Page last updated at 07:32 GMT, Friday, 26 March 2010

Dubai horse racing industry defiant

By Malcolm Borthwick
BBC Middle East Business Report, Dubai

Horse racing in Dubai
Horse racing in Dubai has come a long way in three decades

"I've never seen anything like it. It's like something out of science fiction, the Planet Dune or something," Sting said as he gazed at the futuristic structure in front of him.

The rock star wasn't talking about the world's tallest building newly opened in Dubai, but the grandstand of the city's new racecourse, Meydan.

Sting was in town to perform at Super Thursday, which is the traditional curtain-raiser for the world's richest race, the Dubai World Cup.

Meydan is a statement of how serious Dubai is about horse racing, and a sign of defiance in the midst of a property crash. It cost more than $1bn to build.

Great strides

Horse racing in Dubai has come a long way since it started on a dusty camel track three decades ago.

The total prize pot for the Dubai World Cup race meet this weekend is more than $26m. It's a lucrative event for racehorse owners, which is why it attracts the world's best trainers and jockeys.

He [Sheikh Mohammed] owns 50 or 60 of the best stallions around the world and that derives a tremendous income for him
John Warren, the Queen's racing advisor

But how does Dubai make money out of racing when its biggest potential source of income, gambling, is illegal and the racing season only lasts for three months?

Meydan hopes to generate money from a five-star hotel which overlooks the track, as well as concerts and conferences.

"We also look at making an indirect profit out of Meydan," Mohammed al-Khayat, commercial director of Meydan says.

"Dubai got lots of recognition when the world's tallest building, Burj Khalifa, opened," he adds.

"It's not just a skyscraper, but an icon for the region. Whenever you have iconic developments, you have tourists coming in to see what Dubai has to offer them, and when they are here, they use the hotels and shopping malls."

Stud fees

The man behind Meydan and the Dubai World Cup is Dubai's ruler, Sheikh Mohammed bin Rashid al-Maktoum.

He went to his first race at Newmarket in the 1960s when he was studying at Cambridge and is widely considered to be the most influential figure in the sport.

Sheikh Mohammed bin Rashid
Sheikh Mohammed bin Rashid Al Maktoum is the sport's prime mover

He's owned a string of former champions of the Dubai World Cup including Street Cry, Singspiel and Dubai Millennium.

But when it comes to racing, the big money is not made in prize money, it's made in stud fees. Sheikh Mohammed bought his first stud farm at Newmarket, England in 1981.

Now he owns vast tracts of farmland in England and Ireland, and his racing empire spans the globe.

Kentucky is the centre for his US breeding business and he also has racing interests in Japan.

'Tremendous income'

Two years ago, Sheikh Mohammed pulled off one of the biggest deals in the history of racing when he bought Woodlands Stud in Australia for a reported $420m.

"His stallion investment has become vast," according to John Warren, who is the Queen's racing and bloodstock adviser.

"He owns 50 or 60 of the best stallions around the world and that derives a tremendous income for him," says Mr Warren.

"For example, Sheikh Mohammed owns the sire of last year's worldwide champion Sea the Stars.

"That stallion called Cape Cross covers up to 150 mares in a season and his fee to cover each mare at present is around $50,000. However, his fee could rise like some of Sheikh Mohammed's other stallions and go to more than $150,000."

'Driving element'

Money aside, Sheikh Mohammed is passionate about the sport.

He's an accomplished horseman himself and the winner of numerous endurance races, where competitors race on horseback for several hours over long distances.

He is also very hands-on and makes decisions on everything from breeding to what his horses eat at his Godolphin stables in Dubai.

"It is unquestionably his love of horses that is the key driving element, rather than any financial gain," John Ferguson, Sheikh Mohammed's bloodstock adviser told the BBC.

"Horse racing is different to any other sport in that you have the industry."

Mr Ferguson said owning racehorses was about pleasure rather than monetary gain.

"When you see the owners in the winner's enclosure and you see that feeling of sheer joy, you know they are not delighted because of the prize money they have won, they are delighted at what they or their trainer and horse have achieved."

Strong patronage

Sheikh Mohammed's spending on horses and stud farms easily runs into billions of dollars, and he employs thousands of people on stud farms and in stables around the world.

The Dubai debt crisis has raised fears that he could curtail his spending on horses, but Mr Ferguson insists it has remained strong.

"In the UK, unquestionably, we bought very similar numbers in 2009 to 2008. In Australia we bought about the same. In the US the same and in Japan the same."

Despite Dubai's debt woes, the ruler of Dubai's spending and patronage of the sport has remained strong.

Those close to him say it is more than just a business. The big question is whether his heirs will share his love of the sport.

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