Issue 4 - Arena Racing Company

Tony Kelly

Leading the field. As Managing Director of the country’s largest racecourse operator, Tony Kelly’s job is certainly varied, he tells Mel Flaherty.

Wild orchids, newts and red squirrels are probably not top of the list of things that pose a threat for most people. However, Tony Kelly, the Managing Director of Arena Racing Company (ARC), the largest operator of racecourses in the UK, running 17 of the 60 in the country, can tell you they are pretty powerful ‘adversaries’. Each of these has, variously, prevented his company progressing plans for development at some of its sites, and cost ARC dearly in environmental impact studies.

Kelly has become very used to so many aspects of this role being totally out of his hands now. When he originally joined the then AIM-listed Northern Racing in 2004 (the company went on to merge with the former Arena Leisure plc in 2011 with the merged business relaunched as Arena Racing Company last year), he found the racing world very different to everything he had done before, for that reason. He was head-hunted to the position after a seven-year stint as a very young (then early-30s) plc Finance Director, at Hanover International (the hotel company), having previously studied hospitality at Westminster College then working at the Millennium Copthorne hotel group and moving into a Finance Controller position at the leisure group owned by John Nike.

Outside forces

“If you run a hotel group or a leisure business, you are pretty much in control of your product – what you charge, when you open, etc. In this position, you do not absolutely control your destiny – the fixture list is decided by others, the Levy Board decides on the distribution of funds which then affects your prize money policy…,” explains Kelly.

However, he loves the variety that the complexities of this industry bring. One day he could be discussing the implications of taxation for off-shore versus on-shore betting with government ministers, the next schmoozing bankers or sponsors at the track; working up group marketing or investment plans; negotiating media rights (ARC jointly owns the At The Races TV channel with BSkyB) or talking to the bookmaking groups about working together better. And all of this is done under the relentless spotlight of a daily newspaper for the industry, The Racing Post, which has meant he has had to exercise his public face more than ever before.

Last year, Kelly admits, was probably one of the toughest in his career to date. Running catering at two Olympic venues – Eton Dorney and Greenwich Park – would be enough for most people (while it did take a lot of resource, Kelly said the company managed to make money from the venture and that, thanks to his background, the challenge did not really phase him). The biggest hurdles of 2011/2012 were presented by the integration of the Northern and Arena businesses. While there were many positives, with better efficiencies implemented across the group, there were inevitably some very difficult decisions to make.

As well as a programme of redundancies, ARC announced the closure of both Folkestone (hopefully temporarily) and Hereford racecourses – Folkestone has a chance of becoming commercially viable with major redevelopment, but the proposed scheme there was rejected by the planning inspectorate at national level (further consultation is on the cards after ARC’s appeal) Kelly and some of the other board members did not shy away from facing up to the impact of their decisions. In fact they went along to the last race meetings at both Folkestone and Hereford and allowed anyone with questions to come and talk directly with them which, Kelly recalls, was upsetting yet necessary in a sport that incites such passion among its followers.

Goal setting

Kelly himself is not a dedicated follower of racing. Before joining Northern, he had only ever been to about half a dozen race meetings, although he has come to develop a real admiration for the horses and riders, particularly in jump racing. However, he is an avid sports fan, with football, or more specifically Liverpool Football Club, being his absolute passion.

He half jokes that it is his destiny to become Chief Executive of the club – with this job on his CV, it no longer seems ridiculously out of his reach. About 25 years ago he applied for the job of Commercial Finance Director there, knowing he was totally unqualified for it, just so he could get a rejection letter from his beloved club. He has some way to go, however, before he can convince his wife that Toxteth would be a nice place to live.

And he has plenty to keep him occupied while he is chasing that dream. The constant industry-wide issues that he is involved in have the potential to make a massive difference to the fortunes of the sport, particularly the overhaul of the outdated Levy system. Kelly says this is making British horseracing lose its competitive edge as it is unable to offer prize money as high as in many other countries. However, discussions have been going on for a good decade and Kelly believes, realistically, that changes are still a good five years away from being fully implemented.

Now that ARC itself is fully integrated, running from its new head office almost next to the Tate Britain at Millbank, London, Kelly is turning his attention to the challenges of increasing custom at the courses.

Horseracing is the second most popular spectator sport in Britain, but it is a long way behind football at number one. The average race fan attends around 1.2 times a year and Kelly says a lot of work needs to be done to break down misperceptions and ‘fears’ about racing and to broaden the audience, particularly to attract a younger crowd.

A lot has been already been done to introduce events such as ladies’ nights and live music, but ARC is now working on improving catering with some new concepts to be trialled at Uttoxeter Racecourse, with the potential to roll out across some of the other ARC sites. More significantly, in the Spring, the group will launch its first company-wide membership scheme, whereby race fans will be able to pay an annual fee to gain entry into all of the ARC courses. At the time of writing, discussions were underway for a six-figure sponsorship deal giving marketing rights on all communications with members and on letters sent with posted tickets (some 1.5 million tickets a year are sent out in advance of ARC race meetings) and in post-event communications. Kelly hopes that the club will reach a target of 50,000 members within three years and is also looking at introducing a kid’s club and family membership categories.

In addition, ARC would love to unlock the potential of some of the highly desirable land surrounding some of its sites. There has been talk for years of adding a casino and extending the existing hotel at Wolverhampton Racecourse but Kelly says Newcastle Racecourse is most likely to change first. It sits on 812 acres of land featuring nature trails and woodland which Kelly says would make a fabulous eco holiday/leisure complex. Subject, of course, to all being well with the red squirrels, newts and wild orchids.

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