Friday, December 12, 2008

Black Friday

We've been watching as handle has declined and sales receipts have fallen through the floor for the past few months.  But today seems to be when those ongoing causes caught up with racing in a way that none of us in the game could avoid noticing.

Not necessarily in chronological order:
  • The Breeders Cup announced that it's canceling its national stakes program, which provided supplemental financing for 121 races around the country this year;
  • Calder canceled three graded stakes from the current Tropical Park meeting and announced another cut in overnight purses;
  • The Blood-Horse announced plans to lay off 10% of its staff; and
  • The Washington Post, formerly home of Andy Beyer, fired its racing reporter and will drop daily racing coverage.
The elimination of the Breeders Cup National Stakes program probably has the biggest impact of today's events.  According to the Blood-Horse, Breeders Cup staff expects their revenue -- which comes primarily from stallion and foal nomination fees, to decline by up to $10 million in 2009, as fewer foals are nominated (though the cutback in actual numbers in the foal crop is likely to be much more severe in 2010 than next year) and as stud fees, on which stallion nomination fees are based, decline somewhat from recent high levels.

At the same time, the Breeders Cup put nomination and entry fees for its fall championship races up by 20%, from 2.5% of the purse to 3%.  That's $30,000 to get in one of the $1 million races.  By way of contrast, the typical stakes nomination and entry fee for a stakes race at most tracks is 1.1% or so of the purse.

Both these changes put the added burden of declining revenue on only one segment of the industry -- the people who buy or breed to race.  The breeders don't take any of the hit, which I guess one should expect, since it's called the Breeder's Cup.  But that extra $50,000 or so, available 121 times over in the BC national stakes program, might well make a difference for an owner who happens to get a good, but not great, stakes horse. And an extra $5,000 or $10,000 in entry fees may not deter many from entering the Breeders Cup itself, but I just wonder why it is that the race horse owner, who we know is already losing money, has to bear that burden.

At Calder, which is owned by Churchill Downs, Inc., They've canceled the Grade III Stage Door Betty and Frances A. Genter stakes, both scheduled for December 27th, as well as the Grade III Tropical Park Derby, an important turf race for brand-new three-year-olds, scheduled for January 1st. Churchill management, of course, tried to put the blame on the horsemen, who've been involved in a bitter dispute over the division of advance-deposit wagering receipts.  For whatever reason, handle at Calder is down very significantly, and I wonder how many of the longtime owners and trainers who put on the show there every day will be able to make it through another year like this.

The cutbacks at the Washington Post and the Blood-Horse, while not of the scale of the race track-related cuts, are another sign of decline.  The Post has now joined such other papers as the Los Angeles Times, the New York Times and the Philadelphia Enquirer in eliminating daily racing coverage.  Putting together two troubled industries -- racing and newspapers -- seems to be a recipe for disaster. If it weren't for racing meta-sites like the Paulick Report, Equidaily and the Thoroughbred Bloggers Alliance,it would be just about impossible for the committed horseman or racing fan to keep up with the news.  But, valuable as those sites are, they're not going to create new racing fans the way that having Secretariat on the cover of Sports Illustrated would.  For the record, the last race horse on the cover of SI was Smarty Jones in May, 2004.

2 comments:

Winston...not really said...

The shakeout will be painful and prolonged.

The question remains, is there the will to push through to the other side and the acceptance that this business is way too big for itself.

Handride said...

I'd like to think the TBA will be the last one standing! Standings, Free pp's, all the regular news, horse racing customized search, we're not afraid to embrace change, we're making it.