A Quagmire in An Industry that Can't Pivot

Other than the obvious, from a cold-hard business, corporate, political and PR perspective, this past couple of days has been interesting. We have a video showing what happens, at times, on a backstretch. That video has hit the mainstream, where people do not know what goes on in backstretches (at times), and you have a reaction.

It's anyone's guess as to what happens next.

Some businesses that work with animals get assailed like this, and pivot. For the last thirty years, the circus business has taken a ginormous hit. Me, like a lot of you, don't know what goes on behind the scenes with circus animals, but when that was exposed, changes were made. They went in two main directions: Standards were set, which caused a pivot, and a real business pivot happened.

The pivot to me is really interesting. In 1984, Cirque du Soliel was created, and in fewer than two decades it achieved revenues that Barnum and Bailey took a century to attain. One of the reasons its growth exploded was that it created a new market for itself. From adults, primarily.

According to the bestseller "Blue Ocean Strategy":

"There was increasing sentiment against the use of animals by animal rights groups. From a competition perspective, circuses remained unattractive. One of the first Cirque productions was "We Reinvent the Circus"

They foresaw what was happening in the circus business, so they created and marketed a circus without animals. As cities were banning circuses with animals, this filled a huge void. 

According to IBIS World research (2012) "Trends toward contemporary, animal-free circuses are boosting demand and profit"

Good. So if something major comes out of this whole thing, let's just pivot!

The clear, hit-you-over-the-head-with-a-hammer learning of the above, is that i) Racing pivots about as well as I mambo (that's not good) and ii) What in the hell can it pivot to? This is horse racing. It races horses.

I think that's why this episode, especially if it gains traction (yet to be seen), is pretty important to the future of horse racing. I don't think that can be overstated. Because the business can not pivot to a new market by a complete change in model like a circus, it must work towards change within its existing model. It's limiting and bound. It's a quagmire.

For years racing was dealt pocket aces - a monopoly on gambling, little oversight in a number of areas, a partnership (i.e. they let racing race and it gives them money) with governments. A year or two ago it was sitting with pocket 9's. Today its hand is much worse. Figuring out how to play these new hole cards is far above my pay grade.