Strategic Thinking

By Alex Waldrop, President and CEO of the NTRA

Here is the situation.

Trillions in stock market value have disappeared.  Similarly, trillions in retirement savings are gone.  The nation’s credit markets are just beginning to recover from near-collapse.  Housing values are down.  College savings have been seriously eroded.  And the money companies need to make payroll has all but disappeared resulting in a 9.5% unemployment rate nationally (likely headed to 10% by year end). 

The Internet is destroying or redefining business models right and left.  Publishing is hurting.  Newspapers are near extinction.  Weekly and monthly periodicals are on the ropes.  Even network and cable television is looking over its shoulder at the possibility of competition from web based distribution platforms. 

Professional sports are seeing unprecedented declines.  Loss of advertizing and sponsorship dollars are hurting the seemingly invulnerable NFL as well as NASCAR, whose  business model is frequently touted as one that could resurrect horse racing.  Even new luxury sports venues like Yankee Stadium are having trouble filling seats.  

Closer to home figuratively speaking, 2009 YTD wagering on Thoroughbred horse racing is down 10.5% and purses paid to owners are down 5.6%.  In the Thoroughbred sales sector, 2008 gross sales of broodmares and weanlings were down 40% and 34%, respectively, and that trend appears to be continuing in 2009.  Stud fees (the life blood of many commercial breeders) are dropping to match declines in sales prices.  MEC is in bankruptcy.  Year-round racing circuits in California and Kentucky and elsewhere are in jeopardy. 

With all of this negative news, what should Thoroughbred racing do to emerge from this slump?  These are questions we will be asking ourselves over the next few weeks and months as we convene a meeting of the NTRA Board of Directors to discuss the strategic direction of the NTRA going forward.

Do me a favor.  Let me know what you think is the biggest single challenge facing Thoroughbred racing in the coming months and years.  And let me know how the industry in general and the NTRA in particular should address that challenge.

As you consider my request, keep the following industry strengths in mind.  Unlike most other forms of gambling, pari-mutuel wagering on horse racing is widely accepted by the public.    Because our business model is built almost exclusively on wagering revenue, we are not as vulnerable to the declines in advertising and sponsorships that are negatively affecting other sports businesses at the present time.  We have a well developed Internet presence with numerous legal on line wagering platforms operating on a nationwide basis and a very active network of bloggers and social networking sites. Our biggest event, the Triple Crown, is hugely popular with core and casual fans, and our end of the year Championship, the Breeders’ Cup, has global allure.  Finally, our equine athletes are extremely appealing to almost every demographic segment.  

One other advantage of racing’s much-maligned decentralized, egalitarian business model is the ability of fans like you to have a meaningful say in its future.  After all, it was you, the fans, who led to the formation of the NTRA Safety and Integrity Alliance.  The Alliance is already making significant progress toward the goal of implementing safety and integrity standards on a uniform, nationwide basis.   Once again, this is your chance to help shape our future.  Let me hear from you.


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