Wednesday, October 7, 2009

The New Versus the Old

The Paulick Report has been getting good press since its inception. Ray trumpets a recent Racing Post article highlighting some good promo for his site here (pdf alert). Ray has original content and is not afraid to take on some issues, whether the majority agrees with him or not. He was of course the editor at Bloodhorse for many years.

Coincidentally, we see a new article from the current Bloodhorse head this morning. Where Ray's site deals with new issues and tries its best to think outside the mainstream, the culture of the Bloodhorse seems to keep speaking of issues that have long failed us.

What can be done? Simple. Make racing fashionable once again, rebuild the fan base, and return racehorse ownership to a proud and profitable venture.

Sounds good, but for the latter I have no idea when horse racing ownership was ever a "profitable venture". It was not 100 years ago, and it is not today. Read "The Story of Dan Patch" and owners spoke of how the game of racing was not, and probably never will be profitable. And this was in a time when racing was North America's number one sport, and race horses were on cereal boxes. It was a proud game yes, but not a money making game.

Since about 1995 (the year slots were introduced and starting to proliferate) suddenly we heard more and more about owning racehorses as a business. I don't know why that started - I guess it was all that free cash that you and I enjoy as owners - but it permeates this business at almost every turn, and it hurts us from moving forward. I am a horse owner that has lost money every year since I have owned horses. I don't see that changing soon, because it is what it is, and I sure as hell do not want our customers to pay for my hobby.

Mr. Bearse wants to double the popularity of the sport. That's cool.

Can we set a goal of doubling the popularity of the sport? Why not? Alex Waldrop, president and CEO of the National Thoroughbred Racing Association, recently told me there are some 7.4-million core racing fans in the United States. Doubling this number is within the realm of reason and would lead to a surge in handle and a much-needed bump in purses.

And here is one way how....

And speaking of handle and purses, it’s time for owners to stand up and demand their fair share of the take-out.


Yes, if we squeeze money from customers, take the game off of the web, control signals and hike prices, just to raise purses a couple percent all will be well. We'll really be able to increase the fan base.

Increasing the popularity of the sport and improving financial opportunity would help lure new owners to the game.

The capital provided by Thoroughbred owners is a crucial factor in the survival and growth of our sport.

I find such logic frightening, simply because the empirical evidence does not support it.

As posted here and elsewhere before (and we all know this by now in places like Ontario, which has seen well over $2B of slot money thrown into the supply side of the equation, with a resulting 40% drop in handles and tracks that are ghost towns) - an increase in purses does very little to grow the sport.

Don't take my word for it, take the University of Louisville's. "Wagering would increase by only 6% if purse were doubled. This is a surprising finding considering the importance that is attached to the purse variable in all major policy decisions to increase the wagering in this industry."

In Canada, there were 30,000 racehorses registered in 1975. In 2008, there were close to 200,000 - a 587% increase. How did that 5-fold increase in horse ownership do for our handles and popularity since 1975?

It was estimated in the early 1910's that one out of 500 racehorse owners would make money in a year. From 1930 to 2009, takeout increased over 130%. The thinking being that if we take money from the customer and sink it into purses, all will be well. It is 2009, and that thinking is alive and well, despite the fact our sport has been relegated to a minor sports and gambling entity. Money going from takeout to purses is 600% higher in North America than the UK, yet handle is tanking and purses are tanking. We are not taking too little money from our customers for purses, we are taking too much. And guess what? Horse owners don't make money in the UK either, but at least they have 700% higher per capita handles, and a shot at some growth.

We seem to have as much foresight in our business as the Digital head whom in 1977 said "There is no reason for an individual to have a computer in his home." Taking money from the have-nots, and passing it over to the other have-nots is not a policy.

I don't know if new thinking will fix things, but I don't think many people are giving the old too many gold stars.

In the end we have the old versus new. I can get my information from a place like Paulick's, with thought-provoking articles not married to a long-ago dogma, or I can get the above. I choose Ray.

Note:

The newest edition of the Harness Edge is up for downloaders. You can click here and get it (it opens directly into the magazine). They have improved it quite a bit and if you are a harness fan it is a must read. The pages turn beautifully. A big thumbs up.

5 comments:

Anonymous said...

Thanks for the link to the harness edge download. The story on the Purple Haze Stable was outstanding. Cheers!!! Roy

Anonymous said...

"Mr. Bearse wants to double the popularity of the sport"


To begin with the Past Performances have to be free and they need to be put in every Poker room in the country.

Anonymous said...

The Blood-Horse

"For nearly a century, professionals and racing enthusiasts have relied on The Blood-Horse for accurate and timely racing and breeding news"

Really - from what I can see they leave it up the the NYT to report on the I Want Revenge lawsuit.
Why are they ignoring the elephant in the room? Answers please.

>>> NY Times: Lawsuit sheds light on use of legal medications in horse-racing

Anonymous said...

yah! the blood horse continues to ignore the biggest stories in the game, starting when Paulick was there.

why no internet marketing of gambling
why are tracks unable to control ADWs and revenue.

how can owner costs come down--economies of scale possibly.

why do we license numbers trainers for our tracks that injure everything they touch and drive every owner out of the game eventually.

are injuries and tragedies such as 8Belles really "just racing" or are they preventable with appropriate care.

and so on. Glad Bearse wrote his post. I'd have preferred the tone more similar to this one.

Pacingguy said...

I saw that article about capturing more of the takeout and my eyes rolled.....