Simon Bazalgette: The man riding the Jockey Club into the 21st century

The Business Interview: Two days before the Grand National, he tells James Moore why the racing industry needs change

Just three weeks after an epic Cheltenham Gold Cup the Grand National will again put horseracing at the centre of the nation's sporting consciousness. With 10 million people set to watch the race on the BBC and sell-out crowds squeezing into Aintree this Saturday, everything seems to be rosy in racing's garden with cash flowing into its coffers.

Simon Bazalgette, the chief executive of the Jockey Club, which owns both big jumps tracks, begs to differ. He says radical change is needed. "The fundamental question is what is it that really drives the economics of the sport over the long term? Clearly admission is important, and the Jockey Club is very good at getting people through the gate. The trouble is that more and more people are coming because racing's a good day out, a leisure experience of which racing and betting is just a part of.

"They would never think of looking at the racing pages or watching it on TV. The trouble with that is that the sport of racing within that day out becomes less and less important, or at least the quality of it does. A lot of people don't understand the difference between a good race and a bad race." And that's not good for other sources of income. "Commercial partners, sponsors, media values, they are in decline because we are not really competing with the other sports for the big bucks. We are a day out," says Mr Bazalgette.

"We've got some serious work to do. If we don't do it we can't even rely on our position in the betting market, which is where we have a lot of historic strength. Racing used to be about the only thing you could bet on, even as recently as five or 10 years ago, so people therefore would make the investment in understanding it. These days you can bet on almost any sport. People go to what they are interested in, that they think they understand and think they have a chance of winning something.

"We are not trying to do this at a time when we are just about to fall off a cliff. In one way that's good, it means we've got some time. The difficulty is if you look at other sports, or businesses, who've made the changes they've absolutely had to, they tend to make them out of a crisis. We act now from a position of some strength but we do have to keep the pressure on and get it done. If not, we will gradually have to accept we are not a sport. We will gradually, and catastrophically, lose our position in the betting market."

Blunt stuff from a man who heads an organisation that is seen by many as rather hidebound and dominated by the landed gentry. Non-executive directors are still called stewards, even though the Jockey Club abandoned its governance role to the British Horseracing Authority in 2007. The "shareholders" are 130 or so blue bloods. And yet it turns over more than £100m with a hugely diverse array of businesses. In addition to 14 racecourses, there is a substantial media rights operation, including shares in two TV channels (Racing UK for consumers, Turf TV that supplies pictures to betting shops), a huge property portfolio and the National Stud. "People have a certain view of the Jockey Club but it has changed out of all recognition over the last three years," says Mr Bazalgette. "To get someone like me to run it as a group – because it never had been run as a group before – involved some serious corporate governance changes. Really, the stewards operate as a plc board. They are serious corporate players who know how a company should be run. I report to the members quarterly and they've been incredibly supportive – more radical than the industry has on some issues."

Mr Bazalgette argues that far from being a stuffy organisation, the Jockey Club has become a serious turnaround specialist taking failing tracks – including Aintree and, yes, even Cheltenham, and making a success of them. Its latest projects are Exeter and the Stud. Mr Bazalgette now wants to modernise the club's brand so it gets the recognition he thinks it deserves. "You can do this. You just have to look at Dr Who or the Mini or British cooking."

In hiring Mr Bazalgette, the club has made a statement of intent. A scion of the talented Bazalgette family (great, great grandfather Sir Joseph designed London's sewers, cousin Peter designed Big Brother), he started his business career at KPMG and also had a stint as chief executive of Music Choice Europe, a joint venture between Sky and Sony.

In founding Turf TV he took on the might of the bookmaking industry and won. Relations have since improved but while he says he doesn't seek battles for the sake of it, he's certainly not afraid of a fight. He describes the relationship with bookmakers as "more honest now".

"It's partly the recession: they've had to retrench and focus on their core offering – racing. The last couple of years the bookmakers have been quite open with me: horseracing is the biggest part of their portfolio and it's not performing like it should do. They can't afford to have it underperforming through bad times. We know that too. With Turf TV we had to be combative, there were outrageous attempts to keep TTV out of the market, including fighting the most ridiculous court case."

He's a keen proponent of reforming the 10 per cent levy on bookies' racing profits that does much to fund the sport, although he isn't so sure the bookies really want to scrap it given that it gives them the whip hand. That levy is, anyway, falling and Mr Bazalgette fully expects it to yield 20 to 30 per cent less next year as bookies migrate offshore.

But he adds: "We're still the only betting product that is there every day of the week, all week round. But we mustn't see ourselves as the wallpaper all the time. That's why we've got to get the story about the top end of racing right, get the story, get the narrative." This would include the Cheltenham Festival, running through to a Saturday featuring the blue riband Gold Cup.

He also foresees a series of qualifying races which horses would have to run in to get into the main event. The shake-up of the flat could be even more sweeping ("the main problem is the flat"). The first step – an end of season finale at Ascot to give Britain an event comparable to Arc day in France – he would like to see happening as soon as next year.

In the meantime, he's trying to add the banjo to the vast array of instrument he plays, and hoping Mon Mome, last year's 100-1 Grand National winner who is currently 10-1, can repeat the trick and provide a huge marketing boost for the sport. But is that where his money is going? "Well, I usually bet with the heart rather than the head. So I'll probably back whatever Tony McCoy is riding..."

Simon Bazalgette: CV

* Bazalgette, 48, is married with four sons. He studied maths at Warwick University before starting his business career at KPMG in 1984 where he qualified as a chartered accountant.

* Left KPMG in 1993, where he had been manager of its media consulting department, to join Music Choice, a joint venture between BSkyB, Time Warner and Sony, as strategy and business affairs director.

* Appointed as chief executive in 1999. He worked at Music Choice until 2003 and led its 2000 flotation. He is a past president of the European Digital Media Association.

* He became executive chairman of the Racecourse Media Group (RMG) in 2004. RMG manages the media and data rights on behalf of its owners, 30 leading UK racecourses, and set up Racing UK, the racetrack-owned satellite channel, and Turf TV, which supplies pictures to bookmakers.

* He was appointed group chief executive of The Jockey Club in September 2008. In that capacity he is chairman of Jockey Club Racecourses, the largest British racecourse group, which owns 14 courses, including Aintree, Cheltenham, Newmarket.