Wednesday, July 10, 2013

Incentives Aren't There To Grow the Sport

Bill Finley wrote a piece at about a mini-championship set of races each month, at various racetracks. These sets of races would not be competing with others, as we see so often now, and Bill thinks they would help to drive eyeballs. In addition, it would help the sport because, "You cannot, week after week, put out a product that your customers keep telling you they despise, and expect to do anything but fail."

I agree, and you agree.

Leaving aside for a moment the dearth of leadership to get something (that's seemingly makes sense and is so simple) done, I think it won't get done because the incentive to get it done is not there. It's pure capitalism, really, in a sport that sometimes we think works in pre-1950 Albania.

A pro sports team wants to make the playoffs and there is a strong incentive to do so.  The players make more money yes, but so does the team. Two home games in the least adds 40,000 fans at $80 or $100 a pop. Making the playoffs also helps the team sell advertising and sponsorships, drives corporate box sales and helps sell season tickets for next year. It can also, if they so choose, help them in getting a ticket increase done. Ensuring they are putting on a good playoff series can yield millions upon millions in revenue.

In horse racing, what increase in revenues can be realized by having a bigger day at your track?

Sponsorship money is not there for the most part, some tracks don't even charge admission, there are no or few box seats or other items that drive massive revenue. Generally it's just the bet. Your "day" at Thisteldown, or Mountaineer might hope for a handle bump. Instead of running ten races of contentious claiming events for $180,000 in purses, you race ten events with $1.5 million in purses. Doing so, your regular handle goes from $4 million to $7 million. The increase in handle of $3 million comes mostly off-track, where your small track gets 3%.

By spending tons on marketing. By creating this massive day. By hiring more folks for the day and spending $1.3 million or so more out of the purse pool, your track might've increased your revenues by $100,000 or so. Oh boy.

Is it any wonder these ideas never get off the ground?

The problem is that by not getting them off the ground, it hurts the sport.  'Not hurting the sport' is not enough of an incentive, however. We can't seem to see that having these big days can put out a better product, build a new brand, and increase handle and revenues over time. Hosting a day today, can pay off tomorrow.

I think there is a path forward, and it is the same old same old - a national office with an industry behind it. Having a national office can add incentives to create these days. A national office can offer the racetrack national industry and event marketing in a box. The marketing would be branded, at little or no cost to the host track. A national office, over time, can sell branding to each event, so sponsorship money can flow. A national office can ensure the events are running at a proper time to increase viewership and handle. A national office can, in time, possibly ensure the events are televised. A national office can help ensure a massive pick 4 or pick 6 pool is promoted on these days.

If all those things occur and are given a decade to take hold, racetracks might be dieing to host an event like Bill talks about.

Yes, some of this has been tried with the NTRA. But because it's been explored does not mean it cannot be explored again. America's Best Racing is proving its worth so far. It's worked better than the old NTRA and Go Baby Go campaigns.

 Horse racing will never grow by asking horsemen and racetracks to be altruistic. Charities grow like that, not businesses. Business needs incentives - money - and until racing finds a way to make putting on an exciting raceday, with deep fields and big crowds, worth it, we'll be stuck in mediocrity and stagnation.


ron said...

I love reading your blogs and your enthusiasm for the game, but deep down most of us really I think it's over long term. its been a slowly sinking ship since the 80's, although innovations such as simulcasting,adw,exotic wagering has helped over the last 20 or 30 years, and rebates have helped over the last 10. I think we've lost too many people and game so few young people for long-term sustainability. we need more people like you to drum the cause, but I really think it's probably just to delay the inevitable. it pains me to say that since I've been a fan since I was 5 years old, watching Secretariat win the Triple Crown. keep fighting the fight and the good work thanks PTP

Anonymous said...

Hate to sound downbeat, but anyone who touts a racing series has never been around horses. They aren't race cars or teams with deep rosters, and never will be although folks would like to dream otherwise.

Anonymous said...

Also, interestingly, is the recent episode where a horse trainer who was really adept at getting a horse right and sound to run repeatedly and safely, at the highest levels of the sport, was summarily drummed right out of it.
With the pushing hand of a "journalist" named Bill Finley.

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