RaceTech turns 70 – Tom Phillips

RaceTech, the on-track services provider owned by the Racecourse Association, will celebrate its 70th anniversary in November with a pledge from Executive Chairman Tom Phillips to “stick to its knitting.”

In other words, the company that has led technological developments in racing and has never failed to turn up for an engagement, whatever the weather, will carry on doing what it does best. Namely, that covers everything from filming and passing on live pictures of racing for integrity purposes, broadcasters and the racecourse programme, manning starting stalls, providing photo-finish equipment and services, operating and maintaining audio-visual systems, racecourse TV output, public address and radio communications, as well as providing archive services for every race run in Britain for the BHA.

“We’ve not been wholly successful at exploiting commercial opportunities outside racing,” Phillips admits. “We do have a few contracts that are reasonably profitable, such as fitting out university auditoriums, and we’ve looked at doing more audio-visual installations, but it’s a highly competitive market.

“So at the moment we’re concentrating on our core business. Things may change going forward, if we can exploit some of the opportunities that will arise, but they are all within racing, where we have the experience and expertise.”

Phillips, who began his role last year when Maggie Carver took up chairmanship of the RCA, is holding the fort in an executive capacity until the appointment of a successor to Brad Higgins, former chief executive, who stepped down recently after 11 years at the helm.

Having spent 14 years with the Tote as Finance Director and then Chief Operating Officer, Phillips left the pool-betting operator in 2006 and was immediately recruited to the RaceTech board, so he has seen at first hand the company’s biggest reorganisation. From covering all Britain’s racecourses, RaceTech now has one dominant partner, Racecourse Media Group, which acts for 34 Racing UK tracks.

“We were kind of collateral damage after the schism developed between the At The Races courses and RUK,” Phillips points out. “We had been a monopoly provider of outside broadcast and integrity services to racecourses; now we just service RUK. We also provided all starting-stalls facilities but that changed when Arena Leisure took that on themselves, although we still cover the old Northern Racing courses that are now part of Arena Racing Company.

“In hindsight the split was quite a significant change for us. We’d moved from being the monopoly provider, and, if I’m honest, a little comfortable in that role, to the point where we had to justify our existence. So I’ve seen us move from a very profitable situation to one where we are operating on much more limited resources.

“RMG has a very talented team of executives and it’s their job to get the best deal for their racecourses, who are always in the position of wanting to retain as much of their income as they can and to reduce their costs.

“We’ve now moved to a model in which where there is value in a transaction between RaceTech and our customers and stakeholders, RMG wants to keep the value for itself, rather than let it reside in RaceTech. If a third of the racecourses don’t use us but are still stakeholders, that also drives their agenda to say there’s no point in adding value to RaceTech.

“I recently made a presentation to the RCA board and said that I felt our best way forward was to promote what I call a sustainability model. That means we only make sufficient money to do two things – to invest in new equipment and technologies for our customers, as and when they need it, and to ensure there is sufficient profit to fund our pension scheme.”

Ten years ago, RaceTech’s pension deficit was over £10 million. Today, the valuation on an actuarial basis shows a vastly improved position and a deficit of only £1.4m. In addition, £9.5m has been invested in high-definition equipment since a new deal was struck with RMG in 2010 – £6.5m in the first instance and a further £3m when a new three-year contract was signed last year.

Phillips explains: “We cannot be a non-profit-making organisation partly because of the pension fund position but primarily because we need to generate profits in order to invest in new equipment, because technology moves on apace.

“We responded to RMG’s request and under the contract we deliver in excess of 80 per cent of fixtures in HD from four trucks, but we have a standard definition truck that we are converting, which should be online in August and will take us up to more than 93 per cent of all RUK fixtures being produced in HD.

“The quality of product we give the BHA stewards and officials in terms of being able to look at action in HD is very good. And our photo-finish product is leading edge, the quality of prints particularly in poor light has been greatly improved, for instance, and we have invested in new lenses to enhance the images. We do have a fantastic team of engineers, multi-skilled operators, cameramen, directors and producers creating a high class product.

“Meantime, our starting stalls team continues to be world class. They are a great bunch of people, who do a highly skilled and dangerous job but turn out in every weather and never complain.”

Phillips adds: “As technology improves, we will always try to be at the front, researching and developing ever better ways of using and adapting the technology for the benefit of the racing industry, which is why we need to make money to be able to invest.

“The demands of ever-changing technology and the sophistication of viewers and racegoers, who are used to seeing the best quality at home, will drive change. If racing is going to fully exploit its fantastic product, it needs to demonstrate it in the best possible light, which involves ensuring it has the best quality pictures, and that means embracing new technology.

As RaceTech heads towards its 70th birthday celebrations, Phillips regards the position of ARC, which has announced a joint venture with a number of independent racecourses to launch a betting-shop TV channel, as one of the key challenges facing the south London-based company.

“As well as speaking to RMG about another contract next year, the big question is about ARC and its future outside broadcasting requirements,” Phillips says. “We’re obviously hopeful that we can bring ARC back into the RaceTech fold, they are after all, through the ownership of the RCA, our stakeholders but if we are to win that business, we have to be as good and as competitive as anybody else. There are no freebies in this world.

“If we could win back the business, there would be synergies with RUK and its equipment. To share a basic service provision would seem to me to be a bit of a no-brainer, but at the end of the day it’s not just a question of OB. It’s about their media rights and how they are packaged, which is not something we can second-guess.

“We can only do the best we can, emphasise the advantage of equipment sharing on what is a basic commodity, and see where it goes from there.”