Billionaires Hunt Real Estate Bargains, Boost Equity Allocations
24 July 2017 – The Daily Telegraph
Most people assume that the Competition and Markets Authority is a force for good: a Government body that insures that commercial forces cannot join together to the detriment of society.
So, one must assume that the mandarins at the CMA breathed a massive sigh of relief last week when the combined commercial power of Ladbrokes and Coral bookmakers failed in its attempt to take a wrecking ball to the livelihoods of everyone who ekes a living mucking out racehorses from dawn to dusk. Because that is what it was trying to do when it attempted to undermine the value of live coverage of races broadcast into betting shops by refusing to sign up for new channel The Racing Partnership. For the sake of the millennials, I should add that live streaming of races to mobile telephones was also involved in the stand-off between some of the racecourses and Ladbrokes Coral and Betfred.
The Reuben brothers, who own many racecourses under their Arena Racing Company banner, should not be considered fans or friends of racing. Their investment in facilities that happen to stage racing should be viewed as merely symbiotic. If the racing industry thrives, they will; and vice versa. But this week, racing should be mightily relived that it had their financial firepower to stare down Ladbrokes Coral and Betfred. The Reuben brothers are formidable businessmen, so let us hope that their stars and that of racing stay aligned.
While I know little of financial affairs, I cannot help but wonder if Aug 4 is not a significant date, as far as Ladbrokes Coral needing to end its stand-off with ARC. Because that is the date when it delivers its quarterly financial results; and perhaps not having live pictures of racing et al in its betting shops from a significant number of racecourses was not working out so well for its spread sheet? Not that it will admit as much when it delivers its results.
The deal agreed by ARC and Ladbrokes Coral to break the impasse is a profit share. Of course, nosey parkers such as myself will wonder who was the winner in this stand-off. So, I am going to try to read between the lines. ARC has just done a deal with William Hill to buy two of its greyhound stadiums; and William Hill has agreed to take over the sponsorship of the St Leger at Doncaster, which is a spiritual blow to many at Ladbrokes.
So, the likelihood of Ladbrokes Coral getting a less-than-market price deal from ARC is simply not plausible. As for the concept of a profit share, is that a loss of face for the racecourses, as opposed to money up front, or the way forward? Well, the racing “product” does have to be successfully commercial for the bookmakers if it is to be sustainable, so racing should have the confidence to do more profit-share deals if it believes in its own product. As aggressive as they are, bookmakers are entitled to make a reasonable profit.
Of course, the knock-on effect of a profit-share deal is that trainers will have to adjust their mindset. Races with fewer than eight runners, for example, will have to be completely unacceptable to everyone in on the deal. So, what have Ladbrokes Coral and Betfred achieved in trying to undermine racing? Absolutely nothing. In fact, all they have done is lose market share.
And as for Betfred, it is now the only bookmakers standing on the beach with no swimming trunks on as the tide goes out; deserted and hung out to dry by its fellow bookmakers. I am a Betfred customer; and I am getting bored of driving into Chipping Norton to have a bet in one of his shops, only to find that the race I wanted to bet on is not being shown live. And I do not suppose I am the only one.
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