Tom Jicha

Tom Jicha grew up in New York City and worked with John Pricci at the short-lived revival of the New York Daily Mirror. Tom moved to Miami in 1972 for a position in the sports department at the now defunct Miami News.

Tom became the TV critic in 1980 and moved to the South Florida Sun Sentinel in 1988. All the while he has kept his hand in sports, including horse racing. He has covered two Super Bowls, a World Series and the Breeders’ Cup at Gulfstream Park.

He's been the Sun Sentinel’s horse racing writer since 2007 as a staff member, and continues to this day as a free-lancer.

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Wednesday, December 04, 2013

NYRA will rue its decision to raise admission, parking prices

Things are looking up for NYRA. Slot revenues at Aqueduct have exceeded the most optimistic forecasts. For the first time in years, a positive bottom line for the racing operations is anticipated in 2014. With all this good news, NYRA is rewarding its fans by raising admission and parking prices at Belmont and Saratoga.

MIAMI, Dec. 4, 2013--Real life experience is always more valuable than book learning.

Pricing matters. Raise it, even by what seems an insignificant amount, and you are going to lose sales. This point was driven home to me while I was still early in elementary school.

My family’s livelihood came from my father’s newsstand in upper Manhattan. (It was also where I had my first introduction to bookmakers. But that’s a story for another day.) My first recollection of what my father did was when the Daily News and Daily Mirror were 4 cents apiece.

I remember when they raised the price to a nickel. It seemed a welcome development beyond the extra revenue. By that time I was giving my father an occasional break when school allowed. It was a huge pain in the ass to give a penny change for each sale.

But a big downside immediately showed itself. In spite of the higher prices—actually, because of them--our family’s income took a substantial hit. Hard as it might be to believe now, that penny made a difference to a lot of people. The number of papers my father sold declined sharply.

To some readers, who could easily handle the increase, it was a matter of principle. They felt they were being squeezed and resented it.

These examples are relevant in light of NYRA’s announcement that it plans to raise admission prices next year at Belmont and Saratoga. It is absolutely mind-boggling and unacceptable that grandstand admission is jumping from $3 to $5; clubhouse $5 to $8.

NYRA’s photogenic president Christopher Kay labels the increases modest. In what universe is a 67 percent increase for the grandstand and 60 percent for the clubhouse modest? That’s huge and almost unheard of in any business, especially one that is struggling in vain to retain customers.

The biggest challenge for any race track is ever dwindling low attendance, which has been on a death spiral for years. NYRA is down 9 percent this year. Even Saratoga, which massively promoted its 150th anniversary this past summer, was down.

There’s no telling how steep the decline at the Spa really was. Saratoga’s attendance has been bogus for years, artificially inflated by thousands of spinners on giveaway Sundays, who could be seen walking away from the track, their arms laden with goodies, before the horses were in the paddock for the first race.

Kay’s remedy to reverse the slide? Raise prices.

This is a kick in the soft spot for the loyalists left. The only possible rationale for the increase, which all business principles teach will cost NYRA customers, is that they will make enough money shafting those who do come to the track for an extra few bucks a day to make up for those who find other ways to bet the horses--or not to bet them anymore.

Parking is also going up, although to what extent hasn’t been disclosed. To a racing fan, the price of parking is merely an adjunct to the admission gate. It’s all part of the cost of a day at the races. If there is a business anywhere that has corrected a slump by raising its prices, its identity remains secret.

The reason for the increases is what’s really galling. It’s unmitigated greed. Aqueduct will remain free because of its racino, which is generating profits beyond the wildest imagination of the most optimistic forecasters. But unlike other tracks that have to get by without slots, Belmont and Saratoga might as well have slots because they share equally in the proceeds under the NYRA umbrella. There is no separate Aqueduct revenue, Belmont revenue and Saratoga revenue. It is all NYRA revenue.

Instead of rewarding those who have stuck with it for this windfall, by cutting prices and/or reducing takeout, NYRA is socking it to them.

Whatever happened to Kay’s goal to enhance the race track experience? My experience doing anything has never been enhanced by paying more. This is an especially strange strategy from a former executive at Toys R Us, which became the industry leader by selling its goods at bargain basement prices.

Kay told the Blood Horse that he hopes to reduce the drop off at Saratoga by broadening the marketing reach to include the entire Northeast corridor. I can envision the campaign. “It might cost you a small fortune in gas and tolls to drive hundreds of miles to Saratoga but we’ll make it up to you by soaking you more for admission.”

Because of the ancillary expenses of a trip to the Spa, as well as its atypical ability to draw younger fans who are more budget conscious than older horse players, Saratoga might be the most sensitive to price increases.

Here's something else that Kay probably didn't consider. At $5 a pop, rather than $3, those giveaway trinkets won't be so alluring to spinners. Lose several thousand on each of the giveaway days and there's no way Saratoga attendance doesn't continue its downward trend.

For the first time in years, NYRA expects to have a positive bottom line in 2014, exclusive of VLT profits. If this projection is based on increased revenue from higher admission and parking prices, while ignoring the reality that fewer people in the stands means fewer dollars bet at the windows, NYRA and Kay are in for a most unpleasant surprise when the books are audited this time next year.

Written by Tom Jicha

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