Loko Trans v Dostihový spolek, Part 1. Introduction

Quite bitter disputes about the (mis)management of Pardubice racecourse go back a long time, and have escalated now that Facebook makes it easy for angry views to be expressed. Dostihový spolek, organiser of events at Pardubice racecourse, was set up in 1993 by a group of local enthusiasts who wanted to ensure the future of the Velka Pardubicka and of racing at Pardubice. The shareholders in Dostihový spolek were the Town of Pardubice and a considerable number of local enthusiasts, most of whom held just a few shares. In 2013, a company called Bělecký Mlýn, headed by Richard Benýšek, bought up 23% of the shares in Dostihový spolek. For an interview with Richard Benýšek, click on to  http://www.dostihovy-svet.cz/en/node/1316.

A few years ago, a group of entrepreneurs with Josef Váňa senior as a spokesman wanted to take control of Pardubice racecourse and manage it more dynamically and more efficiently. This group gave up acrimoniously when it was unable to purchase enough shares to take control of Dostihový spolek in order to impose its vision. At the beginning of this year, Karel Jalový, whose company Loko Trans owns the Lokotrans racing stable, entered negotiations with Dostihový spolek. Karel Jalový wanted to purchase the racecourse naming rights and sponsor the Velka Pardubicka, but on condition that he could purchase 34% of the shares in Dostihový spolek. This would presumably have involved buying most of the shares owned by the Town of Pardubice. However, the Town was not willing to sell, and the negotiations dragged out, and became bitter. It seems that the racecourse naming rights have now been sold to the Town of Pardubice and, I think, the Pardubice Region, for considerably less than Loko Trans had offered.

Who is Karel Jalový? He is a businessman whose company provides a range of services connected with renting out, maintaining and repairing railway rolling stock. He is a well-established major racehorse owner – the owner of Ribelino, winner of the Velka Pardubicka, and Al Bustan, winner of the Gran Premio di Merano and the Swedish Grand National. He has been a big sponsor of the European Jockeys’ Cup since its inception. He seems to be clearly committed to the best interests of Czech horseracing. There are many people who think that Pardubice racecourse has been mismanaged and needs to be taken over by an entrepreneur with a proven management skills whose commitment to Czech racing is clear. Karel Jalový fits that description.

So why does the Town of Pardubice not welcome Karel Jalový’s interest? The Town has not had much joy as the main shareholder in Dostihový spolek in the last almost thirty years, and the town council, with Dostihový spolek, has not shown any ability to make the famous racecourse into a profitable or efficiently-managed enterprise. However, the Town might reasonably point out that no sports club in the Czech Republic has grown prosperous in the past thirty years, and no major annual sports event has generated profits. One of the functions of the civic authorities all over the country has been to support and maintain sports and other cultural facilities and events, for the benefit of the local people that they represent. The Town of Pardubice has pumped a lot of money into keeping Pardubice racecourse afloat, and should be willing to continue doing so, if necessary, because it is unthinkable that Pardubice should lose its Velka, or, for that matter, its ice-hockey club, its speedway track and the other events and facilities that make the town what it is.

Rather than collaborate with Loko Trans and Karel Jalový, the Town found a different solution for this year. On June 10th, the government of the Czech Republic announced that would support a proposal of the Ministry of Agriculture to provide five million Czech crowns (almost EUR 200 000) in support of racing at Pardubice. This amount is to be provided from the budget of the Ministry of Agriculture. According to information provided by the eagri.cz server, the support “will contribute towards ensuring the quality of the programme and retaining one of the most prestigious horse races in Europe, which is inherently linked with the Czech Republic”. The funding has been assigned to the Town of Pardubice (i.e. not directly to Dostihový spolek).

Many people “strongly believe” that privatization and entrepreneurial action is a cure for all ills. Others think that entrepreneurs play important roles in our society, but that their lack of long-term commitment to unprofitable but desirable activities and services needs to be taken into account. Great racing events, like the Cheltenham Festival and Royal Ascot, can be run by entrepreneurs as profit-making enterprises. However, most horseracing events and facilities in the Czech Republic and elsewhere, cannot, and rely on support from the local authorities and communities. They are not profitable businesses. In general, there is no hope in the forseeable future of making Czech racing into a profitable undertaking, but that does not mean that it should shut down.

However, there is a single horse race in the Czech Republic that should probably be able to generate a lot of income, and that is the Velka Pardubicka. It is ironic that the Czech government is offering financial support for the one viable racing day in the Czech calendar, which will attract enormous public interest, a vast crowd and a vast televison audience for over 6 hours of uninterruped viewing. Czech racing needs to talk to the government and to the ministries about the best ways of providing our sport with the support that it needs. It is fine that the government is showing some goodwill, but do the ministries understand how racing can best be helped?   

This is Part 1 of Loko Trans v Dostihový spolek. Part 2 of Loko Trans v Dostihový spolek will be my translation of a press statement issued by Loko Trans, under the title Press Statement of the Loko Trans Group. Part 3 of Loko Trans v Dostihový spolek will be my translation of a press release from Dostihový spolek, dated 02. 08. 2019, under the title Ministerial Protection is not only for the Velka Pardubicka