Mr. Paddy Walsh:

I assume Mr. Moloney has dealt with Senator O'Neill's questions and the majority of Deputy Pringle's questions. Deputy Pringle asked whether we had had a response from the Department on media rights and the legalities in the legislation. As this is the first opportunity we have had to raise the issue, we have not had a response. Deputy Heydon asked about the responsibility of racecourses, given the importance of media rights funding and the impact it might have on how racecourses focus on income from other sources, such as through the gate. While racecourses have welcomed the media rights income over recent years, without which we would be in a seriously bad way, we are equally dependent on our other sources of income.

Racecourse attendance fees account for almost 30% of racecourses' incomes. Racecourses, particularly throughout the past couple of years and the economic recession, have had to redouble their efforts to attract crowds through various marketing and promotional initiatives such as themed days. They have taken a major hit on margins. Admission prices to racecourses are lower in real terms than they were six years ago. During the boom days before the recession, racecourses were one of the few sporting venues that did not increase their admission prices. The GAA, IRFU and FAI increased their admission prices significantly.

They have been clawed back a little in light of the recession. We never took that rise at the time. By taking a further cut during the recession, we pared back the margins in order to keep up the numbers. There has been a major effort made by racecourses to do so, with some success.

The Deputy mentioned that racecourse attendances were falling but the reality is that they have increased for the past while. We are up 6% or 7% for the first half of this year. We are quite pleased with that. Last weekend was a great example of a major increase of 10,000 people over two days. On behalf of the industry, we are all happy with the result of that promotion. Racecourses have focused on the crowds coming in and it is not just for the significant amount of money they bring to the party. Those who attended the race meeting last weekend have seen the difference attending a race meeting with a good crowd, a good buzz and a bit of atmosphere. It is phenomenal and that, rather than a wet Tuesday when there is not great racing and not too many people around, will bring people back the next day. It is not just the money coming in on the day but also the image of the racecourse. Racecourse managers are very conscious of it and have made great strides in maintaining attendance levels during the recession and increasing them since then.

With regard to the conflict of interest issue with HRI and owing a racecourse, we highlight it in our submission as a matter that HRI needs to be conscious of. In my experience, and given the length of time he was involved in the HRI board and the IHA board before that my chairman would agree, we are not aware of significant conflicts that have arisen with regard to the allocation of fixtures, grants or anything. We must keep an eye on it.

Another point raised concerned the claims of other parties on media rights. One expects that every sector of the industry would like to have a claim on such rights because of the amount of money brought in. That is perfectly understandable and, in a forum like this, I would expect nothing else of most of them. There was negotiations between the parties and the Department about the previous legislation, which was the 1994 and 2001 Acts. The outcome of the negotiation was that the ownership of media rights was vested clearly in the racecourse executives, with the exception of data rights, which were vested initially in the Turf Club and then subsequently in Horse Racing Ireland. That was clearly set out in the legislation. That is not that different from most sports where media rights are involved. The general thing is for rights to belong to the people who control the venue where the event takes place. From a practical point of view, we can see why it would be so. If the rights were to be with someone else, the person who owns the venue could say that people cannot come into the venue unless they do X, Y or Z. It is the natural home for control of such rights.

The final point is the most important one about any claim another sector of the industry might have. I mentioned that the 26 racecourses in Ireland have not declared dividends in the past 50 years or the length of time that I can go back. All profits from racecourses are reinvested in the industry and the amount of profit, at 1.75% return on capital employed, must be returned to maintain the infrastructure at the level we have it at the moment. The infrastructure is not too bad because of the investment over the past ten or 15 years. The quality of our racecourses is quite good, with one or two obvious exceptions. The standard is very good in comparison with other countries or other sporting bodies in Ireland. That being said, the fact that all profits go into the business to provide the infrastructure where the owners, trainers and jockeys ply their trade means that, without that investment, we would not have the changing facilities and medical facilities on a racecourse for participants and spectators.

Indirectly, all of those other sectors of the industry benefit from the money that comes from the media rights, albeit in an indirect fashion. I am not sure if there is any other body within racing that could naturally oversee that spreading of the benefits back through all the other sectors. From that point of view, I see the racecourse as the natural home of the income from media rights. That is where we think it should be. I think I have covered all of Deputy Heydon's questions, but if I have missed one we can come back to it afterwards.

Deputy Lawlor raised the issue of the percentage of capital development paid by the racecourses themselves. I think I referred earlier to a figure of €270 million which has been invested by racecourses over the past 15 years. Somewhere between 40% and 50% of that would have come from grants through the HRI capital grant development scheme. That is a capital grant development scheme managed by Horse Racing Ireland, so it essentially decides who gets what and at what the percentages are set. Typically, it would write to all the racecourses to ask them what their plans might be over the next number of years and, depending on the uptake, it might allocate so much money towards a scheme. It will then decide on what the percentage grant will be - 40% or otherwise. It will fine-tune the scheme as it goes along on that basis. Normally, these schemes work over a period of three to five years, or somewhere of that order. We did not have a scheme last year, again due to some of the cutbacks, etc. We are hoping to have it reintroduced this year, presumably over the same period of time. The future capital development plans of racecourses would be very much reliant on the continuance of that capital grant development scheme.