Posts Tagged ‘satish sanan’

By Ray Paulick
I was all set to name Satish Sanan the winner of the first annual John Mayer Foot in Mouth Award for comments he made on Steve Byk’s “At the Races” Sirius/XM satellite radio show last Tuesday from which he was quoted in a Bloodhorse.com article as saying Churchill Downs was the “worst” racing organization and each of the Breeders’ Cups at Lone Star Park and Monmouth Park was a “disaster.”

Then I thought I’d better listen to the show before throwing Sanan under the bus with Mayer, the pop star who made some outrageous remarks in a just-published Playboy magazine interview about former girlfriends Jessica Simpson and Jennifer Aniston, among other subjects. Since the interview was published, Mayer, a profilic Twitterer, said he has “been trying to prove to people I’m not a douche bag.”

For what it’s worth, I don’t think Sanan has to take that drastic of a measure.

He did, however, agree to send out a statement admitting that he “mischaracterized” the relationship between the Breeders’ Cup and Churchill Downs during the course of the interview, which mostly consisted of him responding to criticism from several callers who disagreed with the concept of a permanent site for horse racing’s championship event. The callers especially disagreed with Santa Anita Park being named the permanent site, a rumor that has been making the rounds after numerous trial balloons were sent out by Breeders’ Cup officials but as Sanan pointed out on more than one occasion during the show is a decision that has not been ratified by the board. His personal preference, he said, was for Santa Anita Park to be the permanent site. (Archives for Sanan’s weekly segment on the show, entitled “Our Industry,” can be heard here.)

The full board of members and trustees of the Breeders’ Cup met in Florida on March 3, the day after Sanan’s radio appearance, and the Bloodhorse.com article published that morning apparently caused Breeders’ Cup board chairman Bill Farish’s blood to boil.

Farish issued a testy statement by mid-afternoon:  “The Breeders’ Cup board is extremely disappointed with recent statements from board member Satish Sanan with regard to host sites and those views in no way reflect the official position of Breeders’ Cup, LTD. The Breeders’ Cup has longstanding and valued partnerships with Churchill Downs and the New York Racing Association. No final decisions have been made on host sites beyond 2010 and as we indicated in December the board is looking at a permanent host location as a potential option as part of our ongoing strategic planning initiative. We extend our sincere apology to Churchill Downs and the State of Kentucky. We look forward to our return to Louisville and Churchill Downs for the 2010 Breeders’ Cup World Championships.”

Only Tiger Woods has apologized to more people.

Sanan sent an email to all of the members and trustees on March 4, a copy of which was leaked (not by Sanan) to the Paulick Report.

It reads: “I want to take this opportunity to address and clarify a number of issues raised in Bill Farish’s memo and mischaracterization of my comments during my regular show on Tuesdays on ‘At the Races’ radio network. The facts are as follows:

Regards,
Satish Sanan”

Sanan said things on his radio appearance about Churchill Downs that almost certainly have been said privately by other Breeders’ Cup board members, but the horse industry is not used to someone who serves on some of these exclusive boards being as candid publicly as Sanan has been. Perhaps Farish is somewhat sensitive because his father, William Farish, is the former chairman of the Churchill Downs board, but he knows the attitude about the Breeders’ Cup represented by CEO Bob Evans and his top executives  in negotiations to be host site can be summed up as follows: “We don’t really care if we host your event or not.”

Was there anything to be gained by trashing Churchill Downs, Lone Star Park, and Monmouth Park? No, there wasn’t, and I’m sure Sanan has said other things he’s regretted during the many hours he has spent communicating with racing fans and horsemen on the “At the Races” show. In the heat of the moment, I think Breeders’ Cup chairman Farish was just as much out of line, overreacting publicly to what Sanan was quoted in a news article as saying.

This industry needs people with the candor, the fresh perspective and the creative business acumen that Sanan has brought to Breeders’ Cup and other industry organizations, including the Thoroughbred Owners and Breeders’ Cup, where he is member of a committee addressing issues related to structural changes and horse racing’s broken business model.

The candor sometimes gets him in trouble. “There is a group of people particularly pissed off at me,” he said on the radio show, “not as to what I’m trying to achieve or what the group is trying to achieve, (but about) what I had said about the alphabet soup organizations…People are taking it personally, some of the officers of some of these organizations. Candidly, the old saying in business is if you are trying to solve a business problem, generally speaking people who are part of the problem are people who are going to object to it.”

It’s that kind of candor and blunt talk that doesn’t endear Sanan to some people, but I get the feeling he doesn’t really care about that. We haven’t gotten very far in this business by having boards who rubber stamp cautious executive decisions, discourage open dialogue, and keep electing the same people year after year after year.

Copyright © 2010, The Paulick Report

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The following statement was emailed to the Paulick Report today regarding the comments yesterday from board member Satish Sanan.

Statement from Breeders’ Cup Chairman, Bill Farish
The Breeders’ Cup board is extremely disappointed with recent statements from board member Satish Sanan with regard to host sites and those views in no way reflect the official position of Breeders’ Cup, LTD. The Breeders’ Cup has longstanding and valued partnerships with Churchill Downs and the New York Racing Association. No final decisions have been made on host sites beyond 2010 and as we indicated in December the board is looking at a permanent host location as a potential option as part of our ongoing strategic planning initiative. We extend our sincere apology to Churchill Downs and the State of Kentucky. We look forward to our return to Louisville and Churchill Downs for the 2010 Breeders’ Cup World Championships.
 
Statement from Breeders’ Cup Board Member, Satish Sanan
I mischaracterized the Breeders’ Cup’s relationship with Churchill Downs and other host sites in a recent radio interview. I regret my poor choice of words. As part of the Breeders’ Cup strategic planning process, the board continues to evaluate future host sites and other core business issues.

For the original story on Sanan’s comments, click here.
 

According to Tom LaMarra at the Blood-Horse, Satish Sanan discussed the possibility of a permanent host site for the Breeders’ Cup on the satellite radio show ‘At the Races with Steve Byk’.

Suggesting that Santa Anita Park will change surfaces, Sanan explained the Southern California track has everything needed to become the permanent site. However, when a caller asked if a decision had been made, he responded by saying ‘It’s not ratified yet."

Read it at the Blood-Horse

Then come back to the Paulick Report and let us know what you think

- Bradford Cummings

By Ray Paulick
The Florida Thoroughbred Breeders’ and Owners’ Association published a slick brochure a few years ago titled “On Course,” heralding all the good things going on with horse racing and breeding in the Sunshine State. But the organization might want to rethink that title if it publishes an updated version in 2010.

With only a few exceptions where revenue from other forms of gambling has helped ease a business down cycle, most racing and breeding states are hurting. But Florida seems to have been stung the worst by a combination of the global economic crisis, a collapsing real estate market, and the decline in the economics and popularity of Thoroughbred racing.

A more accurate name for that updated FTBOA brochure might be “Off Track.”

Consider that:

- The number of mares being bred and Thoroughbred stallions standing in Florida have fallen faster than any other state, dropping by 23.3% and 24.0%, respectively, from 2008 to 2009. Further declines are expected in both categories in 2010.

- Florida’s foal crop, historically the second-largest in the United States behind Kentucky, has dropped from a high of 4,511 in 2003 to a projected 2,600 in 2010—a decline of 42%. It is conceivable states like Louisiana or Pennsylvania, with more lucrative breeders’ incentive programs, could surpass Florida in foal production in the next few years.

- A number of large stallion operations, including the Sanan family’s Padua and Frank Stronach’s Adena Springs, have pulled out of Florida.

- Numerous Thoroughbred farms are listed as “for sale” in the Ocala area of Marion County, the self-proclaimed “Horse Capital of the World.”

- The declines in Florida breeding have come after 2004 legislation was passed and a statewide referendum supported a constitutional amendment permitting racetracks in Dade and Broward counties to install slot machines if they got local-option approval. Both Gulfstream Park and Calder in South Florida now have casinos with slot machines.

SEEKING LEGISLATIVE HELP
Help could be on the way. The 2010 legislative session begins today (March 2) in the state capital in Tallahassee, and gambling legislation is high on the list of priorities of legislators and lame-duck Republican Gov. Charlie Crist, who is in the midst of a heated primary battle for a U.S. Senate seat.

The two South Florida racetracks, Florida breeders, and the Florida Horsemen’s Benevolent and Protective Association are pushing for a reduction in the slot machine tax rate from 50% to 35%, a move that, according to the FHBPA’s Kent Stirling, would nearly double the amount of money going into purses from slot machine revenue.

“Everything is fueled by purses, and things look good to get this tax reduced,” Stirling told the Paulick Report. “That should right things. I don’t envision that happening until July 1, but it will certainly help. We’re one of a number of states in a crisis right now with purses that don’t stand up. If we don’t have the purses, you won’t breed the horses.”

Stirling said 6.75% of gross revenue from slots currently go to overnight purses, with breeders getting an additional 0.75%. If the tax rate is reduced from 50% to 35%, he said, purses will get an extra 5.25%, and the amount going to breeders would increase to 1.2%.

“The deal we would get for purses will be very good for horsemen,” Stirling said. “We have long-term contracts signed with the racetracks.”

One concern Stirling and others have is whether South Florida can support the number of slots casinos in the region: the Seminole Tribe operates a massive Hard Rock casino not far from Gulfstream Park; there is the Pompano Isle of Capri harness track in Pompano Beach; Mardi Gras (the former Hollywood Dog Track near Gulfstream Park; and other Indian casinos in the region, in addition to Gulfstream and Calder.

Legislation being proposed also may include a provision giving the FTBOA flexibility in how it distributes its breeders’ awards program, allow Hialeah Park to operate a slots casino, and create a permit to operate a not-for-profit race meeting in Ocala/Marion County.

But a deal with racetracks is only part of the gaming legislation in the works. Still unresolved is a compact with the Seminoles after a proposal by Crist that was tied to a tax break for pari-mutuel slots was rejected by the legislature. That proposal would have given the Seminoles a full-blown casino monopoly outside of South Florida. The tribe has offered casino games without a compact, something the federal government’s National Indian Gaming Commission said is illegal. Earlier this year a House committee rejected Crist’s compact unanimously and voted to uncouple pari-mutuel legislation from any deal with the Seminoles.

Crist’s proposal, though ultimately thrown out, was unsettling to Peter Berube, who runs Stella Thayer’s Tampa Bay Downs, which has seen its business hurt by a second Hard Rock Casino run by the Seminoles not far from the track in Tampa.

“Obviously we are looking for some type of product that’s going to even out the uneven field we face with the Seminoles and the slots in South Florida,” Berube said. “I’m at a very serious competitive disadvantage at this time.”

Berube said there is a separate push to allow every one of the state’s 22 pari-mutuel facilities outside of South Florida to get a total of 1,500 slot machines. A study showed the state would receive $400 million in taxes (based on a 35% rate) versus the $150 million the state would get from a compact with the Seminoles. “And we feel our numbers were very conservative,” he said of the study done by the Innovation Group.

Berube said he is not betting on a positive result. “I gave up trying to handicap Florida politics a long time ago,” he said. “I am somewhat encouraged by what’s going on up there (in Tallahassee) and some of the rhetoric.” A previous attempt by Tampa Bay to get approval for Instant Racing machines, which saved Oaklawn Park, failed to get legislative support.

“Our industry is in tatters here in Florida; it’s abysmal what’s taking place, especially when you are in proximity to Indian gaming,” said Berube. “I’ve seen a decline of 22% from 2008 to 2009 in the Tampa area. Statewide it’s fallen 14%. Nationally, the numbers are down 11% on pari-mutuel wagering. There’s a direct correlation to the Seminoles. We are suffering more. We’ve been here for 80 years, and it would be a shame for this business to go under.”

Tampa Bay is one of the nation’s most progressive tracks, lowering takeout and offering a very good wagering product. Still, he said, the track depends largely on off-season simulcasting, and he’s seen that fall by 42% because of the increased competition from the Seminoles.

CRITICS FORM GRASSROOTS MOVEMENT
Richard Hancock, executive vice president of the FTBOA, said he is confident the legislature will approve a tax reduction on South Florida’s racetrack slots and give the FTBOA flexibility in its distribution of breeders awards. “One thing I’m not happy with is Tampa Bay Downs,” he said. “They need the same help that the Dade and Broward County tracks got. The pari-mutuels there will get killed if the Seminoles expand any more.”

Hancock has been the FTBOA’s top executive for going on 20 years. He’s got his supporters, especially those on the organization’s board, but he also has an increasingly vocal group of detractors. “We’ve gone from $3 million to $15 million in incentives,” Hancock said, in defending his work with the FTBOA. “We’ve been successful and grown the pie quite a bit.”

Detractors say Hancock has not been effective in Tallahassee in getting the message out about the Thoroughbred industry’s needs and has facilitated board members in running the organization like a private club that has been unresponsive to rank-and-file breeders.

Among Hancock’s loudest critics is Ocala horse insurance agent Gordon Reiss, who helped put together a grassroots organization, the Florida Horseman’s Task Force, that began speaking out at FTBOA open house meetings, attended FTBOA board meetings, and traveled to Tallahassee, met with legislators, and organized breeders to call on their representatives to educate them about the Thoroughbred industry. Reiss said the group helped get House Speaker Larry Cretul, an Ocala Republican, to speak at a recent meeting of the Florida Thoroughbred Farm Managers.

“Legislators had no clue about the impact on the horse industry of Indian casinos,” Reiss said. “They saw horse farms as playgrounds for millionaires. Our meetings with them have made a difference.”

Reiss and others, including Bob Monahan, Bebe Luxon and Dr. Ignacio Leon, told the Paulick Report the FTBOA lacks transparency in much of what it does, communicates poorly with members (despite owning a daily publication, Wire to Wire, and the monthly Florida Horse magazine), and has questionable procedures for board elections. Hancock was accused by the group of keeping the board in the dark on issues like the Instant Racing legislation and making important decisions without consulting the board.

Hancock said Reiss is upset in part because he failed to win election to the board.

He does acknowledge, however, that the grassroots movement has been beneficial. “They actually were of some help in letting people in Tallahassee know how desperate things are down here,” Hancock said. “All the stories they told the legislators about horses and people moving to places like Pennsylvania or New York. I have to say it was helpful in getting the attention of the Pari-Mutuel Committee in the House.”

“The loss of 3,000 mares has taken $75 million to $100 million out of the local economy,” Reiss said. “Land values have dropped considerably, and the bank credit squeeze has hurt. Purses are terrible, and there is a lack of leadership. It got to the point where we couldn’t depend on the FTBOA and felt a grassroots movement was necessary.”

Copyright © 2010, The Paulick Report

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By Ray Paulick
A Paulick Report reader commenting under the pseudonym of “another young owner” made the following observation in connection with yesterday’s article that surveyed top executive salaries at 18 industry non-profit associations: “Over $3.75 million a year and our industry has never been worse off… we have some great leaders!”

Actually, the aggregate of the 18 salaries was $3,911,096 and didn’t include bonuses, retirement plan contributions or other benefits.

But the point made by “another young owner” was not lost on me. When you consider that executive salary should only be a small fraction of an organization’s expenditures and that there are many more associations and businesses not included in our survey, it makes you wonder: What exactly are we getting for all that money?

Do we really benefit from and need a TRA and an NTRA, a TOBA, an HBPA and a THA, a TOC and a CTT, a Jockey Club and a Jockeys’ Guild? For the ultimate absurdity consider that we used to have two national organizations for racing regulatory bodies—neither of which really had the authority to do anything.

Perhaps when racing was healthy—a regional or local sport that didn’t participate in interstate commerce–there was little need to consolidate some of these redundant organizations. But today, as revenues are in serious decline among racetracks, horse owners, breeders and in virtually every other industry sector, the status quo will not work.

But don’t take it from me. Owner and breeder Satish Sanan, a no-nonsense businessman who has closely examined racing’s organizationally littered landscape, believes the industry will continue in a downward spiral unless it commits to changing its structure.

Sanan, a weekly guest on Steve Byk’s satellite radio show, “At the Races,” has been speaking out in his regular “Our Industry” segment about the need for a new structure. (Click here to listen.) Yesterday, in reaction to the Paulick Report’s salary survey, Sanan said: “If you look at the so-called alphabet soup organizations from TOBA to NTRA to horsemen’s associations, the THA, and the (Thoroughbred) Owners of California, you can add all that crap up, and collectively we are spending millions of dollars. Each one is doing one or two good functions, but not seriously impacting the growth of the industry. It goes back to, do we need this kind of structure and what the hell is it doing for our industry? We need a single structure and in that structure we have got to find a way to generate more revenue, put more money back into the business, hire the best talent.

“When the NFL and NBA created leagues, they brought people in, paid them millions of dollars, and put governance and structure in place and marketed the hell out of their sport and nobody complains about that because they bring in hundreds and hundreds of millions of dollars. Unfortunately, there is not an organization with the exception of maybe individual racetracks that are customer focused, customer centric, customer-service centric.”

Sanan said Breeders’ Cup–where he is on the board of directors and has led a strategic planning committee that is set to announce its final recommendations at a board meeting on Thursday—is the only association on the horsemen’s side of the industry that has focused on revenue growth. “I do not know of another organization that is tasked with growing the business,” he told Byk.

“The leadership of our industry should be thinking like a think tank and working together, talking about how do we transform this business, how do we go back to how this business used to be, how do we attract new owners, keep the existing owners, keep the existing horseplayers, have them bet more and make it more attractive to them and market the sport so we can attract new ones. I’m at a loss as to whose job it is and who thinks about these things on a daily, weekly, monthly basis. Can you name somebody? I (expletive deleted) can’t.”

Byk couldn’t either.

“We have got to streamline our industry,” Sanan continued. “There should be one horsemen’s organization, not 15. Period. There should be one panel that focuses on nothing but all the issues that are integrity-related: safety, medication, tote and wagering, and build confidence so we can attract new people. We need the best of minds with the most creative and innovative marketing programs to attract new horseplayers, new fans and market the hell out of the sport. Shoot, if this was my company I would be doing it.”

And that begs another question: Whose company is it? Who will take the lead here? Which organization will dissolve or be willing to merge with someone else. Which alphabet soup executive will focus more time on doing what’s right for the greater good of the industry instead of fighting to maintain whatever small chunk of turf he controls? Many of these executives are bright people, but the absence of a common-sense structure and industry-wide collaboration is a lethal combination.

There are too many chefs cooking our alphabet soup, and no one is buying it.

Copyright © 2010, The Paulick Report

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By Ray Paulick
The good news at the Ocala Breeders’ Sales company’s February select sale of 2-year-olds in training is that Thoroughbred racing continues to hold a fascination with people who have worked hard, enjoyed a certain measure of success, and want to live out a longtime dream to have their own racing stable.

That was the case with Chuck and Maribeth Sandford, who stepped up in a big way with their first auction purchase, a $475,000 colt by Tiznow who topped the one-day OBS sale in Ocala on Tuesday. The Sandfords come from Marengo, Ill., a small farming community in the northern Illinois cornbelt; they built a business from scratch that has been highly successful (click here to learn about their business), and in the last year have made the transition from horse racing fans to owners.

That’s welcome news for anyone in the Thoroughbred trade, especially at a time when many existing owners are cutting back on their stables. There has always been turnover in the ranks of owners, or among buyers at public auction, but for the industry’s future health it has to continue to have a magnetic appeal that attracts individuals like Chuck and Maribeth Sandford who have a dream.

How much turnover in buyers was there at this year’s one-day sale? In 2009, there were 19 individual buyers who spent $150,000 or more at the OBS February auction. Of those 19, only two spent at that level in 2010, and both made considerable cutbacks—West Point Thoroughbreds, through agent Buzz Chace going from six purchases for $1,260,000 in 2009 to three for $340,000 in 2010; and Dogwood Stables, going from five for $545,000 in 2009 to five for $355,000 in 2010.

Last year’s second-leading buyer behind West Point was Westrock Stable, which spent $595,000 for four horses. Westrock was not listed as a buyer this year. A number of other buyers who bought at least one horse in 2009 were not among 2010 buyers, including Coolmore associate Demi O’Byrne, Sheikh Mohammed’s chief bloodstock adviser John Ferguson, the Sanan family’s Padua Stables, and trainers Ken McPeek and Gary Contessa.

Fortunately, in the absence of so many 2009 buyers, there were purchases totaling $150,000 or more from 11 entities in 2010  that were not among the leading buyers last year, including Amy Tarrant’s Hardacre Farm, the sale’s leading buyer with two purchases for $675,000; the Sandfords, second leading buyer with their one purchase; California-based agent Hubert Guy, third-leading buyers with four purchases for $465,000; Let’s Go Stable, fourth-leading buyer with one purchase for $400,000; and the Steinbrenner family’s Kinsman Farm, seventh-leading buyer with two purchases for $300,000.

A boutique sale with only 160 horses catalogued cannot be used as a reliable barometer for the health of the Thoroughbred marketplace. But the results of Tuesday’s sale followed the forecast of Leprechaun Racing’s Mike Mulligan, a major pinhooker who also serves as president of the National Association of Two-Year-Old Consignors. Mulligan told the Paulick Report last week that buyers in past years who might spend $60,000 to $80,000 apiece for eight or nine horses at a 2-year-old sale are more likely now to cut back on the number purchased but focus more on higher quality, thus spending more per horse. That’s why this year’s sale saw a much steeper decline in the median price, dropping 25.6% from $90,000 to $66,000, than in the average price, which fell by 8.2%, from $106,115 to $97,182 (click here for the full results). And with more people focusing on the high-end horses and creating more competition at that level, there are going to be shoppers who were turned away without getting what they wanted. That may bode well for consignors who have the goods in upcoming auctions.

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Beginning shortly after 2 p.m. (Eastern), Ray Paulick will be live blogging the Breeders’ Cup teleconference where the organization’s new long-term strategic plan will be outlined by Cup president, Greg Avioli; Satish Sanan, a member of the board of Directors and chairman of the Strategic Planning Committee; and William Field of Value Partners, the international consulting firm that developed the plan in conjunction with the committee.

Nominators to the Breeders’ Cup program will be allowed to ask questions about the plan, as will members of the media.

2:05 p.m. … Greg Avioli, Breeders’ Cup president, says the Breeders’ Cup "has experienced tremendous change in just the past three years" after few changes in the first 20 years, then outlines the changes: two days instead of one, higher purses, more races, the Challenge Series, and increased betting handle in a down market. Sanan and the board, he said, decided this was not a time "to rest on our laurels," and then introduced Sanan, who was named chairman of the Strategic Planning Committee last August.

2:08 p.m. … Sanan said racing and the Breeders’ Cup has been "outpromoted by other sports" and said the long-range plan (and he emphasized long range) was developed to help the Breeders’ Cup and the industry grow. "It’s one of the most comprehensive projects undertaken by Breeders’ Cup" and credited management, the board of Members and Trustees and industry stakesholders worldwide for bringing input into the process. He then introduced Field to outline the plan.

2:10 p.m. … Field said the process included four workshops, a detailed survey of the Trustees, a shorter online survey of nominators, interviews with international industry leaders. "What we tried to do here is look at the Breeders’ Cup at a slightly new way." Field said he was struck by the affection people have for the Breeders’ Cup and that it truly is the world championship. "It is something that is recognized by many people around the world as the pinnacle of world racing." That’s not to say there’s not more that can be done to make it better, Field said. "We certainly think there are many markets in the world where racing is facing challenges similar to what you are facing in North America, but there certainly are opportunities." He said there is no other "brand" like the Breeders’ Cup internationally.

"North America is the No. 1 priority, but you have a great international aspect," Field added, citing more participation and increased international handle. 

Field said there is a proposal for a new mission and vision for the Breeders’ Cup. Mission: to support breeders by promoting the growth of the Thoroughbred racing industry through the staging of the Breeders’ Cup competition.  The vision is to be the most prestigious and popular competiton in world racing, reflecting in  the quality of the horses, the  event as well as total wagering. 

A third point Field wanted to make is that the BC has to serve a lot of different groups in the industry. "We think it is very important that the Breeders’ Cup needs to refocus more on the customer" — the horseplayers, casual fans and television viewers. 

Related to that, the Breeders’ Cup "is a great brand name" said Field. Great recognition in sports, though not necessarily with the general public, he added. Streamlining of the brand might help with the general public recognition. Building on the Challenge Series and creating races that will determine which horses will run in the championships, he said was one way. "We would like to see that whole process be reinforced…so we are not just thinking about the event in November."

Strengthening the Challenge Series would promote the brand and help increase betting, he added.

Alongside the Challenge Series, Field said, was an opportunity to build some strong alliances with racetracks across the country. "There is an opportunity to work (with the tracks) as partners," he said, citing the fact that racetracks are looking for ways to increase their business.

"We would love to draw some of the major tracks into long-term partnerships," something he said is much more difficult if done on a short-term basis.

The road to the Breeders’ Cup (Challenge Series) and the championship itself has to be promoted as one brand, Field added. "We need to reach out through partners if we are going to reach the customer."

Avioli said the recommendations delivered to the board have been given to management to take to racetracks and come back to the board by the end of the year with an "actual working document" that will explain exactly how the Challenge Series will look.

2:25 p.m. … Sanan reiterated that it will be a long-term plan and that once management reports back to the board there will be more details to be made public: He then repeated the four key points of the plan:

1) the new mission and vision of the Breeders’ Cup 

2) unified and enhanced BC competition to run throughout hte season

3) improve and build long-term strategic relationships with racetracks to put together a framework for long-term relationships

4) redefining our customers and putting our customers at the heart of everything so that we have an unyielding focus on the customers.

2:30 p.m. … The teleconference is open to questions. First, Bill Landes asks why only 80% of Members and Trustees responded to the surveys and asked who the 20% were that did not fill out the surveys. He added that he wants more disclosure from the Breeders’ Cup on meeting attendance and other issues that are not shared with nominators or the public. In response, Avioli began by explaining who the boards are and that 100% of the board of directors responded to the survey. Landes wasn’t happy with that, saying there are still 10 Members and Trustees who didn’t reply to the survey and thinks their names should be published.

Avioli said he would begin publishing the list of attendees of future meetings.

2:35 p.m. … Landes was the only nominator with a question. I began the media round with a couple of questions, one on the past programs that might  have been more short-term than long term in strategy, and the other on what will be different now about how the BC and tracks work together. Field said he preferred not to focus on the past, although he had studied the various programs (special stakes, stakes supplements, challenge series, etc.). 

On the second question, Avioli said that one of the recommendations from Value Partners is to try more of a collaborative approach. "In the past, they’ve said,  ’Here’s our series, would you  like to participate?" Avioli said. "The mindset is going to be different. we’re not going to develop something and try to sell it. We want to first identify tracks that want to work with the Breeders’ Cup on a number of levels (including being a host site)," and then work with those tracks to develop the programs. Field said one of the big challenges is fragmentation and that there will "always be and always have been issues and niggles between tracks and Breeders’ Cup, but I was very surprised to hear the enthusiasm the tracks have for the Breeders’ Cup. If we can approach it on the basis that Greg just described, I am certain that a lot of tracks are going to be very keen on this."

Sanan said "In any business, if you are going to be successsful and form long-term relationships, the word partnership means you must be willing to risk long-term risks and rewards…your goals really have to be aligned…I think all of the conflicts you hear about really will go away, particularly if it is an all encompassing partnership. There is a  big strategic difference in how we have done it and how we plan to do it in the future."

2:40 p.m. … A question about the budget and the current year operating deficit. Sanan said he hopes the long-term plan will reduce the heavy reliance on nominators, that increased wagering and sponsorships are part of the plan moving forward. 

2:45 p.m. … There is a question about holding the Breeders’ Cup overseas. Field said there were a number of suggestions that the BC consider being held internationally. "We wouldn’t absolutely rule it out forever but we don’t think it is the desirable thing to do." Field said there were a number of suggestions in the plan about the rotation. There isn’t any urgency to doing anything other than North American tracks, he said, "though you never say never. …. It’s not part of the plan we propose." Sanan said it was discussed and debated but felt the consensus was that it needed to be perfected at home first before looking overseas. "Take it slowly, perfect it North America…and maybe we will revisit it a few years from now. If it makes good business sense perhaps we would undertake it."

2:50 p.m. …. Another question from a nominator: What will BC do to encourage new nominators and get old nominators to return? Does the BC only want the "heavy hitters?" Avioli said the BC wants as many nominators as possible and cites the current stakes supplement  program as a reason for their participation….he said the strategic plan includes the continuation of stakes races but that there will be more of an emphasis on quality in the future. "I don’t think you will see any decrease in the amount of money the Breeders’ Cup puts out there for nominators. I think there will be an increase in the money for nominators," said Avioli.

2:52 p.m. … Will future  championship purses be decreased, Avioli is asked. He said the plan did not take a position on that. "What we’re trying to say is we don’t know what the appropriate level the championship purses will be until we have a better idea of what the entire program will entail." Sanan said Avioli wasn’t the question, but that the answer won’t be known until the strategic plan develops into an implementation plan and financial plan. "When we have that,, that’s the only point at which we can make a decision: do we increase or do we decrease." Avioli and Sanan confirmed that there will be no change in 2009 championship purses.

2:55 p.m. … Are there any more specific recommendations you can detail at this time, one media rep asks? "Regrettably, the answer is probably ‘no,’" said Avioli, "because what we’ve been given is a very high-level strategic plan." There are broad concepts but no specifics. "They don’t exist right now," said Avioli, who said he hopes to have details in December.

3:00 p.m. … Will the Breeders’ Cup consider reducing the number of races or drop back to one day? Field said "the issue of how many races is a tactical issue and not one we focused on as part of the long-term strategic plan. We didn’t want to be distracted by issues such as that. The important thing that the event in November is regarded as the event (horse owners) want to bring their horses to."  Avioli said it will be hard to get the general sporting public to focus on 14 different divisions. "It doesn’t mean you wouldn’t have a full complement of races on championship day but that you wouldn’t focus"  on all of the divisions on the series throughout the year. Sanan said: "It’s largely going to depend upon when we start the series, how many tracks and how many days. … It may just be limited to what we used to have." Avioli said: "To clarify, the concern is how do we lead into 14 different races, 14 different divisions." He said there will not be a series focusing on 14 different divisions leading up to the championships.

3:05 p.m. … The participants are asked how the Breeders’ Cup plans to bring horseplayers and customers into the process. Avioli mentioned that there have been panels with large bettors or "whales" that have been consulted with, and Field said focus groups have been conducted and will continue. "We also have the benefit of a large bettor who leads this committee," Avioli said of Sanan, who is known as a big gambler. Sanan said Breeders’ Cup has not done a good job taking care of horseplayers in the past but said he is recommending between now and the end of the  year when the plan is finalized that a workshop with handicappers/horseplayers be included to get their feedback.

3:15  p.m. … Final comments from the participants. "What I’d like to leave you with is that we are just beginning the process," said Avioli. "We know the challenge we are facing here. We are cognizant of the various attempts to organize alliances in the past. We are confident we are going to come up with something that is well received."

Sanan said the Breeders’ Cup had a choice to be defensive or be "bold and creative and innovative and help management develop a long-term strategic plan  …. to look into our crystal ball and see what’s going to happen five years from now and capitalize on that."

Field emphasized that this plan was not written by "just a group of consultants,", that industry stakeholders played a big role.

3:15 p.m. … That’s it from the Breeders’ Cup teleconference. It will be interesting to see how this plan unfolds in the next six months, what tracks will be brought onboard as partners, how the stakes supplements and Win and You’re In Series is altered or consolidated, and whether or not the strategic plan, which obviously will be an ambitious effort to create a meaningful series of races, will have an impact on the structure of the year-end championships.

My own comment: From the standpoint of someone who has been following the Breeders’ Cup closely for many years, I think this approach is the most significant and it is hoped the most effective strategic process the Breeders’ Cup has undertaken since its inception. There have been many programs introduced, given a short-term chance to make a difference, and then modified or allowed to linger without any meaning or impact. If the Breeders’ Cup commits to the strategic plan, develops an implementation and financial plan along with significant track partners, this could be a significant boost for the Breeders’ Cup and the sport of racing and business of breeding. I congratulate those who brought the plan to this stage and encourage management and racetracks throughout the country to find a way to make this work.

If it fails to do so, the long-term strategic plan for the Breeders’ Cup will join the scrap heap of so many other well-intentioned efforts of the past, from such things as the American Championship Racing Series, the national office of the Thoroughbred Racing Associations, the creation of a "league office" at the National Thoroubhred Racing Association, the merger of the NTRA and Breeders’ Cup, and the Thoroughbred Championship Tour, among others

Let’s hope for the former. The Breeders’ Cup and racing needs something horseplayers, casual fans and industry stakeholders can understand, support and participate in.–Ray Paulick

Copyright © 2009, The Paulick Report

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By Ray Paulick
The 25 candidates for the 13 open positions on the Breeders’ Cup Board of Members and Trustees were asked by the Paulick Report last week to respond to six questions about themselves, their priorities and recommendations for the organization, and their thoughts on Breeders’ Cup governance issues.

Click here to read or print out a PDF document with all the responses (UPDATED JUNE 3), which are listed alphabetically.

Additionally, click here to access the biographies supplied to the Breeders’ Cup by each of the candidates. Nominators who have not received a customer number and passcode with voting instructions should e-mail the Breeders’ Cup nominations department or call (859) 514-9423.