The Brock Talk

Wednesday, May 19, 2010

Neither Paradise Nor Bust, Horse Racing Presses On

Thoroughbred racing in North America is a vast industry that spans all three countries, including every state in the United States whether the home of tracks, breeders, owners and horsemen, management, manufacturing, service, agriculture or fans and gamblers. So whether you're elated by the Medaglia d' Oro filly that sold for a Maryland record $650,000 last week or prepared to take arms against the closing of Saratoga, be aware that all is not lost nor are we paradise bound.

The Triple Crown Bad News
The 2010 Triple Crown has never had much star quality momentum since the injury and departure of Fountain of Youth (gr. 2) and Wood Memorial (gr. 1) winner Eskendereya (photo right). Even before that, Looking at Lucky, who was the favorite to win the Kentucky Derby throughout most of the winter, never got untracked barely winning a troubled Rebel Stakes (gr. 3), and unlucky losses in the Santa Anita Derby (gr. 1) and the Kentucky Derby (gr. 1) presented by Yum! Brands.

Kentucky Derby winner Super Saver provided plenty of star potential coming from the barn of Todd Pletcher and having the services of public favorite Calvin Borel, but that team flattened out in the Preakness and will now skip the Belmont.

To make matters worse for racing fans, Preakness winner Lookin at Lucky will also skip the Belmont and instead be pointed toward the grade 1 Haskell Invitational at Monmouth Park in New Jersey on August 1. So we are left with a Belmont Stakes (gr. 1) without a Kentucky Derby or Preakness winner for the first time since 2006.

The Triple Crown Good News
The NBC telecast of the Kentucky Derby was the highest in 18 years and eclipsed the 2009 Derby telecast that was the highest in 20 years. The 10.3 overnight rating and 23 share mean that nearly one in four television sets turned on Saturday afternoon were tuned into the Kentucky Derby. In terms of comparison to other major league sports on tv, the Derby ratings were higher than the final game of the 2009 World Series, the 2009 NBA Championship final game and the Stanley Cup finals in the NHL.

While the television ratings for the Preakness fell nearly 20% from a year ago, that Preakness was bolstered by the presence of the filly Rachel Alexandra and was among the highest rated Preakness telecasts in two decades. Even with the drop in comparison to last year, the Preakness ratings were still higher than the 2008 telecast and NBC reported that the combined ratings for the two telecasts results in the highest numbers of any consecutive horse telecasts since 1989.

More Good News To Triple Crown Bad News
While the 3-year-old crop of 2010 has yet to develop a horse with much star power, the older horse division is perhaps as loaded with stars as any year in decades.

Zenyatta continues to run into the racing history books and living rooms of America with every race as she continues to add to her now undefeated record in 16 career starts. While 2009 Horse of Year Rachel Alexandra has stumbled a bit in two close losses this year, there is no doubt she will draw attention and crowds when she makes here next start. Should Rachel Alexandra develop any resemblance of her 2009 form and eventually meet Zenyatta, the race will be a significant historical event in racing.

Just below the two superstars looms the popular Quality Road, winner of the 2009 Florida Derby (gr. 1) and undefeated in two starts this year; Summer Bird, the first horse in 20 years to win Belmont, Travers (gr. 1) and Jockey Club Gold Cup (gr. 1); and Rail Trip on the West coast, who looked impressive while winning the Mervyn LeRoy (gr. 2)in preparation for his defense of the Hollywood Gold Cup (gr. 1) title.

Closings on the Coasts?
For at least the last two years, Hollywood Park near Los Angeles has ended a race meet with little or no assurance that it would not be the last. In July 2005, Churchill Downs sold the track to the Bay Meadows Land Company for $260 million in cash. Under the terms of the deal, the company was to continue thoroughbred racing at Hollywood Park for at least three years and longer if favorable gaming legislation was passed in California. Five years later, there are no slots at California race tracks, Hollywood Park Race Track is still running and the Hollywood Park Tomorrow retail, commercial and residential development is still just a plan.

Across town at Santa Anita, owner Magna Entertainment appears to have survived a bankruptcy in their Roman racetrack empire that has spanned to Texas, Maryland, Michigan and various points in between. Now parent company Magna International Development has told the Oak Tree Racing Association, which has leased Santa Anita since 1969 for their non-profit Fall meeting, that they are reneging on a previous agreement and want to void the lease. But California neighbors Hollywood Park and Del Mar near San Diego quickly told Oak Tree officials they are welcome to run the meeting at their tracks. MID blinked and is expected to resume negotiations with Oak Tree Officials.

MID chief executive officer Dennis Mills has a standing offer to play poker at the Sheridan house any time. He wouldn’t last an hour at the same table as my wife.

On the East coast, New York Racing Association president and CEO Charlie Hayward said Monday that cash problems must be resolved with the state or they will not have the funds to continue the Belmont Park meeting past the Belmont Stakes nor open Saratoga. Due to a $17 million shortfall from the New York Off-Track Betting Corp., NYRA, which operates Belmont Park, Saratoga and Aqueduct race tracks, has hit a cash crisis with devastating potential.

Although New York governor David Paterson and various state legislators have pledged not to allow racing to halt in New York, those same politicians have been working nine years to approve a slot operator and allow Video Lottery Terminals to be installed at Aqueduct. Slot revenues are expected to be a large benefit to the NYRA and state bottom line just as it has in other racing jurisdictions where slots have been allowed at tracks.

East Coast Good News
Saturday, Monmouth Park will open perhaps the most anticipated racing season in their 64-year history, offering $1 million per day in purses and attracting some of the top stables from New York, California and Kentucky. The 50-day summer meet is part of a plan that has sliced live thoroughbred racing days in New Jersey to 71 total and eliminating the thoroughbred season at the Meadowlands.

The season will feature racing predominantly on a Friday through Sunday basis in an effort to boost attendance and handle at the track to subsidize the large purses. Management is also counting on full fields and 11 and 12-race cards that are likely to become more attractive to the thoroughbred players across the country.

The racing industry has for years clamored for the "less racing/larger fields" strategy to be implemented in racing jurisdictions throughout the country. But the risk of potential lost revenue due to lost racing dates has been too large for managements and states before the Monmouth experiment begins this week.

Bad Economy Blasts Breeders Too
According to, fees for advertised stallion may have fallen as much as 25% in 2009 and the 2010 season may be even worse for stallion owners and breeders. Gross sales at public auctions in North America fell from $972 million in 2008 to $659 million a year later, a decrease of some 32%. Lost revenues at sales directly and adversely affect studs fees, in particular the summer yearling market.

But the sales markets are showing signs of improvement in the early months of 2010 which will have a positive impact on stallion fees should the trend continue.

One of the leading early economic indicators for public auctions are the success of two-year-old in training sales held by public auction houses Barretts, Fasig-Tipton, Keeneland, and the Ocala Breeders' Sales Co. While gross sales at these auctions have decreased at many of the sales, the Fasig-Tipton Midlantic sale of 2-year-olds in training Monday in Maryland saw horses sold and gross revenue increase 7.9% and 23%, respectively, from a year ago.

One segment of the industry that has done well throughout the 2-year-old season are pin-hookers. (those that purchase yearlings at summer auctions with the express intent of reselling them in 2-year-old-in-training sales the following spring.) The rate of return on investment for most pin-hookers this year has more than doubled into the 70% range according to, giving plenty of hope to the yearling market later this summer.

Good yearling sales means improved stud fees and hopefully the recovery of yet another thoroughbred racing segment from the depths of this latest recession.


Frank said...

Minor quibble: actually, Lucky was unlucky in the Rebel but won anyway.

Brock said...

Good quibble Frank