The rapid rebuttal unit at Jockey Club Racecourses had a busy Monday morning, following a front-page story in the Racing Post which suggested that Crabbie’s will not extend its sponsorship of the Grand National beyond 2016, the third and final year of its current contract. A brief quote from John Baker, the JCR executive in charge at Aintree, stressed that discussions are ongoing between track and sponsor, and that “no decision have been made by either party” with regard to 2017 and beyond.
It is, of course, only natural for the two sides in a valuable business contract to assess the situation when it has a few months to run. Halewood International, the Merseyside based drinks company that owns the Crabbie’s brand, may yet decide that the fit with Aintree is sufficiently strong and profitable to merit another deal.
But at the same time, the law of diminishing returns is natural too, and the value of a specific sponsorship tends to reduce over time. As a result of Crabbie’s investment in the National, millions of people have become aware, or more aware than they were before, that the drink exists, and since it has been around in its current form only since 2009, that is an impressive number. When all is said and done, though, it’s boozy ginger beer. There is only so much to know, and another three-year deal could simply end up repeating the message to those who have heard it already.
Whatever the value to Crabbie’s of a new three-year deal for the National, at some stage a horse race that is part of the fabric of British life is always likely to be more valuable to someone else. It is also the only major race which has maintained its audience following the switch from the BBC to Channel 4, though there will never be quite the value attached to airtime on a commercial station as there is on the otherwise adverts-free national broadcaster. The association with the National has been a huge boost to Crabbie’s, and it will not be a sign of failure or disappointment on either side if, from 2017, it boosts something else instead.
The (possible) availability of the Grand National sponsorship is also interesting in the light of the current wrangling over the BHA’s Authorised Betting Partner status, which will be introduced at the start of 2016. It is not a link that either the BHA or JCR were keen to discuss on Monday, and it may well be that, if Crabbie’s decides to spend its marketing budget elsewhere, another brand from outside racing and betting will step in to replace it. The Grand National is, after all, the one race all year that attracts huge attention not only in Britain, but around the world.
But it would be immensely attractive to a big bookmaker too, and as such, a big carrot to dangle in front of dithering executives as they weigh up the pros and cons of ABP status. From 1 January, only firms that agree a deal to return money to racing from offshore betting profits will gain ABP status, and thus be allowed to sign new sponsorship deals.
The aim of the ABP scheme is to establish the principle that offshore betting operations, which evade the legal requirement to pay the racing Levy, need to make a contribution to the sport first and then plan their marketing spend, including sponsorship, after that.
In the weeks since it was announced, most attention has focused on the negatives for bookmakers if they are not ABPs on 1 January, with the inability to sign new sponsorship deals with many major tracks being the most obvious of these. The Cheltenham Gold Cup will need a new sponsor to replace BetFred from 2017 as a result, and several other high-profile sponsorships also appear to be under threat.
But there will be positives too for those that sign up, and for the first to break ranks in particular if they can sweep up some prime deal from non-ABP competitors. The moral argument, that bookmakers should contribute to racing from their offshore profits because it is right and fair, has not been abandoned. But the ABP scheme is an attempt to back it up with a business argument too, ahead of the proposed introduction of a Racing Right to establish the principle in law.
The timing might be a coincidence. For the biggest betting firms, though, even the possibility that the Grand National could be in need of a sponsor sooner rather than later might feed into the calculations, and nudge them a little closer to signing on the BHA’s dotted line.
