Searching for Unity, Again - by Eric Mitchell

By Eric Mitchell - @BH_EMitchell on Twitter

When an NFL team builds a new stadium, fat with luxury suites and amenities that will generate multi-millions in additional revenue for the organization, none of the other NFL teams panic.

Other team owners aren’t wringing their hands because the new stadium will cannibalize their markets and erode support for their franchises. Instead, other team owners are wringing their hands in anticipation of what a new stadium could do for them. NFL team owners want to make as much money as they can within their markets because it gives them the financial muscle to obtain marquee players and have successful teams. Success translates into more valuable sponsorships, post-season revenues, and additional merchandise sales.

But this success doesn’t come at the expense of other teams. Even the smallest NFL market has a firm foundation through the league’s collective bargaining agreement that includes evenly shared revenue from television deals with NBC, Fox, CBS, ESPN, and DirectTV. According to Forbes.com, the average NFL team generated $276 million in revenue during the 2011 season...a sum that figures to grow. The broadcast networks will pay an annual average of $5 billion to the NFL beginning in 2014, up from an average of $4 billion paid at the end of the last TV contract.

Compare this scenario with the anxiety created when a Thoroughbred racing state without gaming watches casinos being built in a neighboring state. No one begrudges the windfall for the racing states with gaming, but there is no escaping the fact that the existing structure creates winners and losers within our industry. The purses and state incentive programs enhanced in one location attract new stallions, broodmares, and racing stock from somewhere else. These trends are discussed within this issue in our package on the “haves and have-nots,” which begins on page 3578.

A few states without gaming are holding their own so far, but they are definitely suffering from attrition.

We think back to the promise once held by the National Thoroughbred Racing Association’s “Go, Baby, Go” national marketing campaign and wonder whether racing shouldn’t make another collective attempt to sell itself with some assistance from gaming revenue. In the same way a popular NFL franchise such as the Dallas Cowboys helps boost the value of NFL TV rights for the league overall, the revenue from gaming-rich states could help boost the visibility and awareness of Thoroughbred racing nationwide.

Novices visiting a racetrack often feel lost and intimidated. Wouldn’t it help if every major racetrack had uniformly branded signs and manned kiosks whose sole mission was to educate, guide, and mentor the new fan? What if we had a national campaign generating awareness of the sport and directing visitors to look for these fan-friendly booths? The concept could even be tied and/or branded with The Jockey Club’s America’s Best Racing website and its ESPN GameDay-like national bus tour, which will launch next year.

National marketing is not going to slow the migration of broodmares and stallions, but it might soften the impact if some of the gaming revenue were helping grow the racing product in all states.

Earlier in the year The Blood-Horse explored the potential and obstacles surrounding a national racing office (The Blood-Horse of March 31, pg. 931). While the political obstacles to creating an entity in charge of everything from wagering to licensing to medication testing and enforcement are daunting, several people in the industry suggested a more narrowly targeted effort could be started in areas unrelated to wagering—such as media rights, sponsorship, and marketing, where there is broader consensus.

We know, the national marketing cooperative has been tried over and over…plans go back to the 1960s. At least the “Go, Baby, Go” campaign seemed to get a toe in the door before it slammed shut again. What’s at stake, though, if the Thoroughbred industry doesn’t keep working this problem? Further erosion in the long-term economic health of a $2.24 billion breeding industry, a $3 billion training industry, and a $5.4 billion racing and offtrack betting network, plus about 384,000 full-time jobs directly and indirectly associated with racing.

Maybe it’s a problem akin to achieving peace in the Middle East, but it seems to be a solution worth pursuing.