Derby Business Lessons

There is no question that racing came out a winner last weekend. Kentucky Derby attendance and handle gains, I believe, are testament to the exceptional power and allure of America’s favorite horse race.  The Derby’s unusual combination of history and tradition, national TV exposure, expansive media coverage and direct engagement through social media platforms make for a potent blend of sport and entertainment—one that has become a unique part of the fabric of America.   

While there is indeed only one Kentucky Derby, some of the factors that contribute to its success can be emulated on perhaps a smaller scale elsewhere on other race days. Time and again, we have seen that Thoroughbred racing has broad appeal if properly packaged, marketed and promoted. Quality racing with full fields, convenient wagering, a high degree of safety and integrity, modern facilities, and other factors, are hallmarks of racing's biggest days.

Marketing and promotion are indispensable to commercial success.  Earned media exposure is critical.  Social networks are essential.  But especially when money is tight, tracks and horsemen must work together to attract fans.  

In racing terms, marketing entails full, competitive fields offered through a menu of reasonably-priced and comprehensive wagering options.   Tracks have to card a broad spectrum of races with adequate purses. Horsemen have to enter and race provided the equine athletes they care for are ready to compete.  Nothing kills handle faster than short fields with heavy favorites.  Derby weekend offers horseplayers lots of action on huge fields populated by quality horses.  Bettors thrive on the plethora of wagering opportunities and relish the huge, stable mutuel pools.  It’s a recipe that works every time.

Another effective marketing tool in racing involves the thrill of direct participation.  The Derby’s 20 horse field is as big as it gets in this country and each year, they have to turn away potential entrants.  Every owner wants a horse in the Derby.  And thanks to the rise of the racing partnership, just about anyone really does have a chance to own part of a Derby winner.  There are 20 separate partners in the Team Valor International syndicate that owns Derby winner Animal Kingdom.  Partnerships spread the risk and enable more to experience firsthand the joy of horse ownership.  Kudos to Barry Irwin, CEO of Team Valor International, and all other partnerships that are out there working every day to bring more people into the business as owners.  There is no better way to sell our game.

Good marketing necessitates maximum accessibility.  On track, there are multiple ways to get a bet down on Derby Day.  Yes, the time between races can be long but that only benefits the live patron.  Bettors rarely get shut out on Derby Day.  And with new hand held wagering devices and ADW options, wagering is more convenient than ever.  Add wall-to-wall live national television and radio coverage, community involvement and support, and a policy that no one will be turned away and you have all the ingredients for a record-setting event.   

Savvy marketing also requires accountability.  Are the horses competing in a safe environment?  Are there people looking out for the safety and welfare of the athletes?  Is the drug testing fair and comprehensive? What about the wagering?  Is it secure?  Churchill Downs (along with the other three racetracks operated under the CDI umbrella) is a market leader in the area of safety and integrity. Just last week, Churchill was re-accredited by the NTRA Safety & Integrity Alliance. And its Safety from Start to Finish initiative is a model that other tracks can and should emulate as they seek Alliance accreditation. All these matter to customers.

What about the facilities?  Good marketing demands that they be modern and convenient.  Do they provide many of the amenities found at other sports and entertainment venues?  Are they clean and well maintained?  Ten years ago, fans sent a clear message to those of us running Churchill Downs that we either had to upgrade the facility or risk watching the Derby lose its luster. Churchill Downs spent the money and revitalized the venue. Since the completion of the restoration, Churchill has seen a steady stream of record crowds and exploding on-track handle. People respond to their environment. If it’s not pleasing, they will go elsewhere.

Yes, the Derby is unique, and its success is probably beyond the reach of most racetracks in the U.S., but there are lessons to be learned by all in racing.
What did you like about the Kentucky Derby?   If you are new to the sport, tell me what worked—or didn’t work—for you.  Let me hear from you.

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