Thursday, 14 July 2022
Ceisteanna ar Sonraíodh Uain Dóibh - Priority Questions
Horse Racing Industry
2. To ask the Minister for Agriculture, Food and the Marine the steps that he is taking to ensure that equitable funding is being given to the smaller horse racing tracks in Ireland; and his views on whether all current tracks are viable into the future. [38833/22]
What actions is the Minister taking to ensure the equitable funding of smaller horse race courses, in particular?. There are serious concerns for their future viability. Are they viable? There are concerns about data and media rights and how they are being distributed and whether that is equitable. What actions are being taken to ensure that there is equity in the distribution of funding, both capital and current?
I thank the Deputy for raising this important issue. Horse Racing Ireland, HRI, established under the Horse and Greyhound Racing Act 2001 is a commercial State body responsible for the overall administration, promotion and development of the horse racing industry.
The horse and greyhound racing industries receive financial support from the State through the Horse and Greyhound Racing Fund under section 12 of the Act. The Department of Agriculture, Food and the Marine makes payments from the fund to HRI and to Rásaíocht Con Éireann, RCÉ. In the period 2001 to 2021, a total of €1.46 billion was paid from the fund to the horse and greyhound racing industries in accordance with the provisions of the Act. Exchequer support provided from the fund is crucial to the survival and continued development of the horse racing industry.
In budget 2022, an allocation of €88 million was provided for the Horse and Greyhound Racing Fund. This is distributed in accordance with section 12(6) of the Horse and Greyhound Racing Act, with 80%, or €70.4 million, going to HRI and 20%, or €17.6 million, to RCÉ.
Horse racing in Ireland is administered on an all-island basis involving 26 racecourses. HRI has informed my Department that all 26 racecourses are affiliated to the Association of Irish Racecourses, AIR. The AIR chairperson is a board member of HRI. This board member also sits on HRI’s fixtures committee and is also the chair of HRI’s media rights committee. As the Deputy will be aware, the HRI fixture committee controls the allocation of fixtures which is key for generating income for all racecourses irrespective of their size.
HRI has also informed my Department that the merging of 26 racecourses for the sale of media rights has been key to delivering significant revenue increases over the past ten years. While the details of the media rights allocated to racecourses is commercially sensitive, overall grade 2 tracks have seen strong growth since the last deal was agreed.
I thank the Minister of State for his reply. I have a concern over how equitable the media rights contract is. Appearing before the Oireachtas Joint Committee on Agriculture, Food and Marine on 15 June, the CEO of HRI said that it is taking the market rate. I believe this is incorrect. Since the transfer from the Turf Club, its take has more than doubled from 7% to 16%. The corresponding market rate in the UK is completely different from that in Ireland. Ultimately, the breakdown is such that the smaller tracks are not getting their fair amount of funding as a result. I will table several questions on this to break it all down. I appreciate that there may be some commercial sensitivities. Given the amount of State funding being given, it needs to be distributed equitably across racecourses in Ireland.
Smaller racecourses have gained from being aligned with the larger racecourses and this has enhanced their value. Media rights agreements are subject to approval by HRI and the 26 racecourses involved.
While I take on board the points the Deputy has raised and am happy to discuss it today, racecourses also contribute an element of their sponsorship income to prize money with bigger tracks providing a more significant percentage - at least double - with the majority of funding coming from HRI and then owners.
During the Covid-19 pandemic, HRI allowed all tracks retain whatever sponsorship they had while racing took place behind closed doors. Obviously, that was a very difficult time for racecourses.
As provided in legislation, HRI has operated several different racecourse capital schemes over the years. These investments have allowed racecourses to install fit-for-purpose infrastructure for both participants and patrons.
During the period from 2015 to 2019, a total of 23 racecourses received financial assistance from HRI under this measure involving grant aid of €29.5 million with a total investment cost of €135 million, exclusive of VAT. Grant aid was generally provided at a rate of 40%.
We need to dig deeper into this and consider smaller racecourses such as Thurles and Kilbeggan. The reality is that HRI has mainly used racecourse revenue received through the media rights fixture charge on capital programmes on the four largest racecourses, two of which it owns, at the expense of smaller rural racecourses. The Minister previously gave the direction that 50% should be used for long-term infrastructural projects, but that is not happening. We need to dig into the data and break down where the funding is going because this cannot continue. The Minister of State should go around some of the smaller racecourses and he will see some of them no longer have the infrastructure. They are not in good nick. We need to break down where the funding is going. The set-up of the current contract is not viable.
I take on board the Deputy's points and I am happy to go through this in more detail in time. As I outlined in my response, 23 of the 26 tracks have benefited from capital grants for infrastructure work.
It was 40% of the capital infrastructure. There is no doubt that smaller tracks are benefiting from being part of a larger scheme. Where is the great value in terms of media rights when media organisations are looking to buy? The larger race days will attract the highest value. It makes sense that the smaller tracks, which have days that are very important to their local communities but might not be as attractive for media coverage, also benefit from being part of that. As I mentioned previously, all 26 racecourses as well as the HRI approved that media rights deal. I would be happy to go through this in more detail in time.