Racing: Top jockey calls for action on prize money - This is Gloucestershire Racing: Top jockey calls for action on prize money - This is Gloucestershire

Saturday, July 14, 2012

Racing: Top jockey calls for action on prize money - This is Gloucestershire

Racing: Top jockey calls for action on prize money - This is Gloucestershire

On The Rails with Jonathan Herbert:

Top jockey Robert Thornton has joined the calls for action over dealing with low levels of prize money in racing.

  1. Robert Thornton

The 15-time Cheltenham Festival winner says it is “ridiculous” some races are worth less than when he first started riding nearly 20 years ago.

Away from the top levels of the sport at Cheltenham, where tariffs aren’t an issue, prize money sometimes hardly covers training fees.

The decision by top trainers to boycott a £3,000 race at Worcester because prize money fell £900 below tariff – the figure recommended by the Horseman’s Group – brought the issue into sharp focus.

With the agreement of other trainers who pulled their horses out, Nigel Twiston-Davies’ Moulin De La Croix walked over.

The winnings will go towards paying fines imposed by the British Horseracing Authority upon trainers who boycotted the race.

Among those to declare their horses as non-runners were leading lights Jonjo O’Neill, Philip Hobbs and Donald McCain.

Thornton (inset) believes putting on fewer ‘poor’ races, meaning the money currently available isn’t spread as thinly across the sport, was one possible solution.

He also suggested bookmakers, through the Levy Board, and the owners of racecourses could be asked to contribute more.

“It definitely needs sorting out, it’s not good for owners, it’s not good for anybody,” said Thornton, who turned 34 today.

“I’d love to see from now on that races below tariff have no entries, but it’s about getting everyone singing from the same hymn sheet.

“The lower levels need to be brought up. I have no idea how it will be resolved and I don’t think it will be resolved quickly.

“It’s probably not a great way of looking at things and it’s not going to suit everybody, but less of the poor racing is a route I’d go down.

“I don’t know whether it would work or not and I don’t pretend to be that much in the know about it all, but it seems ridiculous that we’re going round now for less money than when I first started nearly 20 years ago.”

Thornton said the decision, led by trainer Charlie Mann, to boycott the Worcester race wasn’t a move that would have been taken lightly.

“The only thing that was probably similar was the threat of strike action over the whip rules, but we’re not the sort of people to do something like that,” he said.

“I read a comment from one bookmaker that what happened at Worcester isn’t the way to treat the betting public, but what about us?

“I realise that without them maybe there wouldn’t be a sport, but we’re providing the sport as much as anything.”

The chairman of Cheltenham and Three Counties Race Club, Mary Philpott, said the trainers had no option but to boycott the race in order to highlight the issue.

She wants bookmakers to contribute more money to the sport.

“My own personal view is that prize money is too low,” she said.

“I’ve owned racehorses and no one goes into it looking to make money, but it would be nice to get a bit back for winning or being placed.”

Racecourse owners Northern Racing and Arena are in discussions with the Horsemen’s Group – representing owners, trainers, jockeys and stable staff – aimed at making sure all their races meet tariff.

Boycott stirs up mixed emotions

THE decision to boycott a race at Worcester in protest at prize money has received mixed views from trainers in Gloucestershire.

Kim Bailey didn’t have a runner in the race but he supported the move and would have taken part in the boycott if he had.

“We, as an industry, desperately need people to own racehorses and enjoy their racing,” said the Andoversford trainer.

“We employ a large number of people and not only that but a large number of people including vets, blacksmiths, tack shops, feed merchants, farmers etcetera depend on those owners supporting racing.

“We have a great sport and a healthy one, which considering the financial climate is staggering. What we don’t need to do is shoot ourselves in the foot by offering peanuts as owners are certainly not monkeys.”

Stow-on-the-Wold trainer Graeme McPherson said it was good that prize money had become a high-profile issue.

But he added: “I see that there is a need to do something about levels of prize money but I’m not convinced that this sort of pressure is the right way to go about it.

“I see the sponsors are really disappointed and Worcester Racecourse will be too.

“I think it’s about going back to basics. For the racecourses to put more money into the prize fund they have got to generate more revenue.

“That means getting more people coming in through the gates. We need to work on persuading people to go racing on Saturday rather than the football, or on a Thursday rather than going to the pub.

“I’m sure owners with horses in the race at Worcester were in support of the move, but owners would have had to pay an entry fee.

“It seems that at the same time owners are saying there’s not enough prize money they’re are writing off money just like that.”

Trainer Chisman fears further woes

Harry Chisman’s campaign to arrest the sharp decline in the number of racehorse owners because of low prize money was highlighted in On the rails in May.

Reacting to the trainers’ boycott at Worcester, the Stow-on-the-Wold trainer said: “I totally sympathise with their frustration but the action is going to be ineffective overall because it doesn’t have the support of enough owners.

“Already the British Horseracing Authority are getting bolshie and saying they’re thinking about fining trainers involved for breaking the rules.

“It’s just more fragmentation.

“It’s the same as the deal with Betfair. Signing a deal with one betting company isn’t going to help the overall position.”

Market Savior? Stocks Might Be 50% Lower Without Fed - Yahoo Finance

A report from the Federal Reserve Bank of New York suggests that the bulk of equity returns for more than a decade are due to actions by the US central bank.

Theoretically, the S&P 500 (^GSPC) would be more than 50 percent lower-at the 600 level-if the bullish price action preceding Fed announcements was excluded, the study showed.

Posted on the New York Fed's web site Wednesday, the study sought out to explain why equities receive such a high premium over less risky assets such as bonds.

What they found was that the Federal Reserve has had an outsized impact on equities relative to other asset classes.

For example, the market has a tendency to rise in the 24-hour period before the release of the Fed's statement on interest rates and the economy, presumably on expectations Chairman Ben Bernanke and his predecessor, Alan Greenspan, would discuss or implement a stimulus measure to lift asset prices.

The FOMC has released eight announcements a year at 2:15 ET since 1994. The study took the gains in the S&P 500 from 2 pm the day before the announcement to 2 pm the day of the statement and subtracted that market move from the S&P 500's total return over that time span.

Without the gains in anticipation of a positive Fed action, the S&P 500 would stand at just 600 today, rather than above 1300.

"I would conclude that correctly analyzing Fed moves is much more important than stock picking," said Brian Kelly of Shelter Harbor Capital. "If you want to generate alpha, you should trade the stock market 24 hours before an FOMC meeting. Simply follow the trend for that 24 hours and you will outperform."

The chart shows the effect to be significantly pronounced in the aftermath of the tech bubble when Greenspan re-inflated stock and housing prices by slashing rates. It widens even further in the period since the financial crisis of 2008 as the market became beholden to the Fed's use of its balance sheet to add liquidity to the market.

"Blame Greenspan for this S&P 500 effect... it's his free put," said Robert Savage, chief executive of research site and formerly managing director of FX Macro Sales at Goldman Sachs. "Since 1994, the battle of central banks hasn't been to fight inflation, but rather to smooth out the business cycle and credit. The convergence of global rates and inflation left the decisions of the FOMC as the key variable for S&P 500."

The market is down six days in a row currently on the concern that the Federal Reserve will not embark on its third round of so-called quantitative easing anytime soon. Minutes from the central bank's last meeting, released Wednesday, reinforced the concern that the economy is muddling along enough to keep the Fed on the sidelines.

To be sure, one cannot look at these Fed actions in a vacuum and conclude the S&P 500 would plummet 50 percent if the Fed were to undue all of its supportive measures of the last two decades. But that doesn't mean this exercise can't be instructive.

For example, proponents of index funds will often argue their case by using data that shows a significant drop in S&P 500's yearly returns if you took out the five best days of that particular year. The point: you need to always be fully invested so you don't miss one of those days, which account for the majority of the market's annual return.

The Fed's next announcement is due August 1st and it would seem by this study, one would want to make sure they are invested in the market by 2pm on July 31st,

"It's a QE world," said Josh Brown, an investment advisor and popular author of The Reformed Broker blog. "We're all just trading in it."

For the best market insight, catch 'Fast Money' each night at 5pm ET, and the 'Halftime Report' each afternoon at 12:00 ET on CNBC. Follow @CNBCMelloy on Twitter.

Got something to say? Send us an e-mail at and your comment might be posted on the Rapid Recap! If you'd prefer to make a comment, but not have it published on our Web site, send your message to

More From CNBC

Money Watch: Pay loans or save for kid's college? - USA Today

Q: My wife and I have remaining federal student loans of $26,000, with a 3.9% interest rate. Is it best for us to increase our monthly payment from $175 to $300 to pay it down more quickly? Or should we put $125 a month into a 529 plan for the children we plan to have in the next two years?

A: The decision to pay down your student loans or to save money in a 529 plan should include both the financial and emotional aspects.

First consider your overall financial situation. For example, setting up an emergency fund and getting your full 401(k) employer match may be more beneficial uses for the extra cash.

Then compare the advantages of paying off a student loan against what you would gain by putting money in a 529 plan:

A 529 plan is federally tax free and many states also offer tax breaks. But remember that the investment return is not guaranteed. You will be comparing an uncertain investment return on the 529 plan for a child you plan on having to a guaranteed interest rate on your own student loans.

With federal student loans you can deduct up to $2,500 in interest. And you can take it without itemizing on your 1040 tax form. The deduction is phased out for taxpayers with adjusted gross incomes of $60,000 to $75,000 (single filers) and $120,000 to $150,000 (married filing jointly).

Once the loan is paid off, you will have extra monthly cash flow that you could use to save for college. Sometimes the emotional satisfaction of paying off the loan trumps other financial considerations.

Since your children are "planned," you can set up a 529 plan and name yourself as the beneficiary, and change the beneficiary later. The downside of a 529 plan is that withdrawals that are not used for qualified college expenses are subject to tax and a penalty.

Since you are still planning for a family, keeping your options flexible is a good approach. You can now save money in a taxable account and make a lump sum initial contribution to a 529 plan after your child is born.

But keep in mind that saving for retirement is usually a higher priority than saving for college.

Tim Kober,NAPFA-registered financial adviser

Cedar Financial Advisors, Beaverton, Ore.

Read previous Money Watch columns:

No comments: