(Originally published in the May 15, 2010 issue of The
Blood-Horse magazine. Feel free to share your own thoughts and
the bottom of the column.)
Breeders’ Cup is at a crossroads. Will it continue rotating host sites annually or take the bold step of designating Santa Anita as the permanent venue for the near future? Controversy surrounds this approach.
In making a case for each of the models, I find only one for the current format. It is a known, and Breeders’ Cup will incur little criticism if nothing changes. It is the safe path and one that would arouse little political animosity.
In contrast, there are a stack of reasons to make Santa Anita the permanent host site.
The weather is an obvious one, and Southern California has some of the best. The odds of having a bright sunny day in November are certainly magnified on the West Coast.
Santa Anita has a facility and backdrop that is recognized as one of the most appealing in the world. The morning experience of watching horses train at Clocker’s Corner is second to none, and the excellent grandstand seating allows great fan contact with the afternoon races.
The Los Angeles area offers many world-class alternatives to families who want to experience other entertainment and cultural options. It has well-located hotels and excellent restaurants with easy access to multiple airports.
L.A. is the heart of the entertainment industry. Bringing the stars back to the races will be a huge asset in stimulating fan interest and attendance.
Sponsorship opportunities are increased with a permanent site. A good example of this is the U.S. Open Tennis Championship, which grew sponsorships from $14 million to $60 million after establishing a permanent site. Sponsors want predictability, which is diminished by rotating venues.
Optimizing financial efficiencies is the cornerstone of successful companies. Changing venues annually is a daunting challenge and is counterproductive to creating leverage in negotiating the best possible deals with host sites. The carrot of an annual event that brings in significant local revenues also creates leverage in negotiating favorable tax concessions with the city and state.
Holding an event at the same site over a period of years creates great opportunities to continually driving costs down. Vendors are incentivized to give the best pricing. Staging logistics are streamlined in allowing equipment, signage, products, etc. to be stored from year to year. When an event is repeated at the same site, the quality of the production goes up. Everything becomes more predictable, and the end product is elevated.
The international racing community has demonstrated over the last two Breeders’ Cup events that it will bring its best horses to Santa Anita. This is essential to the survival and growth of the event and our worldwide betting pools. We are a global industry, and we have to do everything we can to maintain Breeders’ Cup as the true World Championships. Dubai has made a bold challenge for this title with the establishment of the spectacular Meydan Racecourse. The Dubai Racing Club will continue to expand its product and increase purses. The path Breeders’ Cup chooses will determine whether this challenge is successfully met.
In 2007, Breeders’ Cup expanded the format with an extra day and six additional races. The increased revenues have helped to decrease the deficit created by a dramatic decline in foal nominations but still fall short. It was controversial when implemented, but it has proved to be a critical decision to the bottom line. The 2009 Breeders’ Cup was one of the few successes in a year that was devastating to our industry, and the extra day along with the venue repeat certainly contributed to that success.
But the most compelling reason for making Santa Anita the permanent venue is the sheer survival of Breeders’ Cup as a viable and profitable company for the advancement of our industry. If Breeders’ Cup is unable to sustain itself and ultimately grow, it will certainly insure the continued decline of Thoroughbred racing in North America. Companies blind to the evolving landscape of their markets and paralyzed by fear of change are destined for decline and failure. The ability to grow purses or even maintain the current level will be extremely difficult, if not impossible, with the current model and industry economics.
The time is right to make Santa Anita the permanent venue. It is the correct business decision for the Breeder’s Cup event and the future of our industry.
Bill Casner co-owns WinStar Farm and is a board member of Breeders' Cup Ltd. WinStar is the owner/breeder of 2010 Kentucky Derby winner Super Saver.