BE and £££

SpottedCat

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Theirs not ours for once!

I've been to quite a lot of events recently in one capacity or another, and have overheard some interesting snippets of conversation. Obviously I could have completely got the wrong end of the stick, but a discreet enquiry or two would suggest otherwise....

Apparently BE currently have 1.5M (yes, million!) in reserves in the bank account - essentially members monies. BE also requested that organisers accept a 'freeze' in revenue from entries (and to reduce prize money if they were faced with the prospect of making a loss from this freeze) - which organisers agreed to. This was 3 years ago, and apparently has resulted in a loss of 3% per year, which is 9% (give or take the slightly complex maths that happens when you reduce a number by a % each year!!). So organisers have now asked for a rise in their share to get their income back in line with costs - which have increased due to inflation, rising fuel etc - which is apparently where this rumour of an increase in entry fees next season has come from.

So my question is, should BE be holding that kind of money as 'reserves' in the account, and increasing entry fees/start fees; or, in these times when we are all feeling the pinch of the cost of eventing, should BE be thinking about taking a smaller share of the entries - because clearly they have the required reserves for times of strife - and keeping entry fees static, thus allowing organisers to make up the difference through the reduced amount they pay to BE? It'd be nice to think that if the reserves exceeded the projection for a worst case scenario year, BE would also be thinking about using reserves to increase prize money too (I guess foot and mouth/the really wet years we've had recently would make those projections pretty accurate?) - but I suspect that's wishful thinking on my part....

I'd love to hear what other people think about this?
 

LEC

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What were the losses from the year of doom in 2008? where it just kept raining?

Now entries are insured does BE have any huge liabilities for cancellations?
 

SpottedCat

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The 2008 accounts are still online. Looks like they did make a profit, though they paid out a lot too.

picture.php
 

diggerbez

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i just don't see how BE can possibly justify a further increase in entry fees next year (as per the rumours)- not if they have that much money saved up! surely all this abandonment insurance we've been paying has to have had an impact??
 

meardsall_millie

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I am by no means a financial expert (far from it :eek:) but just a couple of points;

The level of reserves should be appropriate to the level of risk (internal and external) to which the company is exposed. Considering my own organisation (which I won't mention in detail but suffice to say it has considerable responsibility towards the public ;)) has an annual spend of around £16m and reserves of around £1.5m. I'm not sure of the risks to which BE is exposed but £1.5m reserves against an annual spend of £6.5m does seem excessive on the face of it. Happy for an accounting geek to tell me I'm wrong though!

I suppose we do need to remember that BE no longer gets a wad of cash from Burghley since they had their little disagreement :p - that has got to have significant implications for income surely?
 

MistletoeMegan

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The 2010 accounts are up too. The Abandonment Fund which covers cancellations was £69k as at 31.12.2010, which is a tiny liability compared to their cash balances.

On the face of it they seem to have substantial cash balances given their level of spending and commitments, and the income they earn on the cash is tiny - £6.5k on £2m+?! Even in a risk-adverse entity that's poor :eek:

http://www.britisheventing.com/page.asp?section=408&search=2010+accounts
 

kerilli

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I am by no means a financial expert (far from it :eek:) but just a couple of points;

The level of reserves should be appropriate to the level of risk (internal and external) to which the company is exposed. Considering my own organisation (which I won't mention in detail but suffice to say it has considerable responsibility towards the public ;)) has an annual spend of around £16m and reserves of around £1.5m. I'm not sure of the risks to which BE is exposed but £1.5m reserves against an annual spend of £6.5m does seem excessive on the face of it. Happy for an accounting geek to tell me I'm wrong though!

I suppose we do need to remember that BE no longer gets a wad of cash from Burghley since they had their little disagreement :p - that has got to have significant implications for income surely?

that is a LOT of members' money to have stashed away!
BE has insurance against abandonment etc now though, i've been told that the Windsor debacle couldn't happen now.
the Burghley picture is a lot more complicated than that. i've been led to believe that BE will still get a payment (along the lines of the one they receive from Badminton), and will have far fewer overheads (e.g. BE used to pay for all officials etc there, Burghley will now pay for those) I'm ready to be corrected though, this is all hearsay (but from a pretty reliable source i believe.)
 

Rambo

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I don't know how many members BE has but i don't think £1.5m sounds excessive tbh. I'd rather be associated with an organisation that is prepared financially for the worst. I'd be more concerned at their instructions to organisers to reduce prizemoney which is already p155 poor.
 

millitiger

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I don't understand any of the breakdown from a BE entry fee and I think it is something that should be much more transparent.

My gut feeling is that I thought BE was a 'not for profit' organisation so I am unsure how they can have such a large reserve of cash instead of any profit being ploughed back into the organisation for the benefit of the members.
 

Flashpaddler

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Businesses that intend to survive into the future have to have a capital reserve. I'd imagine BE's capital assets are small in terms of what it owns that can be sold (buildings, intellectual property etc). Therefore, it's normal for businesses in this position to hold a reasonable cash reserve, normally via a holding company. £1.5M sounds spot on to me given the number of employees etc.

To me, this shows BE is a responsible and serious business, delivering on a long-term plan.
 

SpottedCat

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I guess therein lies the rub - is BE a governing body which needs a sensible (but not excessive) amount of reserve funds to guard against awful years like those which were very wet (although as I understood it that is what the abandonment insurance now covers so shouldn't be a problem again); or is it a business dedicated to making as much profit as possible....and what is the long term plan for those profits?

I am sure all this is being read by BE, and whilst I am also sure that they will say the question should have been asked to them directly, I'm afraid that after watching MES at an AGM stand up and say that 'BE does not fund R&D into safety equipment which will be sold' (or words to that effect), I wanted to ask it in the public domain so they are less likely to fudge the answer. Because what is a frangible pin if it is not safety equipment which BE have funded R&D in and now sells to course-builders?!

And I'm completely put off using their own forum due to the little message at the top which riles me every time I read it, as it basically asks for all discussion to happen behind closed doors, which surely isn't good for the sport, because if one person has the wrong end of the stick (which is quite probably me in this case!), then other people probably do as well, and isn't it better to discuss and correct it publicly?
 

keysoe

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BE take at least £6 per entry, and the Insurance fee also takes it's own route away from organiser.

Personally I think you should increase entry fees year on year by 3-5% to keep it in line with inflation. Supplier costs have gone up by much more.

Should BE be leaner / more efficient? that is really down to member demands, do you want a quick response to contact with the office? staff is a big overhead for all the disciplines - less people will get through a smaller workload. That is really the only way you reduce BE's share of the pot.

There seems to be demand for better & better going at events, so organisers need to be able to pay for more labour & diesel, maybe the start fee is the right place for this.

Had BE not been spooked by two consecutive bad years, the abandonment fund would be quite healthy by now.................
 

VRIN

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I am sure all this is being read by BE, and whilst I am also sure that they will say the question should have been asked to them directly.....

And I'm completely put off using their own forum due to the little message at the top which riles me every time I read it, as it basically asks for all discussion to happen behind closed doors, which surely isn't good for the sport, because if one person has the wrong end of the stick (which is quite probably me in this case!), then other people probably do as well, and isn't it better to discuss and correct it publicly?

I agree using this forum is a good way of raising discussion and bringing it to the attention of BE.. It is clear that they do read this forum as, at times, they do appear to respond to threads. An added advantage with this forum is that it is also read by H&H who can bring matters to the attention of a wider public through their magazine should they so wish- which I suspect is the most effective way of grabbing BEs attention!
 

millitiger

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BE take at least £6 per entry, and the Insurance fee also takes it's own route away from organiser.

Personally I think you should increase entry fees year on year by 3-5% to keep it in line with inflation. Supplier costs have gone up by much more.

Should BE be leaner / more efficient? that is really down to member demands, do you want a quick response to contact with the office? staff is a big overhead for all the disciplines - less people will get through a smaller workload. That is really the only way you reduce BE's share of the pot.

There seems to be demand for better & better going at events, so organisers need to be able to pay for more labour & diesel, maybe the start fee is the right place for this.

Had BE not been spooked by two consecutive bad years, the abandonment fund would be quite healthy by now.................

I think that if BE put entry fees up by 5% every year, in a few years you would be seeing a lot less entries and the income would actually drop.

And the start fee has already gone up significantly in the last year or so- in 2009/10 most start fees were £10 for Intro/PN; now a lot of the start fees are £15.

Most people's income has not gone up in line with inflation so people's spare cash for luxuries like eventing is getting smaller and smaller.

BE needs to look much more closely at the organisation and cost saving rather than putting prices up and up as the membership will decrease and there will be even less revenue than they have now.
 

meardsall_millie

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I think that if BE put entry fees up by 5% every year, in a few years you would be seeing a lot less entries and the income would actually drop.

And the start fee has already gone up significantly in the last year or so- in 2009/10 most start fees were £10 for Intro/PN; now a lot of the start fees are £15.

Most people's income has not gone up in line with inflation so people's spare cash for luxuries like eventing is getting smaller and smaller.

BE needs to look much more closely at the organisation and cost saving rather than putting prices up and up as the membership will decrease and there will be even less revenue than they have now.

Exactly this. You only need to look how slowly events have filled this year to get an idea of just how much the increased costs of eventing are biting (yes, I know the hard ground won't have helped but there's much more to it than that).

Also - am I the only one that's a bit surprised that BE 'only' takes around £6 from each entry - I'd got it into my head that they took much more from the comments made by organisers? :confused: I'm sure the organisers will throw their hands up in horror at my comment - but there we are :eek:
 

SW3

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Personally I think you should increase entry fees year on year by 3-5% to keep it in line with inflation. Supplier costs have gone up by much more.


If that were to happen you would DEFINITELY be pricing a significant number of people out of the market. Very few people are in the fortunate position of having seen their salaries rise in line with inflation during this recession. I sympathise with the issue vis increases in supplier costs, but my strong feeling is that if entry fees were to be inflated by 3-5% per year, *ouch* that would lead to consumer / competitor alienation and a rapid emptying of the lorry park at many grassroots venues.
 

Rambo

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If you want to play the inflationary game then surely prizemoney should go up every year too ? It'd only a part of the overall cost after all.

I'm not a member of BE, but i do know fom my dealings with BS that my and my horses registration fees go up a couple of pounds every year...which works out to roughly 2-3% each year. Entry fees go up too...but due to their smaller size the percentages are much greater...an extra pound on a £12 entry fee is more like 8%. That said, i don't think prizemoney goes up proportionately ?
 
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It is clear there are many areas of our sport where we all guess at the answers, depend on someone else to inform.
Quite often we only get a version of what is actually happening and this version is not always 100% correct. It is important that BE has funds to support the sport in times of great need.

BE will always work hard to ensure the best result for the whole sport and they do try their best to look after the riders and members. At the same time the Organisers need the funds to develop their events to ensure they are to the high standard we expect and many demand! having been involved for a couple of years with the sport through ERA it has surprised me how hard organisers work to balance their books.It must be quite a stress!
I have also seen how hard everyone works in the office to keep our sport running.
Rest assured the decision they take regarding any future changes will be well thought out and costs considered for all.
It is clear BE need to address a number of these concerns publicly to squash the rumours that aren't correct.
 

millitiger

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I don't think anyone is denying that BE and their staff and organisers work very hard- but there do 'seem' to be an awful lot of holes that money disappears down.

As I said above, perhaps BE need to be more transparent about where every £1 of membership money and every £1 of entry fees are spent?
 

tigers_eye

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I must admit I don't scrutinise the accounts, and I don't compete in ODEs anymore. However I was amazed that all the Autumn FEI events in the UK have had such huge entries, clearly people do still have the money to event at the highest level. Until there is a tail-off of course the temptation will be there to raise entry fees.

Out of interest are the increasing number of coaches and all the training available to BE members at various levels funded directly by BE or by UK Sport?
 

millitiger

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I must admit I don't scrutinise the accounts, and I don't compete in ODEs anymore. However I was amazed that all the Autumn FEI events in the UK have had such huge entries, clearly people do still have the money to event at the highest level. Until there is a tail-off of course the temptation will be there to raise entry fees.

IMO, it is not the top level feeling the squeeze as much as the amateur/grassroots levels as most upper level horses are funded by owners, not owner/riders who tend to have to watch the pennies much more.

I really think BE are soon going to price themselves out of the market at the lower levels as the majority of competitors simply cannot keep paying rising costs and getting very little in return- and clearly organisers can see this trend as well as so many of them are now holding unaffiliated competitions up to PN/Novice level (with cheaper entry fees and better prizes in most cases).
 

SpottedCat

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Exactly this. You only need to look how slowly events have filled this year to get an idea of just how much the increased costs of eventing are biting (yes, I know the hard ground won't have helped but there's much more to it than that).

Also - am I the only one that's a bit surprised that BE 'only' takes around £6 from each entry - I'd got it into my head that they took much more from the comments made by organisers? :confused: I'm sure the organisers will throw their hands up in horror at my comment - but there we are :eek:

I agree - I thought BE took much more than £6/entry from comments I've heard from organisers too :confused:

It is clear there are many areas of our sport where we all guess at the answers, depend on someone else to inform.
Quite often we only get a version of what is actually happening and this version is not always 100% correct. It is important that BE has funds to support the sport in times of great need.

BE will always work hard to ensure the best result for the whole sport and they do try their best to look after the riders and members. At the same time the Organisers need the funds to develop their events to ensure they are to the high standard we expect and many demand! having been involved for a couple of years with the sport through ERA it has surprised me how hard organisers work to balance their books.It must be quite a stress!
I have also seen how hard everyone works in the office to keep our sport running.
Rest assured the decision they take regarding any future changes will be well thought out and costs considered for all.
It is clear BE need to address a number of these concerns publicly to squash the rumours that aren't correct.

I don't doubt you are right Francis - the trouble is BE doesn't communicate things well or transparently - if they did, and if they perhaps made it clearer to all (annual accounts not being the easiest things to decipher), then these rumours wouldn't start!

They do have dedicated marketing people these days after all - maybe one of their roles should be communication with the members about this kind of thing.

Personally I think you should increase entry fees year on year by 3-5% to keep it in line with inflation. Supplier costs have gone up by much more.

Ok, so 5% on a £50.30 BE100 entry fee increases it by £2.82 this year, plus abandonment insurance of £4.78, plus start fee of £10. That will start to look like this over the course of 10 years:

Y0 = £50.30 + £4.78 + £10 = £65.08
Y1 = £52.82 + £4.78 + £10 = £67.60
Y2 = £55.46 + £4.78 + £10 = £70.24
Y3 = £58.23 + £4.78 + £10 = £73.01
Y4 = £61.14 + £4.78 + £10 = £75.92
Y5 = £64.20 + £4.78 + £10 = £78.98
Y6 = £67.41 + £4.78 + £10 = £82.19
Y7 = £70.78 + £4.78 + £10 = £85.56
Y8 = £74.32 + £4.78 + £10 = £89.10
Y9 = £78.04 + £4.78 + £10 = £92.82
Y10 = £81.94 + £4.78 + £10 = £96.72

And that is assuming that the start fee and abandonment insurance remain static, which I think is unlikely. If people's disposable income isn't rising by 5% per year, then this is going to quickly price people out of the market. I know I would just find something else to do, as unless I can run at least once a month I don't see the point in affiliating because of the costs involved with just registering.

An intermediate is already £78.90 - with a 5% increase in 5 years it would cost over £100 to do an intermediate without factoring in start fee or abandonment insurance. Perhaps that is more sustainable because horses at that level run less often?

ETA: In my industry, across the board people were expected to take a 10% pay CUT in winter 2008/9. Salaries have not risen since, and this summer has not been great again. This is in a proper professional industry, but one closely connected with the construction industry. I guess it's that old conundrum of when do you decide it is unaffordable...which for some people it is and that's just the way of the world, I can't afford lots of things and it doesn't follow that they should be cheaper......and when do the powers that be need to keep it affordable because otherwise they don't have the numbers doing it to make it viable. It's not an easy answer I don't think.

Something which has struck me this year is that every BE event I have done I have been able to enter late, and not had a waitlist until maybe a couple of weeks before the event. Every unaff I've done has closed entries well before the event. So people who previously could afford to event must be shifting their allegiance at the lower levels I think?
 
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LEC

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Ok I have just worked out the difference between unaff and aff eventing.

This year I have evented 8 times all at BE event sites. I paid on average £40 per entry so total for the year £280

If I was doing the equivelent at BE it would have cost me £455.46 just for entries not including membership costs.

Frankly I saw no difference at all in organisation, the courses were all very much of a standard, ground was all good and I agreed with all the dressage judging.
 

diggerbez

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i have definitely noticed a tail off in BE this year compared to previous years- every event i have entered i have entered in the last couple of weeks and i haven't been balloted despite mostly not bothering with my ballot stickers. and this is the experience of a 1 horse amateur at 90/100 level.
most people haven't seen pay rises in line with rates of inflation- i work in the public sector so i definitely haven't! i will also probably have the joy of industrial action to deal with in the coming months and the docked pay associated with this.... all of it adding together to make me think (seriously) about not joining next year- and i'm the exact grassroots rider that i'm sure BE relies upon to form the bottom of the pyramid?? i know i'm not the only person who feels like this from reading posts on H&H and talking to other eventing friends.
it would be different if i really felt that i was getting that extra value for money that BE provides- but a lot of the time i feel that i'm not.
for example:last year i ran at a RC organised event at Eland Lodge around the BE course. it was (iirc) £40 to enter with no start fee. to run at their BE event its £62.28 plus £12 start fee..... now the day i had at the unaffil day was just as enjoyable as any BE events that i've done. the course was prepared as i would expect for BE and the organisation was smooth and fluid....so where is the point in me joining BE and paying more- what i am i getting for all that extra money? the chance to qualify for grassroots- in reality this is unlikely for me- so what do i pay the money for?? i know there are some unafils that are NOT up to scratch but genuinely i think most organisers care as much about their unafill competitors just as much as their BE ones- and after all the unaffiliated ones are more likley to support the venue for other events they are running..... i am sure that BE do work extremely hard but its disconcerting not really knowing where all of this money is going!
 

Flashpaddler

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All the BE events we've attended seem pretty full and I understand membership has increased. Given the high cost of membership, we aim to do around 10 events per year, roughly one per month with an extra one in the school summer holidays. We rarely compete outside of BE given that 10 events + membership + start fees = ~£1100 pa (+ about another £500 in fuel!). If fees increase, and we couldn't do this many events, the whole value for money equation for holding membership starts to fall apart.

One advantage of BE holding £1.5m reserves is the guaranteed income from investing this. If they have good advisors, this should bring in at least £75K per year. When financially planning, this guaranteed amount permits more risk to be taken in other areas and must, therefore, help keep price increases under control.
 

TheoryX1

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Dont really want to get involved with all the political ifs, buts and maybes, as have more than enough on my plate in my working life with my own company, but I was under the impression that they were a not for profit organisation. As a commercial organisation I do agree they should have reserves to protect them from the bad times - my own company does the same and that is why were are still in business when others in my profession (estate agency) have gone down the drain. However, I do think that if they put up prices and membership it will have an adverse effect on things. A of people I know who event have grumbled this year about the costs of eventing. I am fortunate, I have sponsorship, but that sponsorship is funded by my own company and we need to make a profit to pay for it. so catch 22 really.

In my own profession we are being nailed down left right and centre by clients. I tried to put our lettings departments property management fees up to a lot of our clients recently to wails of derision by the clients in question. Some of them hadnt had a fee increase for 10 years - during that time our costs have increased considerably, as had that landlords rent payment, so far exchange in my book. Whilst I appreciate some form of increases may be necessary, can BE please keep it to an absolute bare minimum. Its hard out there!

Also, why does it cost more to register a grade 3 horse, than a grade 4 horse?
 

kerilli

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TheoryX, the registration thing has always driven me crazy. e.g. for my Horse Reg in the U.S.A. i paid a one-off fee for registration which would last for the life of the horse. it was $100 dollars, then went up to $200 iirc... okay, a big hike but still as cheap as chips for LIFE registration of that horse ACROSS ALL DISCIPLINES! I spent more than that in a single year to register 1 horse for BD, BE and BSJA (as they were back then).
The U.S. has every discipline under 1 umbrella, which is why they can afford to do that, I guess.
The current cost for U.S.E.F. 3-year senior membership (to ride in any & all disciplines) is $150 = £96... :O :O :O

re: the "BE takes £6 per entry" thing...
these are the figures I was given:

from a £100 entry fee after deductions for BE fees, VAT, abandonment premium etc the organiser keeps around £41 per entry, plus the start fee.
So, over half goes elsewhere.
Don't forget that BE only gets a cut of those who actually go up the centre line - if a rider withdraws after ballot date then BE gets nothing. SOME Organisers are very ethical and do refunds if they fill that place from the Waitlist (and funny how we never hear about the ones who do, only the ones who don't... but some really are the good guys) but there are literally thousands and thousands of pounds to be made by keeping things hidden and refusing to do refunds (or keep public waitlists). Certain organisers will not do refunds no matter what, and refuse to hold waitlists.
I can see why the BE venues that run unaffiliated events with a £55 - £65 entry fee(inc of VAT) plus a start fee are becoming increasingly popular with organisers as well as competitors!!

I see Keysoe's point about ground preparation, and laud him/them in particular for doing, I was told, an amazing job (all-weather xc tracks with woodchip on the grass, i believe.)
However, what about the events who take the maximum 'start fee' and have done NOTHING to the ground? I remember when 'start fees' were introduced, and that was exactly the thinking behind them - they were to reimburse the Organiser for extraordinary efforts made on the ground (or the course - e.g. a new water jump)... fair enough.
it's very complicated, and i just wish it could be more transparent so we could all see who the good guys and the less-good guys are... ;) ;) ;)
 

meardsall_millie

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No disrespect to Francis but it's the professional riders that really need BE - not the Grassrooters, so arguably he would defend it wouldn't he?! :p

If you want to run at 80cm, 90cm or 1m, there are generally plenty of unaffiliated events to choose from, often over BE tracks as others have mentioned. It gets a little harder to find unaffiliated stuff at 1.10m (BE Novice equivalent) and then there's nothing (that I'm aware of) at 1.20m (BE Intermediate equivalent) or above. I take on board all the usual comments about varying quality, organisation, ground conditions, etc.

I know BE does much more than running the event schedule - there is of course the work in R&D, safety, training, etc - but with regard to training who gets the most benefit? Certainly not the general adult Grassroots rider (without paying an arm & a leg to go to CDT, etc) as it's more often than not aimed at U18's, squad members, etc, etc.

Eventing is a co-existence between the competitors (including owners), the organisers and BE. In my opinion BE could be on a sticky wicket - at Grassroots level the riders and organisers cannot survive without each other - but can happily survive without BE. And who are the biggest contributors into the BE coffers - yep - the Grassrooters.

Why should the lower levels continue to support the organisation when there are a considerable number of gripes (only a few of which I believe have been expressed on this thread so far) which are simply not being satisfactorily addressed?

Although I enjoy my eventing, I'm certainly not going to sell my soul to carry on doing it. It's getting to the stage where it's financially only just viable for me (and both myself and my OH are in well paid jobs). If costs rise much more I will be taking my business to unaffilliated events and BS - where I at least have the opportunity to win my entry fee back!

I'll get off my soapbox now - it's been a long morning with a lot of thinking time through dull meetings! :rolleyes:
 
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