Reticence to take on additional debt burdens in an uncertain climate has meant British racing will only receive half of the £40m made available by the Government’s sports survival package.
A £21m loan arrangement has been made that will allow the Levy Board to finance the sport as it continues to suffer effects of the Covid-19 pandemic. An original £40m was ring fenced to help racing get through enforced winter closures, but the taking on of additional debt burdens was unsustainable for many stakeholders
Racecourse Association chief executive David Armstrong commented: “There were structural challenges that in particular meant it was very difficult for racecourses to borrow the money. Racecourses were being asked to borrow money that would effectively be used to fund prize-money from which they don’t generate returns to pay it back.”
Unlike other sports, horse racing will see funding effectively go to another government body, the Horserace Betting Levy Board, as opposed to going directly to businesses.
Julie Harrington, BHA chief executive heralded this as an important step, and Alan Delmonte, chief executive of the Levy Board commented: “The loan provides additional flexibility and a cushion for the Levy Board. The short-term benefit outweighed the cost of the interest on the loan.”
The restructuring will be of great benefit to the organisations tasked with the practical running of horse racing, Armstrong added.
“What they didn’t want to do was take on more debt with more repayment obligations in the future which would have made life very difficult for them. In some cases they couldn’t, there were restrictions within their existing borrowing rules that meant they could not take on new loans.”