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Monday, December 03, 2007

Notes - Dec 3

- Too busy to blog much today, so I'd like to promote a couple of interesting discussions in the comments section to the front page. Steve in NC suggests that track operators could save some money by cutting back on the purses for graded stakes races. Seems counterintuitive on first glance, but it does make some sense:

When big purses ballooned years ago, it didn't produce any greater public attention for the sport or motivation for horsemen to run their nags more often -- it is just a hugely inflated jackpot for the most successful. Since most of the value to be gained in racing is to boost sire value, a cut in top stakes purses could save tracks $$ without hurting the sport.
And another, anonymous commenter adds:
Since it is so highly taxed, on gross reciepts like utilities, [the industry] should operate as one, setting all graded stakes purses the same, say 250000 for a G1, 200 G2, 100 G3 etc. No other purses would be allowed above 75k.

The money saved would be divided between the operators and the overnight purse account, rewarding the parties that put on the day to day operations.

Against everything I believe in, but the major league tracks simply can not survive while competing against each other. The profit margin is too small.
He/she also adds that the tracks need to get together and set higher rates for their simulcast signals. I'm not sure how anti-trust regulators would react to plans such as that.

But I must say that the purse amounts for stakes races is completely meaningless to me. I don't get the least bit juiced about a particular race because it's being run for $750,000 instead of $250,000. Personally, I wouldn't care less if the Derby was run for $24; and I don't think many other fans or horsemen would either.

But in general, an initiative of this sort would be contingent on the industry-wide cooperation and "commissioner of racing" we often talk about, but never see. It wouldn't work if there were holdouts still seeking to attract particular horses with high purses or outsized bonuses. It is, I suppose, a surrender to the notion that the big money is made in the breeding shed, and an opposing view to those who feel that purses should be raised in order to detract from that prevailing trend. But I don't see any signs that bigger purses could halt the march to the breeding shed, and it's clear that many if not most tracks couldn't afford the kinds of purses that would be needed to make it happen.

And, while tracks are busy cooperating, they could also work on coordinating stakes schedules to avoid overlap. That would also involve reducing the number of stakes races, as Kennedy discussed in his Corridor last week.

Also some interesting discussion following up on my post about Bellamy Road in this discussion thread, and I'll try and get to that in more detail soon. But for now, back to work..

9 Comments:

Anonymous said...

I always thought purses for stake races came from two sources. The owners stake and nominating payments and an amount (if any) from the purse account. If this is correct, reducing purses in stake races would only put money back into the overnights (which may be ok). But I believe a vast majority of the money usually is coming from the horse owners themeselves. So the tracks bottom line won't be effected one way or the other.

Anonymous said...

Things are not looking promising ... from the Albany Times Union web site:

Bruno Worries About The Future Of Horse Racing

December 3, 2007 at 4:27 pm by James M. Odato

Senate Majority Leader Joseph Bruno just finished a hastily called press conference showing that he’s watching the calendar and concerned that no one knows who or what will be running the state’s three top thoroughbred tracks come Jan. 1.

With the New York Racing Association’s franchise expiring Dec. 31, Bruno said he is “frustrated” and “exasperated” that talks with Gov. Eliot Spitzer’s staff have failed to resolved differences the Senate has with Spitzer’s plan to give NYRA a 30-year extension.

Because the private negotiations have not produced a resolution, parties at the table are rumored to be considering giving NYRA a short-term extension, perhaps up to five years. Bruno said that isn’t on his agenda.

Bruno blamed Assembly Speaker Sheldon Silver, who he called a “wimp'’ for about the third or fourth time this fall, for not treating the racing issue as a priority.

The Senate Republican leader said he could probably go along with giving NYRA the racing franchise and giving another entity the right to run track video lottery terminal facilities, which is part of Spitzer’s plan. But he said he desires a VLT casino at Belmont Park, something Silver won’t agree to, to enhance purse funds and money for public education.

And he insists on NYRA’s board of directors resigning and the creation of some sort of oversight body to be responsible for racing, gaming and OTB operations.

He said if no resolution occurs then a state oversight board already in place could take over the three tracks - Saratoga, Aqueduct and Belmont - even though NYRA is threatening to sue to prove it owns the tracks.

“People want to litigate . . . litigate,'’ Bruno challenged.

He said the press conference was necessary to put pressure on Spitzer and Silver to do something. Aides to both men had no immediate comment.

Anonymous said...

I could be wrong, but I am under the impression that most tracks have a purse account, the total amount of which is not entirely under their control. Rather, I think the amount is set as a percentage of revenues that is either imposed by law or negotiated with horsemen, or some combination of the two. That's why you sometimes see announcements that purses have been retroactively increased (because the purse account has been underpaid). If my understanding is correct, then reducing the purses for stakes would make more money available for purses in other races, rather than making the tracks more profitable.

BitPlayer

Anonymous said...

I'm relatively new to the horse racing scene but I have a question regarding jockeys. Why can't jockey's where advertising on them during a race? If they were able to, I feel that more fans would be able to relate to each individual jockey and be able to decipher them better. For example, we all know Tony Stewart is the Home Depot car and Dale Earnhardt Jr is Budweiser. Why can't Johnny V wear Coca-Cola pants and Edgar Prado wear Fed Ex pants? The jockeys would earn extra money and maybe the tracks could save a percentage or so on purses since they are allowing jockeys to get paid for advertising. Do they realize how much Fed Ex would pay someone like Prado to wear their colors during the Derby? 15 minutes of freed ad space in the winners circle plus all the pictures that are shown on all the news casts? I'm sure there is som rule on this that I'm not aware of. Can someone help?

Anonymous said...

True, stakes purses come from dedicated purse accounts and are the owners money, so track would not benefit.

Mea Culpa from me for indicating the savings could be split between the track and horsemen.

Still would rather see the money go to overnight purses to benefit those that put the show on day after day, but it would not help track's bottom line.

Think there have been a few cases where tracks subsidized specific races in order to create a big day and draw some known horse, so at least that would be eliminated.

The argument against advertising on Jock's bodies is on going.

In NASCAR, the sponsorhip money goes to the team that owns the car and employees the driver.

Different situation in horse racing, the owners have been against it for the most part, not understanding why an outside contractor jockey should benefit from riding a horse bought and paid for by them.

Tricky.

Anonymous said...

PS - For example a Muslim owner like Darley would not want an alchohol producer associated with his horse.

Seems like the sponsor would need to negotiate with both rider and owner.

JK said...

Thank you for the explanation on the jockey's advertising question. I understand the owners point of view as well. It just seems to me that if the non-everday horse racing fan can form a rooting interest and can recognize that individual jockey each time he races, then it might bring more fans to the sport. I'm sure Prado gained many fans from his races on Barbaro. If he was able to advertise, the casual fan would've known that each time they watched a race they could look for his colors. I think it would lead to more fans coming into the sport, especially younger ones and that could build the future of the sport. Which in turn leads to bigger purses for the owners as well. I'm sure there are lots of politics involved but to me it seems like everyone is missing out on extra money that the sport needs.

Anonymous said...

jk, nothing should be off the table.

Owners would have to give up the concept of silks, but why not? If it is for the good of the sport they should be on board.

agree recognition factor could draw and hold fans.

Mike D. said...

As an American consumer there is nothing I like more than more advertising in my face. Remember how great it was when movie theaters began opening the show with 10 minutes of nothing but ads?

Baseball and football would be much more enjoyable if the players wore ads. And church, I don't see why Father O'Connell can't put an STP logo on his vestments or add to his outfit a Morgan Stanley cap.