland is reportedly also looking to resume pretty soon.”