IT’S one of the biggest spectacles of the sporting year – and a racing certainty that more than £100m will be ploughed into the local business economy as a result.
But as horse racing comes under starter’s orders for this year’s Cheltenham Festival, a high-profile insolvency case means that some runners won’t even be leaving their stables.
In just four days between March 12 and 15, Britain’s biggest race meeting will see more than £600m gambled; over 275,000 pints of Guinness sunk; and approaching 25,000 bottles of Champagne uncorked.
Not to mention an unpredictable number of lost shirts – including many from Yorkshire and the North East as part of the annual pilgrimage to the Cotswolds.
But as this year’s festival gallops ever closer, many horses will not get past the first fence. In fact, they won’t even make it into the horse box.
And that’s because all 23 racehorses that race in the line green colours of Layezy Racing have been banned from taking part, after the man behind the members’ club shut it down and filed for bankruptcy.
The collapse into bankruptcy followed a headline-grabbing investigation by sports journalists from the Daily Mail, which raised questions about how the money of more than 2,000 investors was being spent.
Many of the racehorses were trained in Yorkshire and the North, including York, Middlesbrough, Stockton-on-Tees and Doncaster.
Amid the insolvency, racing’s ruling body, the British Horseracing Authority, took immediate action, issuing this formal statement:
“The BHA was alerted on Thursday 14 February to the fact that Mike Stanley, owner of 23 horses through the Layezy Racing Owners Club, declared himself insolvent on Monday 11 February.
“Under the Rules of Racing, insolvent individuals or entities are not permitted to own and run racehorses. As such, those horses will not be allowed to run until further notice.”
Club members have claimed that they too now face the threat of insolvency and bankruptcy.
Around 2,000 people collectively invested millions of pounds – including life savings and pension funds. And they now fear it’s a long shot that they will see much of their money again.
News of the insolvency is a far cry from the boost to business finances that Cheltenham traditionally generates – handing a revenue lifeline to many High Street businesses and SMEs in particular.
Indeed, bankruptcy and insolvency are among the last words you would expect to hear from the lips of the 250,000 racegoers – including millionaire businessmen, top footballers, chart-topping singers and members of the Royal Family – who attend each year.
Like Harrogate, Cheltenham is a spa town. And the festival is big business and a much-needed cash injection for traders large and small in this rural part of Gloucestershire.
Business analysts predict that this year’s festival is worth upwards of a record £100m in economic terms to the district.
To place that into context, that’s double what the Tour de Yorkshire generated for the Yorkshire economy when men in a different kind of saddle pedalled around Leeds, Harrogate, Scarborough, Bradford, and Sheffield in 2017.
From hotels and guest houses to restaurants and pubs; chauffeur-driven cars to suit hire companies; from corporate hospitality agents to security guards – everyone’s a business winner. And not just the bookmakers!
The stats are staggering: over 150,000 passengers use the Cheltenham Spa train station; more than £2.3m is withdrawn from the on-course cash machines; and around 6,000 staff, including 400 chefs, are employed by the course.
There are more than 100 helicopter movements each day to and from the festival.
And the value that the meeting adds to the aviation business is underlined by the fact that Ryanair lay on around 25 extra flights between Dublin and Birmingham just for the week.
That’s a fleet of 737s carrying around 25,000 passengers from Ireland … all spending many of their Euros and Pounds with local businesses.
Cheltenham’s £7m pot of prize money attracts runners from all over the UK and Ireland, with stables across Yorkshire and the North East among those chasing – quite literally – a bumper payday.
Sue Smith – wife of show jumping legend Harvey – trains just a canter away from our Guiseley office, her windswept stables perched at High Eldwick on the top of Ilkley Moor between Leeds and Bradford.
She will be among those at Cheltenham flying the flag for Yorkshire, alongside Phil Kirby, Brian Ellison, Tim Easterby and Micky Hammond who all train near York.
Thankfully, none of them have been hit by the insolvency of Layezy Racing.
It is a bankruptcy which has led to calls for greater financial protection of those individuals and businesses who invest in the sport.
Given the negative publicity that the insolvency has brought to the sport on the eve of its showcase meeting – televised to millions around the world – that would seem to be an odds-on favourite course of action.
For more information on how our licensed insolvency practitioners and businesses recovery teams in Leeds, Bradford, Harrogate and Darlington can help, please call us on 03300 244 660 or email firstname.lastname@example.org