Charlie Methven: Looking at form in the two-horse race

Betting journalism has been a backwater of Fleet Street for most of its history. But in recent times it’s been the subject of a closure, a sale and a launch –  and has captured the attention of media commentators

The daily betting newspaper, The Sportsman, I founded in 2006, folded a year ago after around 200 editions. The Racing Post was sold last week to FL Partners, a consortium of Irish investors including former Post editor Alan Byrne, for around £170m. And soon to launch is weekly Racing Ahead Weekend, brainchild of tabloid racing sub Steve Mullen.

With each event, numerous learned analysts have passed judgement. Perhaps predictably, those judgements have been wide of the mark: this market is niche and involves issues and relationships which few outside ‘the game’– as those involved in racing and betting describe their mutually-dependent industries – will ever appreciate.

Firstly, for reasons of real importance, the sale of the Post. Widely expected by industry insiders to go for over £200m, the sale price is, I believe, a disaster for Trinity Mirror chief executive Sly Bailey.

Early bidders

The 14 early bidders – one of whom I was advising – were informed by NM Rothschild, TM’s advisers for this deal, that ‘only those lodging indicative bids in excess of £200m would even be in the ballpark”. My friends were in at £170m, with the will to go higher, and barely received the courtesy of a proper telephone conversation.

Former Sportsman backer Andy Stewart – a legendary City figure – was straight in with £200m, yet was also ordered from the room.

Rothschild, instead, quickly narrowed the field down to a couple of bidders.

Inevitably, having dispelled the challenge of some serious outfits, the remaining bidders used the following months to, ahem, clarify their original offers. ‘Sorry, Sly, did we say £215m? Slip of the pen. We meant £190m.’And then £180m. And then, eventually, £170m.

That this is probably about what the Post is actually worth should be of small comfort to TM shareholders: there was a vanity value to the Post that should have produced a far higher price to the right buyer.

In fact, the Post – which makes around £17m a year – should theoretically have earned a higher price on its own merits but there were, and indeed are, complicating factors.

One is cover price, which TM has hiked from 90p to £1.50 in less than a decade. All relevant analysis shows that these increases are already stretching the Post’s readership, with more punters selecting which days they buy, rather than simply taking it every day.

Substantial staffing savings, meanwhile, will be tough, with an active NUJ membership of something like 90 per cent of all Post journalists.

More significant yet is the situation online, where revenue growth is most obviously expected. The betting – read cash-producing – side of racingpost.co.uk is a joint venture between the Post and satellite television channel Racing UK (which, to declare another interest, I also advise). FL Partners will be able to invest all they want, but they’ll have to share the proceeds of the online cake they bake.

The good news for the Post and its readers is that, with the return of Byrne, a sharper, more focussed newspaper will result. His first move as chief executive has been to shuffle former editor Chris Smith – a production man by background – sideways and promote former sports betting editor Bruce Millington to the chair.

Millington is driven and an inspirational leader. The Post may still be an expensive daily buy, but this team will bring out a good newspaper.

Barrelful of salt

All of which is bad news for Racing Ahead Weekend. Steve Mullen may say he’s not intending to compete with the Racing Post, but take that with a barrelful of salt.

Mullen needs 25,000 or so racing punters to buy his paper on a Saturday morning, and those are either current or previous customers of the Post.

When The Sportsman launched it was met with an unprecedented marketing campaign aimed at shoring up the Post’s core constituency, the regular racing punter.

It targeted brilliantly our early weaknesses in the provision of racing data: the crucial pages which are the daily bread of the serious racing punter.

When, eventually, our sophisticated software enabled us to replicate the Post’s form and racing cards, our circulation began to rise exponentially. Being cheaper than the Post is well and good, but if you’re less reliable in such a key financially sensitive area then punters do take note.

If, as I suspect, Racing Ahead Weekend is planning to save money by taking this key data page-ready from PA then Mullen should expect a long and ultimately unsuccessful battle.

One thing Mullen has got right is to come out on a weekly, rather than daily, basis. By the time The Sportsman folded, our Saturday paper was comfortably profitable, with a fully paid-for circulation of almost 25,000, but the weekday version lagged far behind.

None the less, our experience was that, even on Saturday, only once our paper was both cheaper and arguably better than the Post did we start to build a significant following.

Apart from the data, a key Saturday issue was the promotion of a recognised headline tipster: ‘Oddscracker’Sam Turner (now of the Daily Mail), against Tom Segal, the ‘mighty Pricewise”.

Rocky roads

For its part, in the Eighties and Nineties the Post invested £45m – a figure which puts The Sportsman’s £11m ‘losses’into perspective – in pursuit of the old Sporting Life.

Again, it only gained ground properly once its product was markedly superior in terms of presentation and data and Pricewise had become a recognised feature. No-one is more aware of this history than the Post’s previous editor, Alan Byrne.

So, what to expect? Two rocky roads is my best guess.

For Alan Byrne and the Post, an unremitting attempt to increase revenues and profits to a level which justifies the money tied up in its purchase.

And, for Mullen and Racing Ahead Weekend, a fight against time to reach a bookmaker advertiser-attracting circulation before the cash runs out, while battling the distribution issues that beset all small-circulation publications.

My unsought advice to Racing Ahead Weekend is as follows. This is a cash-aware environment: saving a punter 50p on a Saturday morning is less attractive if he feels he may come up £5 short on Saturday afternoon. Every paper that competes against the Post without competing seriously on data and tipsters will be a losing paper.

The true tale of The Sportsman is that there is room for a second betting paper on Saturdays, but that it has to be both better and cheaper than the Post.

Good luck Racing Ahead Weekend.

Charlie Methven is the former editor-in-chief of The Sportsman

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