Posts Tagged ‘tokyo’

Ray Paulick: Bill, can you briefly describe your responsibilities at the Hong Kong Jockey Club?
Bill Nader: As executive director, I oversee all racing operations, and that extends to the laboratories, veterinarians, farriers, grooms, work riders, handicappers, racing stewards, racing registry, marketing, public affairs and also the international races. It’s a big operation. There are about 1,800 people reporting directly or indirectly to me, and we have tremendous people in the key positions from all over the world, from Hong Kong, Great Britain, Australia and New Zealand.

What’s the best part of your job?
The popularity of the sport makes it contagious and gives you a reason to want to get up every day. There’s never a dull day. It’s the major sport in Hong Kong. There are single events that may be bigger, but in terms of something sustainable over the course of the year racing is the only game in town. One example: circulation of a daily newspaper increases by 30% on a race day.

Your biggest challenge?
The ability for us to grow. It’s one thing to get where we are and sustain our position, but to take it to the next level. We think we can do that, but we need government support. We have 78 race meetings and we have to guarantee HK$8 billion (about US$1 billion) in revenue to the government. My two years have been lucky, we’ve been up in turnover. We’ve been able to grow from HK$60 billion in handle to HK$68 billion last year. Tax rate effectively is 73% of gross margin, before we pay prize money or overhead. We can only simulcast 10 single races per season and want to expand that but have been unsuccessful so far. There’s limited stabling and no breeding industry, so no room to expand. We have an active population of just over 1,100 horses. To get through 735 races, 90% of the races on turf, with those horses, it’s a challenging process.

What is the major difference between working at NYRA and working for the Hong Kong Jockey Club?
Resources. Not just money but the depth of personnel at top levels all the way down. The Hong Kong Jockey Club is arguably the most professionally run racing organization in the world. It’s a finely tuned machine. Its can-do spirit is really evident day by day taking tough assignments and meeting the challenge, whether it’s working on the Olympic Games or the international races. The work ethic here, too, is amazing. Our employees work 11 or 12 hour days and won’t go home until they feel their job is done.

What do you miss the most about the U.S.?
I miss a lot. Italian restaurants, sports, Broadway shows. There are no major league sports here. Overall there’s a lot of good things about Hong Kong, so it’s a trade-off.

What do you know today you didn’t know before you came to Hong Kong?
It’s been amazing. It opens your eyes to come and see racing presented in a different system. The whole approach is different. You learn by just opening your eyes. I learned early on not to jump to any conclusions and get a feel for the methodology that’s employed in this part of the world. A lot of things done here we can’t duplicate back in America.

To hear Carl Pascarella tell it, you’d think corporate marketers would have lined up from Louisville, Ky., all the way to New York’s Madison Avenue to bid on the Triple Crown sponsorship that Visa USA dropped in 1995 after a 10-year run. The relationship between the Triple Crown and Visa ended the same year Pascarella retired as the credit card giant’s chief executive officer.

Pascarella, speaking at a Tuesday afternoon session on Marketing & the Customer Experience at the 32^nd Asian Racing Conference in Tokyo, used the familiar introduction from ABC’s “Wide World of Sports” to describe sponsorship of American racing’s highest-profile series, which begins with the Kentucky Derby on the first Saturday in May, continues two weeks later in the Preakness, and concludes three weeks after that with the Belmont Stakes.

On the other hand, he said, there is “the agony of defeat. In six of eight years we had horses that won the first two legs and didn’t win the Belmont.” That defeat eliminated the possibility of further promotions congratulating the winner of the Visa Triple Crown Challenge and the accompanying $5-million bonus, as well as any additional races the winner might compete in, including the Travers Stakes or Breeders’ Cup.

The Triple Crown was one of several world-class sponsorships for Visa in the sports and entertainment world. “Each one of them,” Pascarella said, “had a common focus on a couple of very important things: understanding who their fan and audience was; and secondly, they understood how to drive value to that fan base. They had an unwavering commitment to both things. At Visa, we looked more to sports as being the pinnacle of entertainment for fans, or our customers. No other form of entertainment brings the same kind of excitement or elation as sports does.

“The sports that are best for our sponsorship,” Pascarella continued, “put the fan in the center of the activity. They create deeper relationships because it’s a fan-centric approach. They give the fan a way to get into the event itself.”
 
Pascarella recalled how much value he was able to give to Visa’s best customers — bankers and merchants — who would come to Louisville for the Kentucky Derby. “We’d bring them on a backside tour of Churchill Downs on the day before the Derby,” he said. “They’d see the horses who would be racing in the Derby the next day, meet trainers like Bobby Baffert and D. Wayne Lukas, and these people felt like they were part of it all. We were giving them something special because of a sponsorship that was invaluable. That’s what we were paying for, that extra feeling that allowed our customers to get inside the sport.

“We’re not looking at fan numbers, we are looking at fans who are engaged, fans who will be engaged with us and our products and services,” Pascarella said. “We look at selecting and evaluating sponsorships based on being able to drive consumer behavior. How have we lifted the brand, how have we changed behavior, how have we made the consumer closer to us as a result of the association? The more we win, the more we put into a sponsorship. But it’s not just about the money. It’s about the relationships you can build with your sponsor and what you can give your sponsor in return. You need mutually beneficial objectives.”

Interestingly, while Visa dropped its sponsorship of the Triple Crown, it entered into a five-year agreement with Churchill Downs to sponsor the Kentucky Derby. No company has stepped forward to sponsor the Triple Crown since Visa’s exit from the series. One reason may have been a decision by the New York Racing Association to end its association with NBC Sports, and put the Belmont on ABC/ESPN. Another may have been fragmentation within the three tracks that comprise Triple Crown Productions and a power struggle over how sponsorship revenues were divided. Currently, of course, they have nothing to divide from a Triple Crown title sponsor.

 Pascarella, now an executive adviser to TPG Capital, also cautioned racing associations that the current economic climate will cause nearly every major corporation to reevaluate its advertising, marketing and sponsorship budgets. “Every economist projects a very deep and long recession,” he said. “That means your sponsors are going to be under a great deal of pressure. You need to reach out to them, even though your revenues also are going to be under pressure. If you reach out to them, and say, ‘How do we work together to get through this?’ that will go a long way.”

BRANDING GURU DAVID AAKER , professor emeritus of marketing strategy at the Haas School of Business at the University of California-Berkeley, talked about how racing can build its brand.

At a time when brand trustworthiness and quality perceptions of most brands are down significantly in the minds of the public, Aaker said there are opportunities to improve branding through increased energy. He cited the Nintendo video game brand as one recent phenomenon in the branding world. Five years ago, Aker said, Nintendo ranked 165^th among brand names in Japan, moved up to 65^th three y ears ago, fifth two years ago, and now ranks as the country’s leading brand, thanks to the energy created by the Nintendo Wii platform and games.

He cited five other very diverse brands that have energized themselves in recent years: 1) the Memphis Redbirds minor league baseball team; 2) the Indianapolis Motor Speedway; 3) PGA Tour golf; 4) Harley Davidson; and 5) Avon cosmetics.

All of those brands used one of two methods: energizing the business itself, or finding something with energy that is interesting and involving and attach it to the brand. “Both options are really powerful,” Aaker said.

The Memphis Redbirds, Indianapolis Speedway and Harley Davidson energized their brand by engaging their customers in multiple activities that built on the customer experience. The PGA Tour and Avon tied themselves to something with energy. The PGA Tour used Tiger Woods to its best advantage, and Avon linked its products to a breast cancer crusade and created the Avon Walk for Breast Cancer, with millions of people engaged each year. Similarly, Aaker said, Lowe’s home improvement stores attach their brand to Habitat for Humanity. In the case of Avon, he said, “Breast cancer is so important an issue and involving to the target audience that it provides Avon a way to get energy that it could never do through their products and services.”

In addition, he said, self-reflection is necessary. “What about the customer experience is boring or unpleasant? How can you mitigate that? What can be added to en rich and improve the customer experience.”

“You have one of the most exciting events in sports and entertainment,” Aaker said. “But you need to ask yourself, ‘How can I add energy to my brand?’”

TELEVISION ADVERTISEMENTS PROMOTING RACING around the world were shown to the group and  audience members were asked to vote on their favorites. The ads were divided into five categories: Celebrating the Horse; Sex and Glamour; The Punt; A Good Laugh; and The Buzz.Most provocative were ads from Australia promoting sex and glamour. Other countries featured included France, Turkey, Japan, Hong Kong, Germany, Ireland and the United States (two ads from Santa Anita were featured). Details tomorrow on the winning ad.

The challenges that confront racing seem to be the sport’s universal language, and potential solutions, it seems, are similar from one continent to another. Winfried Englebrecht-Bresges, CEO of the Hong Kong Jockey Club and chairman of the Asian Racing Federation, outlined those challenges and proposed some solutions during his opening address of the 32^nd Asian Racing Conference in Tokyo on Tuesday morning.

Among the hurdles are laws in some countries, most notably Hong Kong and Japan, that prohibit or restrict commingled betting; double taxation on commingled bets; marketing and sponsorship issues; TV and data rights questions, and software challenges among tote companies that will require investment and commitment by the various stakeholders. “We will struggle if we won’t change,” he said.

Englebrecht-Bresges outlined what he called “three guiding principles” to address the challenges. Racing must exert influence on the regulatory side, he said, because “the integrity of the sport is a fundamental issue. Drugs will bring the sport to its knees if we don’t proactively fight this problem.” He referenced cycling and how the burden of doping could cost the sport dearly in lost television rights if not addressed.

Secondly, Englebrecht-Bresges said, the industry must facilitate the sharing of best practices in racing and in other outside industries by bringing together stakeholders who have common interests.

Finally, he said, bigger organizations must mentor smaller organizations, especially those countries who are in the early stages of expanding their racing and/or breeding industries.

While some countries are in that early stage, Englebrecht-Bresges said, overall there is stagnancy for the Asian Racing Federation members, with six-year projections that show pari-mutuel wagering turnover declining while other forms of gambling enjoy moderate growth. “We will be a dinosaur,” he said, adding, “it’s not that we are unattractive. But we have to offer different value propositions.”

Not surprisingly, those value propositions are predicated on knowing what customers want, especially new customers that racing needs if it is to survive. He called for all jurisdictions to conduct strategic assessments, and outlined some of the findings the Hong Kong Jockey Club discovered in its own research. Non-racing fans see no relevance in the current racing schedule/fixtures, programs and bet types; much of the activities are not appealing to young people, women, families, and the middle class. Racing lacks innovation, and has a poor approach to its “channel strategy” and customer loyalty programs. Furthermore, he said, industry fragmentation is a key reason for slow response to the challenges.

Regarding channel strategy, Englebrecht-Bresges said racing is “catering to its current customers” through its web sites, where new customers “get lost. We need an integrated channel strategy” that will appeal to existing, new and potential customers, he added.

Englebrecht-Bresges said racing must reach the next generation, but that the strategy of attack must be powered by customers, especially the new customers with which the industry must learn how to better communicate.

“We are in a race,” said the German native who has been with the Hong Kong Jockey Club for 10 years. “Is it a race we can win?” 

Englebrecht-Bresges then showed a slide of America’s new president-elect, Barack Obama, featuring the campaign theme of change that stated “Yes, we can.”

“I say," Englebrecht-Bresges concluded, "‘Yes, we must.’"

THE REST OF TUESDAY MORNING’S conference program was baffling. Following Engelbrecht-Bresges was Hiroshi Okuda, who rose through the ranks of the Toyota Motor Corporation to become president and later chairman and is now chairman of the board of governors for the Japan Racing Association.

It’s possible Okuda brought the wrong speech to the Asian Racing Conference, for he devoted his entire talk to "global warming issues." I guess if we all rode horses instead of automobiles, we could help develop a low carbon society, as Okuda said is necessary. But I’m not sure what major impact racing executives could have on global warming.

If that talk didn’t cause the conference focus to jump the tracks, the next two certainly did. Robyn Williams (no, not that one), described as a "mad cap science presenter" from Australia, enlightened (?) the audience about how the world will be changing due to technology. You know, robotics, energy and transportation. Hell, I learned that from watching too many episodes of "The Jetsons" as a kid. In truth, Williams was at least entertaining, and would have made a good lunch-time speaker. But he added little to the serious issues at hand among the Asian Racing Federation delegates.

Andrew Main, the morning’s final speaker, likewise, had little to say linking racing to his area of expertise as business editor of The Australian newspaper.

Filling the opening morning with three speakers who had little relevance to racing left many in the audience scratching their heads and wondering who thought this was a good idea.

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