Posts Tagged ‘paul mellon’

By Ray Paulick
With solid television ratings throughout the 2009 Triple Crown season and contracts expiring next year with NBC (which broadcast the Kentucky Derby and Preakness) and ABC Sports (which produced Saturday’s Belmont Stakes telecast), horse racing is in a strong position to negotiate a new deal for racing’s premier events.

The big question when the negotiations with various networks begin later this summer is whether the three racetrack companies that present the races — Churchill Downs Inc., Magna Entertainment’s Maryland Jockey Club, owner of Pimlico, and the New York Racing Association — will work together through Triple Crown Productions or continue to go their separate way on TV contracts.

The three tracks ended an 18-year cooperative venture in 2006 when the New York Racing Association worked out its own deal to telecast the Belmont Stakes on ABC. The breakup followed a rift among the tracks over how the rights fees would be distributed. According to published reports, NBC, which broadcast the three Triple Crown races from 2001-05, paid $51.5 million for the rights to the three events, with Churchill Downs receiving 50% and Pimlico and NYRA getting 25% each. In three of those five years, when a Triple Crown was on the line (War Emblem in 2002, Funny Cide in 2003 and Smarty Jones in 2004), the Belmont telecast drew the highest ratings of the three events, and former NYRA chairman Barry Schwartz was among those who felt the revenue split was inequitable.

Coinciding with the breakup of the TV package on NBC was the loss of the Triple Crown’s title sponsor, Visa USA, which ended a 10-year deal that included a $5-million bonus to any horse that wins the Triple Crown. That sponsorship was said to be worth $25 million. With Triple Crown coverage divided between two networks, Triple Crown Productions has been unable to secure another title sponsor since Visa’s departure.

Prior to Visa, Chrysler Motors had sponsored the Triple Crown Challenge, which in addition to the bonus to a Triple Crown winner also paid a $1-million participation bonus to the horse that accumulated the most points in all three races. Some critics said that bonus scheme might convince an owner or trainer to put an unsound horse that had won the first two legs in the Belmont Stakes just to make it around the track and win $1 million. That, of course, is a ridiculous suggestion when you consider the residual value or future earnings potential of a horse that could be compromised by such a move.

The participation bonus ended in 1993 after points leader Prairie Bayou broke down in the Belmont and the late Paul Mellon collected $1 million when his Kentucky Derby winner Sea Hero finished seventh in the Triple Crown’s final leg. It was a sullen presentation ceremony, and Mellon graciously donated the money to the Grayson-Jockey Club Equine Research Foundation.

The Triple Crown may have lost some continuity and promotional value since the participation bonus and points standings were dropped, though it can’t be proven statistically that such a bonus would convince more owners to run their horses in all three races. Participation does seem to have fallen in recent years.

This year, Mine That Bird and Flying Private ran in all three races; in 2008, Big Brown was the only one to do so; in 2007, there was Curlin and Hard Spun; 2006, no horses ran in all three; 2005, Afleet Alex and Giacomo; 2004, Smarty Jones; 2003, Funny Cide and Scrimshaw; 2002, War Emblem, Medaglia d’Oro and Proud Citizen; 2001, Point Given, A.P. Valentine, Monarchos and Dollar Bill; 2000, Impeachment; 1999, Charismatic, Stephen Got Even, Menifee and Adonis; 1998, Real Quiet, Victory Gallop, Basic Trainee; 1997, Silver Charm and Free House; 1996, Editor’s Note, Skip Away, Louis Quatorze, Prince of Thieves, In Contention and Cavonnier; 1995, Thunder Gulch; 1994, Go for Gin and Tabasco Cat; 1993, Sea Hero, Prairie Bayou and Wild Gale; 1992, Pine Bluff and Casual Lies; 1991, Hansel, Strike the Gold, Mane Minister and Corporate Report; 1990, Unbridled and Land Rush; 1989, Sunday Silence, Easy Goer and Hawkster; 1988, Winning Colors, Risen Star and Brian’s Time; 1987, Alysheba, Bet Twice, Cryptoclearance  and Gulch; 1986, Ferdinand; 1985, Chief’s Crown, Eternal Prince and Tank’s Prospect.

Triple Crown Productions and the two bonuses were created in reaction to a decision by the owner of 1985 Kentucky Derby winner Spend a Buck to skip the rest of the Triple Crown and go for a bonus created for a Derby winner that also won a trio of races in New Jersey. For the first time, the three tracks worked cooperatively on marketing, television and nominations. Since the 2006 split by NYRA, Triple Crown Productions’ principal role has been reduced to securing nominations for the races and unsuccessfully seeking a title sponsor. Even the nominations aren’t fully cooperative; the three tracks have different eligibility conditions as we learned with this year’s Preakness Stakes and the short-lived conspiracy to keep Rachel Alexandra out of the field because she was a supplementary nomination.

Let’s hope the tracks opt to work together on a TV deal and put the races back on one network. Other sports, including the NFL, the NBA, and Major League Baseball, thrive by having their playoffs on more than one network, but the Triple Crown consists of just three events, not multiple rounds of playoffs that lead to one championship. This year, there was a very good promotional buildup on NBC leading to the Kentucky Derby, and even stronger marketing of the Mine That Bird vs. Rachel Alexandra matchup before the Preakness Stakes. But things seemed to fall flat in the transition from NBC to ABC, perhaps helped in part by the indecision regarding Rachel Alexandra’s participation in the Belmont. There seemed to be very little promotion of the Triple Crown’s final leg on ABC or on the ESPN sister family of networks until just a few days before the Belmont. ABC’s production values also seemed low in comparison to NBC.

Ratings were extremely solid for the Derby and Preakness on NBC, and even without a Triple Crown bid on the line and seemingly little promotion by ABC, the Belmont Stakes performed well in the ratings, too. This isn’t a sign that overall popularity in racing is on the rise but does suggest that the sport’s marquee events still capture the interest of a large segment of the public.

If the tracks work together, there are great possibilities, not only on NBC and ABC/ESPN but on Fox and CBS. The Triple Crown remains a highly desirable television property, especially if it is held together as a unit where 1+1+1 equals more than three.

Copyright © 2009, The Paulick Report

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By Ray Paulick

One of the Thoroughbred industry’s biggest challenges may also present one of its greatest opportunities. The challenge, brought to the fore this year by a series of widely publicized events but always lingering just off center stage, is the issue of animal welfare. How the industry deals with this subject may be one of its last, best opportunities to derail our slow but steady march toward irrelevance in the eyes of the general public.

The death of Eight Belles in this year’s Kentucky Derby, from all indications, was a freak accident, one of those incidents that could not have been prevented by anyone. But her demise, along with revelations about the routine administration of anabolic steroids to many of the sport’s best performers, shined a spotlight on racing that revealed to the general public some of its darkest truths.

Foremost among those is the question of what becomes of a Thoroughbred when it is no longer useful as a racing or breeding animal. Some owners and breeders take great measures to insure either a productive second life for their horses or dispose of them through humane euthanasia. Too many horses slip through the cracks, however, and end up on meat wagons headed to slaughter houses in Canada or Mexico, or are simply abandoned.

The perception of our sport is shaped by media reports of the cruelty of slaughter or abandonment of Thoroughbreds, and it does not present an image attractive to many Americans, especially a younger generation that is more in tune with animal welfare issues.

That is the challenge.

The opportunity lies in the numerous programs and untold number of volunteers who work to find second homes for Thoroughbreds as riding, pleasure or performance horses, or as therapeutic animals used in programs for the mentally, spiritually or physically challenged, and in prisons where they have helped rehabilitate hardened criminals.

It’s time for the racing and breeding industry to fully embrace programs like the Thoroughbred Retirement Foundation, CANTER, Rerun, Tranquility Farm, Thoroughbred Charities of America and others, instead of pretending the issue of unwanted ex-racehorses does not exist.

Last week I heard a presentation on how our sport can energize its “brand” from marketing expert David Aaker at the Asian Racing Conference in Tokyo, Japan. Aaker, an advisor to Japanese advertising giant Dentsu and professor emeritus at the Haas School of Business at the University of California-Berkeley, talked about how some other businesses have energized their brands by hitching their wagons to something outside of their core business that it is interesting, relevant and compelling to their customer base.

Avon, one of the oldest cosmetic brands for women, was cited as one very good example. There was little the company could do to energize itself by making better lipstick, Aaker said, so it found an issue with great relevance and interest to its female customers: breast cancer. Avon put enormous resources into a breast cancer awareness campaign, created a foundation to support breast cancer research, and promoted an annual Avon Walk for Breast Cancer throughout the world. Breast cancer research and other social issues relevant to women were foremost among Avon CEO Andrea Jung’s program to rebuild and re-energize the Avon cosmetic brand. It has been a great success.

What social issue is of great importance to current and potential racing fans? I think that’s a no-brainer: it’s the humane treatment of the animals that give us so much pleasure and entertainment.

Look into the eyes of any fan when a horse dumps its rider in the post parade and takes off on a perilous solo run, or when a horse breaks down in a race or is carted off on an ambulance. It’s not just the champions our fans care about, either, it’s those low-level claimers they’ve followed in the first or last race on any day at any track.

Racing is fortunate to have people who are animal lovers and do what they can to protect them. Just today, Madeleine Paulson Pickens is reported to have come up with a plan to rescue from death the tens of thousands of wild mustangs who have roamed the American West and are so much a part of our culture. The late Paul Mellon bequeathed a most generous gift to the Thoroughbred Retirement Foundation that will benefit former racehorses for years to come. John Hettinger dedicated the last years of his life to ending slaughter and protecting our horses.

But it’s time for racing, as an institution, to understand that what’s good for our horses is good for our sport, to face this challenge and embrace it as an opportunity. The Jockey Club realized this with its recent announcement that it will give to horse retirement causes and offer breeders an easy way to donate funds to this cause whenever they register a foal. Suffolk Downs officials established a zero-tolerance policy against trainers sending horses to slaughter and a few other tracks have followed their lead.

But the clock is ticking. Voters in Massachusetts banned dog racing in that state Nov. 4 because of concerns over animal welfare. It’s not a stretch of the imagination to see similar measures taken against the racing of horses. Think about that for a minute.

We have some very bright people in this industry, people who can understand what marketing expert Aaker was talking about with Avon and apply the same principle to help both the horses and the business of Thoroughbred racing. We can energize the Thoroughbred racing "brand" by taking on one of our biggest challenges and viewing it as an opportunity to sell our sport to a new generation.

Copyright © 2008, The Paulick Report

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