Cup Cuts - by Dan Liebman

The first Breeders’ Cup was held at Hollywood Park Nov. 10, 1984. But in January of that year, long before the first event day, nominators began receiving checks from another of the fledgling organization’s programs, the $10-million Premium Awards.

Calder Race Course was the first track to run a stakes enriched with supplemental monies from the Breeders’ Cup, with 428 stakes at 85 racing associations in North America designated to receive funds to boost their stakes programs.

An examination of the percentage of non-restrictive stakes at each track determined the allocations, with Breeders’ Cup and track officials then determining which races would have their purses increased. Nominated horses would run for the entire purse; non-nominated horses only for the money from the racing association.

In addition, foal and stallion nominators would receive awards, a way to earn back a portion of the dollars breeders pay to fund the Breeders’ Cup.

Over the ensuing decades, the Premium Awards program has been worth a varying number of dollars, enriched different numbers of stakes, and was even sponsored for several years by Budweiser. Now, it has been discontinued.

In a memo to racing officials Dec. 11, Breeders’ Cup senior vice president Pam Blatz-Murff cited “anticipated losses in nominations revenue and the worldwide economic downturn” as causing a decrease in Breeders’ Cup revenue in 2009 of more than $10 million. The stakes program was cut, as was, the memo said, “more than $5 million in television and marketing spending.”

With premium stakes allocations now withdrawn, racing offices, Blatz-Murff said, should “rewrite your condition and stakes books to reflect this change.”

What a week for racetracks. In addition to the Breeders’ Cup bombshell, Santa Anita announced a 10% across-the-board purse cut and Calder was forced to eliminate three grade III $100,000 stakes races. This all comes on the heels of November’s significant drop in handle.

When the Breeders’ Cup began in 1984, its championship event day consisted of seven races with purses totaling $10 million. In 1999, the Filly & Mare Turf (gr. IT) was added, and the purses rose to $13 million. In 2007, flush with money from rising stud fees and profitable investment accounts, Breeders’ Cup expanded, adding three races and changing the event to stretch over two days. This year, the program expanded to 14 races featuring purses worth $25.5 million.

Now, with the stock market in turmoil and stud fees falling, Breeders’ Cup officials were forced to make some hard decisions. But it is difficult to know the full financial picture, because though funded for 25 years by breeders, the Breeders’ Cup does not issue an annual report to the industry.

Unfortunately, in deciding where to cut costs, the Breeders’ Cup has opted to cut a program that stretches across North America and rewards more nominators and horsemen in favor of two days of racing and a total of 14 races.

The Breeders’ Cup is one of the few ideas in racing that has actually endured, but it has not caught on with general sports fans. Few know it by name and the television ratings have never taken off. The Classic (gr. I) will never replace the Kentucky Derby (gr. I) as the race non-racing fans can identify with.

On the other hand, the stakes program was a way to enhance stakes at large and small tracks alike. Whether the race was increased from $20,000 to $25,000 or from $200,000 to $300,000, it was a chance for eligible horses to earn more and for owners, breeders, jockeys, and trainers to be rewarded for supporting the program.

Racing secretaries and stakes coordinators are understandably disappointed by the decision. Many breeders will be, as well. Tough times lie ahead for breeders. Now they have fewer chances to recoup some of their nomination money.

Scaling the event back to one day to save the Premium Awards would have helped more horsemen.

14 Comments

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Tiznowbaby

Aside from enhancing the stakes program nationwide, what about the scam they pulled on breeders? Breeders have paid their fees on stallions and foals in good faith. They paid them because those horses, realistically, had their best shot at some of the breeders cup money through this regional program. Now, they've been slapped in the face and told we're taking your money and it's going to the big boys only. What a bait and switch. It's ethically wrong.

16 Dec 2008 12:02 PM
Karen in Indiana

I agree. Changing the rules in mid-stream and leaving people who took them at their word holding an empty bag is ethically and morally wrong. If they are going to do that, then shouldn't they give breeders the option of a refund? It seems to me like some of the people in this sport are it's own worst enemies.

16 Dec 2008 12:19 PM
aspradling

For this year, it might be better to cut races back to one day.

That makes more sense to me than cutting the funding to stakes across the US. That money would be able to help the smaller farms shoot for the BC. It is a reward for the hard work of raising these atheletes.

16 Dec 2008 1:21 PM
LittleGuyBreeder

For regional breeders like me, the only reason for nominating foals and stallions was for a chance at the local BC-sponsored races.  Without those, a breeder at my level can never hope to compete with the Coolmores, the Sheiks and other ultra wealthy that can buy their way to the Winner's Circle, as well as breed at the stratospheric level. You might as well call it The Super Wealthy Racing Weekend and get it over with.

For some members of the BC BOD to say that we Little People will not care about losing our only shot at decent breeder and stallion awards is insulting.  I don't pay into this thing to make sure Coolmore, and others can be assured a $7M purse to help promote their next overpriced and over-hyped stallion prospect!

And while we're cutting purses, why don't we get rid of the current purse level requirements for Graded Stakes races in this country, so some of these races can be elevated back where they belong.  The Suburban should never be a Grade 2 race!  If owners would quit retiring their older handicap horses or only shooting for the biggest purses, this wouldn't be happening.  Prestige and tradition used to mean more than money.

Greed is going to kill our industry and it's going to be the guys with the money at the top who make it happen.  It's depressing.

16 Dec 2008 1:48 PM
joe

I attended many Breeders' Cups, but in the past few years the seat prices have been ridiculous, and placing all distaff races on one day diminished the Saturday card for the fan.  That first Breeders' Cup has been blown up into a sprawling, confusing mess:  Quick, name this year's winners.  For too long racing has been run-into the ground-as an industry alone to the diminished aspect of sport.  It has been run by a top heavy level of greedy executives, with no regard for the fan, trainers or breeders.  In this day of reckoning the fan, trainers and breeders feel the cuts, but do the execs?

16 Dec 2008 2:17 PM
CRob87

This is damaging.

Even with the "Possible" reversal of their decision..."There Will Be A Backlash" from Breeders.

The bad economy was already going to force some breeders to "Not" be able to nominate their foals of "09, but now that the BC has scared everyone, that percentage will probably triple.   And then probably continue on thru 2010 or even 2011 since those breeders will more than likely take the "Sit Back And Watch" approach for those years.

Personally I think that the best thing that the BC can do now is to "Cancell" the entire Friday card of the Championship weekend, go back to having "All" of the best races on Saturday (Ladies included) and save the rest of that money to fund the 2010 program.   Because "Now" they're going to need it.

If they want to keep 2 of the newer races from the Friday card (Hopefully the Marathon @ 2 miles and 1 other), then they could still promote it as "Saturdays Big 10" or something along those lines.   And then save the rest of the money for 2010.

Just a thought !!!

16 Dec 2008 7:02 PM
Larry

A Breeder's Cup representative stopped by our farm in Pennsylvania almost two years ago.  He asked why my foal nominations  had dropped to just 1.  I said next year there will be none. He said don't you think it adds value. I said, in all the years I have been nominating I have never had anyone ask me if the selling horse was Breeder's Cup nominated.   But they do ask if it is a particular state bred. He said, then they won't be eligible for the Breeders' Cup races. I said let's be realistic as are the people who may buy my horses.  There are over 30,000 foals born each year with, and at the time, one day of Championship races and another 100 plus supplemented stake races. So the odds of one of my owners horses qualifying for a check is pretty slim.  Here in Pennsylvania there were about 1200 foals born.  For a $30 nomination fee they are eligible for a 40% owners bonus of the purse of any race in Pennsylvania.  As the breeder I receive 20% of any winnings, 30% if it is by a PA stallion.  So you see the Breeders Cup holds little value for me but more importantly it is of little value to the people buying my horses.  If I should be lucky enough to breed a horse that gets to the Breeders Cup it would have won more then enough to pay the sublimate fee.  And if the owner did not want to put it up. There would be people standing in line to buy  the horse and pay it. In my opinion there is way too much money thrown at horses and owners that don't need the support.  It is the average horse, the average owner the AVERAGE race that needs the support.  I gathered from our conversation that I am not the only breeder who feels this way because their nominations were down for similar reasons. And that was two years ago!  So what do they do? Not only increase purses for the Championship day they add second day.  Drop the supplemented stake races, which were at one time over 400 to 110 to none.  $25,000,000 could increase the purse of 2,500 races by $10,000. Call me a socialist but it is better then being out of business.  Personally I would slash the Championship purses and devote the majority of funds available to hiring a top PR firm.  The Breeder's Cup lost it direction and mission a long time ago.

16 Dec 2008 7:28 PM
STEVE STONE

Hello Dan...Your op-ed piece is unquestionable reaffirmation that the racing/breeding industry is certainly not impervious to downticks in the economy..particularly the current meltdown that we are experiencing both nationally and globally. Our new President -elect has reiterated continuously that the economy is going to worsen before it gets better..Now how to define that time line in near terms is an moot point. However it should be no surprise to your readers that the Breeders' Cup opted to hold in abeyance for 2009..then quickly reinstate the millions and millions of dollars in Breeders' Cup supplements throughout the country. Whats even more alarming is that there was no mention whatsoever by Bill Farish that the five million dollars allocated for TV and marketing promotional coverage for the two days events has been also returned and will be much utilized to promote these coveted races. The sport vitally needs all of the coverage it can garner..be it print..TV...radio..the internet..outdoor billboards... or whatever..what we don't need now is to have racing be the best kept secret on the planet..The stands are barely full now..especially during the week...I am always non-plussed as to the mentality of these so-called gurus in the game who think that the sport is just going promote itself..magical...and that the stands will be overflowing with fans...particularly new and younger ones just because its been around for centuries...Someone is in denial..Thank you always for your kind window and regards always...Steve Stone..East Hanover..New Jersey..

17 Dec 2008 3:09 PM
James6

Tracks are struggling to have decent purse money if they do not have slots.

How is $10 million dollars that goes out to the horse industry each year to get replaced?

Even less incentive to own or breed a racehorse. Let's shoot the business in the feet!

Racehorse owners -

If a horse can not earn the $30,000 (at least) per year it costs to have him in training - then what? . And that total is sometimes equalled by vet bills. It costs the same to find out if you have a fast horse or a slow one

Does this mean that Breeders' Cup wants slots? The money has to come from somewhere.

Let's step-it-up Breeders' Cup - get a few good regular  horse owners in their to explain to you the way it is.

The backbone of the Thoroughbred horse

business is the average breeder.

Tell us how it is, and ask everyone for ideas how to resolve the money problem -

or Breeders' Cup will disappear and there will be a better program in place made by the people.

Wait and see. I am hearing all sorts of good ideas out there -with user friendly nomination policies.

18 Dec 2008 9:58 AM
Richard R

Well now we know that the cut has been rescinded.  And, we also know, that the BC has taken a hit in the financial markets that might account for their actions of frugality.  Most importantly, we also know that the people funding the show do not know what the people running the show are doing and why they are doing it.  It's the mushroom theory of management all over again.  "Trust me" has a hollow ring to it these days!

18 Dec 2008 10:28 AM
LittleGuyBreeder

Larry's comments hold water if you breed in a state with a good program, such as his, LA and OK, to name a couple or so.  I live in a state with sucky awards that offer precious little incentive, but it's where I live.  I encourage the breeders to my stallion to run them out of state, knowing I won't see stallion awards, but if the babies were BC nominated, we might get a decent check for a 3rd in a BC supported stakes race.  

I called all my mare owners in the past couple days, asking if they would care if I didn't nominate next year.  They said they understood if I didn't want to, and they no longer expected to be able to count on the program being available for them if we all did get a nice horse for our efforts. What a mess!

May I suggest they take some of the "emergency" funds and hire a PR firm that has a reputation for salvaging companies that screw up big?

18 Dec 2008 3:25 PM
Bill

I'm afraid that the legacy of the Breeder's Cup is that the landscape has changed irrevocably for the worse.  Take, for example, a race like the Washington DC International at Laurel. This race literally pioneered international racing here in the U.S.  The race was the crown jewel of Laurel's schedule. The Breeder's Cup Turf eclipsed Laurel's race because of its' place in the schedule and killed it.  There is no way that horses could run in both races. The same thing happened to two other prestigious races: The Laurel Futurity and Selima Stakes.  Both have been obliterated by the Breeder's Cup.  Is this what racing really needs or wants?  How much should be sacrificed so that the Breeder's Cup can thrive?

19 Dec 2008 10:47 AM
AP

Why do we need races for millions of dollars?  If they dropped 6 million from the BC race purses no-one will stay away.  I think to ae this a proper Breeders incentive scheme they probably need to go the other way.  Halve the breeders cup winnings over the two days and drastically increase the stakes program.

20 Dec 2008 3:57 AM
Christine Simmers

Many bad decisions have been made this year, in my opinion:  running the Breeders' Cup World Championship on a track with a troubled surface, and then committing to a second year on that same track; only selling tickets to the Championship in two day package; raising the price to the point that tickets went unsold and the latest outrage of trying to slip in cancellation of the stakes program.  I would like to see the voting record, so that I could vote out the board members making these decisions.  I also would like to see an audit of the finances to see where my investment is going.  I have two nominated foals and two stallion shares, so I have invested for years.  I now have a two year old (soon to start racing) and am counting on being able to participate in the local Breeders' Cup Stakes races in Pennsylvania and Delaware.  I am outraged at the poor decisions being made and call for the resignation of CEO Greg Avioli.

28 Dec 2008 11:34 AM

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