Tuesday, March 09, 2010

Beyond Provincialism, Audacious Monmouth Plan a Blueprint for Saving an Industry?

SARATOGA SPRINGS, NY, March 9, 2009--If New York racing knows what’s good for it, and if the racing industry in general wants to grow instead of subsisting, withering and, eventually, disappearing, it had better wish Monmouth Park and New Jersey racing all the luck in the world.

Virtually since the day after hosting the Breeders’ Cup, Monmouth Park and its horsemen began thinking about a new model that would ensure its existence going forward. Like every other racetrack in this country, big and small, it’s in survival mode.

But that’s what happens when you fall out of favor, are no longer a part of the fabric, and betting revenue drops nearly 25 percent in the last two years. To be provincial about Monmouth’s grand experiment this summer would miss the point at best, myopic at worst.

This is bigger than whether Monmouth can effectively compete in a racing environment in which it finds itself surrounded on all sides by slots-infused competition. It is bigger than seeing how negatively Monmouth Park’s incursion into the high end of the “good horse circuit” negatively impacts Saratoga Race Course this summer.

And so all with a vested interest in this industry needs to root for New Jersey to succeed in 2010. If it doesn’t, there won’t be a 2011 in the Garden State. If it doesn’t, then the rest of racing has no future, either. Monmouth Park has created a new paradigm, a model that finally--finally--addresses the state of the modern game.

As Monmouth Park vice president and general manager, Bob Kulina, and trainer John Forbes, president of the New Jersey Horsemen’s Association, expressed so clearly on an NTRA conference call Tuesday afternoon, the public has spoken: “Racing has got to change.”

“We’ve gone from a local sport to a national sport with simulcasting,” explained Forbes. “Fans want larger fields and better horses. We decided to concentrate on the big picture rather than worry about the provincial aspect, focus on what the customer wants.

“After the 2007 Breeders’ Cup, we knew we needed a future to survive,” Kulina added. “Our customers want a better product and we’re going to give the players what they want. We’re in the entertainment business. We had to try to provide [a picture] of what racing in this country should look like.”

To accomplish the goal, Monmouth Park, with the help of its horsemen, have come up with an audacious model, a 49-day summer meet that will be held on Friday, Saturday and Sundays only, including three additional holiday Mondays.

A Monmouth racing weekend basically will package 12-race programs with an average daily purse distribution of $1-million, or about $250,000 more than Saratoga-based horsemen raced for last year.

Special-weight maidens at Monmouth Park this year will race for a purse of $75,000; a three-other-than allowances will go for $90,000; an overnight stakes, $100,000. There will be an average 2.5 Jersey-bred races per program. Their state-bred maidens will race for a $75,000 pot. Any Jersey-bred that finishes 1-2-3 in an open race earns a 20 percent bonus from the New Jersey breeding fund.

In the modern era, thoroughbred racing in New Jersey has embraced innovation. Because of its proximity to New York, it had to. The graphics packages on the nightly “Racing From the Meadowlands” cable program were always a step ahead of the competition. I was there. I know.

The bundling of thoroughbred stakes on a single card also broke new ground. It led to the special-event days that are so prevalent nationally today. They were the first track I know of to refer to their customers as “guests,” and treated them accordingly. They served gourmet fare in their tony Equestris restaurant, also a racetrack first.

Now thoroughbred racing at the Meadowlands will be no more, shifting to Monmouth Park for 22 days after Labor Day. They will race Saturdays and Sunday only, for purses reverting to a more New Jersey-like $250,000 daily. Standardbred racing will fill the gap in the Meadowlands schedule by adding three-day-weekend harness programs.

For Monmouth Park and the New Jersey thoroughbred industry, this enormous gamble could be a last hurrah. Kulina and attorney Dennis Drazin, a horse owner and former president of the NJHA, knew they had to come up with a product that the public wanted, one that bettors would embrace. They’re betting that quality racing will do that.

“This is a one-year plan,” Kulina said. “With proper funding to attract better horses and with the proper number of [racing] days, we could then go out and secure more funding. But we need to prove that it will work. We made some soft projections and are taking a gamble we can double our handle.”

Obviously, if you put up that kind of purse money, they will come, from all over the Mid-Atlantic and New York, especially New York. Kulina mentioned that in recent years Todd Pletcher, Kiaran McLaughlin and Bruce Levine have had sizable divisions at Monmouth Park.

Linda Rice, Saratoga’s leading trainer in 2009, also has enjoyed successful Monmouth meets in the past. It’s easy to understand why local horsemen, and the NYRA, are anxious.

“Of course, we’re very concerned about smaller horsemen, but our sense is that we have to look toward the future,” said Kulina. “We’re in the middle of five states with slots revenues. Small horsemen don’t have the kind of horses that America wants to bet on. [If they can’t compete] they will have to go by the wayside.”

Before anyone thinks that’s cruel and unusual, the alternative is worse. “When Dennis and I had to come up with a plan, we thought about the glory days of the 50s, 60s and 70s and how racing was back then, a series of 30-day and 40-day race meets. Horsemen were moving all the time.

“Obviously you can’t do that today. But if you reduce the number of opportunities for live racing you can put out a better product, and that helps everyone. We learned at the Meadowlands that when fans showed up at for daytime simulcasting from Saratoga and Keeneland, it hurt our live racing at night… And simulcasting at the Meadowlands was very successful.”

What Monmouth management and its horsemen have created is a formula for success but the consumer, in Kulina’s words, “needs to embrace this.” And so this is much bigger than a provincial issue between New Jersey and New York, between Monmouth Park and Saratoga Race Course.

One proven way to boost handle and generate interest in Monmouth’s past performances would be if, during this experimental period, the track received permission from the state to lower parimutuel takeout, at least in a few featured betting pools. Lowering the rake is also what the customer wants.

And what will it all mean when Saratoga opens its extended 40-day race meet, July 21? “We think that Saratoga is still the best summer meeting on the East Coast,” said Monmouth Park’s general manager. “I know there’s a place for both of us to survive.”

Written by John Pricci

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Thursday, February 25, 2010

Rachel v. Zenyatta: Where’s the Network Coverage?

SARATOGA SPRINGS, NY, February 25, 2010--To paraphrase a convalescing Vito Corleone from Godfather I, who admitted to liking wine more than he used to, I feel the same way about the winter Olympics: Well, I’m watching it more, anyway.

Back in the day, I felt the same way present-day sports talkers feel: How modern era Olympics exist as a made-for-TV event, appealing to a contrived sense of patriotic nationalism performed by pro athletes, not the amateurs of yesteryear.

You could easily blame the old Communist bloc countries for that, especially the U.S.S.R., for subsidizing the Olympic program so their athletes could train full time to earn propaganda points they believed Gold medals provided.

Finally, when we sent Charles Barkley, Larry Bird, Clyde Drexler, Patrick Ewing, Magic Johnson, Michael Jordan, Christian Laettner, Karl Malone, Chris Mullin, Scottie Pippen, David Robinson and John Stockton to Barcelona to play basketball in 1992, all pretense of amateurism was gone forever.

The age of innocence is long gone, too, and so is the time we ask modern day athletes to perform athletic feats that once were the purview of mere mortals. It’s not so much that modern athletes are better, which they are, but technology has made the achieving of excellence that much more difficult.

Forget about whether you think that Snowboarding or the Biathlon or Aerial Skiing are legitimate sports. The more relevant question is why would athletes subject themselves to such risks.

Was there really a need for the world’s fastest luge run? And won’t there will be a point where humans cannot ski jump any farther, traverse a Giant Slalom faster or perform a quintuple axel from the time you leave the ice until the time you return?

Anyway, I was thinking about all this as I watched the Olympics last week and this on NBC when late last week it occurred to a friend of mine to ask: “Where are the ads for the $5-million Apple Blossom starring Rachel Alexandra and Zenyatta?

Then I started thinking about what my friend asked. Where were the ads, indeed? Is the NTRA so broke or so incapable about getting the most important match between two thoroughbreds on the same network that one month hence will broadcast “America’s Race?” And isn’t there some momentum for synergy there?

NBC also broadcasts the Preakness Stakes and ABC is in the last year of their deal with the New York Racing Association to broadcast the Belmont. And it wasn’t a rival network undercutting another.

The fact is that the cashed-strapped NYRA, even before the bottom fell out, jumped at the bigger bucks without inviting NBC back to the table. ABC took a shot that a Triple Crown bid would be a ratings bonanza; NYRA took the money.

This year’s Olympics has proven to be a big ratings winner for NBC, beating “American Idol” in the Nielsen Ratings for the first time ever. And it’s made money for the struggling network, some of which they are expected to spend on regaining the Belmont Stakes, whose contract with ABC is in its final year.

Against this background, why isn’t the racing industry doing everything it can to interest NBC in the Rachel-Zenyatta matchup for $5-million? Are they so happy with the disappointing treatment they’ve received after throwing racing’s eggs into ESPN’s basket?

And ESPN doesn’t even need the money, thank you. To be able to charge top dollar for advertising minutes while stuffing massive basic-cable dollars into the other pocket has helped make them one of the world’s most successful television networks.

If they wanted to, ESPN would be in position to help bring horse racing back into the mainstream. Why would they bother to do that? Because they could probably own the broadcast rights for an entire sport and they’d be able to do it for pennies on the dollar.

Some know-it-all sports-talk host this week berated Oaklawn Park for scheduling the race on a Friday when no one would see it. Perfect. Let’s knock the only racing organization to put considerable money where their marketing mouth is.

What Mr. Know-It-All didn’t realize is that people still go to Oaklawn to watch horse races. And any national media that would cover Rachel-Zenyatta I obviously would stick around for the following day’s Arkansas Derby.

The same host mentioned that Oaks Day at Churchill Downs was the perfect venue. I’m sure Churchill would love to host such an event, just not that weekend. They have spent a decade making Oaks Day the equal of Derby Day. That might never happen but they’re getting closer every year. Now thanks to Rachel last year, the Oaks really is on a roll.

And there’s one other consideration. No event ever will or could be the equal of the Kentucky Derby in that market. And to sandwich Rachel & Zenyatta between the Oaks and Derby would be a logistical nightmare does a disservice to all three events.

I don’t know what the NTRA could have done, or what they might be trying to do with this unique opportunity, one that puts thoroughbred racing back on sports map. But to not scrape up the money to buy time on the same network that broadcasts thoroughbred racing’s premiere event, or use that event as leverage with the network, is yet another opportunity lost.

Written by John Pricci

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Friday, February 19, 2010

Horse Racing and Government’s ONLY Answer

SARATOGA SPRINGS, NY, February 19, 2010--Received a private e mail the other day from loyal HRI contributor Dennis Dotson with a subject line so brilliant that I decided to give the issue an airing, for about the thousandth time.

The issue is the always regressive, counter-productive tax on horseplayers, parimutuel takeout, which is draining any remaining liquidity from the betting pools.

Want to stop those late-odds flashes, or at least slow them down? How about a pool the size of which cannot be adversely affected by a handful of large wagers?

Dotson’s introductory subject line was, in fact, so crystal clear at assessing this issue that you read it in the headline that introduced this piece. The only answer, indeed.

For his part, Dotson is fighting his own battle, one that has made him the bane of every New York Racing Association executive he has written to last year and this.

What Dotson wants to know, and what he feels is his privilege as a valued customer, is whatever happened to the “Survivor” contest, and why can’t he get a reasonable explanation as to why it was discontinued?

He might have received an answer had he refrained from his liberal use of colorful phrases. Frustration, it seems, saps patience from us all.

So, as he stated in his letter: “The Survivor contest attracted thousands of handicapping players from all over the world….

“[Fans] played the contest and many played the daily cards through their local and/or ADW venues. These are thousands that do not live in the state of New York….

“I have written this same e mail six times without one reply….

“The fact that yours was $10 per entry (unlimited entries) and the prize pool climbed upwards of $50,000 at nearly every NYRA track should be screaming volumes at you to bring it back…”

Dotson went on to list a number of tracks that offer this type of on-line contest for free, namely Santa Anita’s, which recently added “Winvivor” to complement its “Showvivor” contest already in place.

Of course, the prize pool at Santa Anita, Youbet.com, and other venues is much smaller--$2,500 was the common amount--than the one offered in the NYRA’s pay-to-play contest.

Digressing, and speaking of “fat chance” issues, is the hope that state legislators from Anywhere, U.S.A. will learn something about the laws of supply and demand that eventually put all those that ignore this axiom out of business.

Or, as Dotson reflected, quoting Einstein: "We can’t solve problems by using the same kind of thinking we used when we created them."

Which brings us to a bill recently introduced by Kentucky House Speaker Pro-Tem Larry Clark that would tax bets made by Kentuckians through account wagering companies such as Churchill Downs Inc.’s TwinSpires.com.

This genius believes that a 0.5 percent tax on advance deposit wagers made by Kentucky residents would generate as much as $400,000 a year.

Really? That much?

Clark envisions that the 400K would be split three ways among the Kentucky Horse Racing Commission, whichever track is operational at the time, with the balance going toward that track’s purses.

Would someone please inform Clark that this amount buys the tracks about two really good allowances races--after first explaining what an allowance race is.

So I guess this means that the 400K would be collected about three times a year so that Churchill Downs, Turfway and Ellis Park could share the largesse. The alternative would be to let them fight among themselves for these table scraps.

But the best part of Clark’s reasoning as to why this kind of commerce should be taxed? “I think it’s something we need to do,” he said. “It’s the fastest growing betting we have now ... and we need to capture some of that revenue (to) put back into purses.”

The bill apparently is a compromise of the one Clark proposed last year that died in committee, calling for a 3.5 percent tax. The current tax rate would be similar to ones imposed by Illinois and Virginia on account wagering.

My question is why the Kentucky Horse Racing Commission needs a third of this projected $400,000. Could it be to pay for commissioners’ salaries?

A few years ago, something like that quietly occurred in New York when a portion of the parimutuel takeout was redirected by law to pay for Racing and Wagering Board operations. America in action: Create a regulatory agency then eventually allow horseplayers to pay for it.

I say go for it, Mr. Clark. Nip this growth thing in the bud. Kill any forward momentum online wagering has and the hope of salvation it provides. Kill it because the Internet is the only avenue for growth left, at least until the current model is scrapped. Fat chance of that, too.

So, as Dotson suggests from his research: “Have a little faith; let God go first.” Or this:

“When plunder becomes a way of life for a group of men living together in society, they create for themselves in the course of time a legal system that authorizes it, and a moral code that glorifies it.”

Written by John Pricci

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