Posts Tagged ‘triple crown challenge’

By Ray Paulick
One or two million dollars just doesn’t get you what it used to.

Was it that long ago that felonious financier Robert Brennan shook up racing’s Triple Crown with a $2-million bonus linking victories in three stakes at the now-defunct Garden State Park in New Jersey with a win in the Kentucky Derby? Spend a Buck went after and won that bonus following his runaway victory in the 1985 Kentucky Derby, leaving  officials at the three Triple Crown tracks apoplectic when he skipped the Preakness and Belmont Stakes. They were so worried they went out and did the unthinkable: working together to create their own bonus scheme (which has now lapsed after Visa dropped its Triple Crown sponsorship).

The original Triple Crown Challenge bonus would pay a total of $5 million in purses and bonus money to any horse that won the Triple Crown (it was upped to a $5-million bonus plus purse money in 1997), and a $1-million bonus to the horse accumulating the most points from top three finishes in all three races. The latter bonus was dropped after the 1993 Triple Crown.

The absence of a bonus hasn’t hurt the Triple Crown, although without a participation bonus there have been fewer 3-year-olds running in all three races. I guess the feeling is that the owner of a horse that wins the Triple Crown will get his bonus when he retires him to stud (assuming he’s not a gelding or filly).

This past year, several entities clamored to get 3-year-old filly superstar Rachel Alexandra and older female champ Zenyatta in the same race. Jim McIngvale, the Houston furniture store owner better known as Mattress Mac, made the first run by offering to put up $2-million for a match race at Sam Houston Race Park in his home town. That gave McIngvale 15 minutes or so of free publicity, but it was a match race that was never going to happen. (McIngvale’s Gallery Furniture recently announced it is sponsoring a new $100,000 race on the Texas Day Champions program Dec. 5 at Sam Houston, proving he’s more than a publicity seeker. McIngvale and the Houston track haven’t given up on a race involving the two fillies, either, and offered $1.5 million if they showed up to face one another during the track’s winter meeting.)

TVG then teamed up with the New York Racing Association in an effort to get Rachel Alexandra and Zenyatta to both contest the Oct. 3 Beldame at Belmont Park. TVG offered to put up $400,000, which would increase the purse for the Grade 1 race to $1 million. That at least got some consideration from both camps, but it wasn’t in the cards for either Rachel Alexandra or Zenyatta.

Finally, the Breeders’ Cup gave it the old college try, offering to pad the winner’s share of the $5-million Breeders’ Cup Classic if both Rachel Alexandra and Zenyatta were in the starting gate. That would have resulted in a $3.7-million winner’s share of the Classic. But Rachel’s majority owner, Jess Jackson, had already made it clear he wouldn’t run his filly on the synthetic track at Santa Anita which he disparagingly calls “plastic.”

It’s no wonder, then, that the Japan Racing Association is having a hard time getting much buzz over its Autumn International series of four Grade 1 races on consecutive Sundays, beginning Nov. 15 with the Queen Elizabeth II Commemorative Cup, and continuing with the Nov. 22 Mile Championship, the Nov. 29 Japan Cup and Dec. 6 Japan Cup Dirt. The four races offer about $13 million in total purses, plus lucrative bonuses for horses that have won or finished second in major stakes in North America, Europe, Australia or Dubai.

For example, if Kentucky Derby winner Mine That Bird won the Japan Cup Dirt, a 1 1/8-mile race run clockwise at Hanshin racecourse in Osaka, he would receive $1.37 million of the $2.9-million purse but also get a bonus of $1.37 million for his Derby win, making the victory worth a total $2.7 million. That’s about the same as the Breeders’ Cup Classic’s winner’s  share of its $5-million purse. I’d venture to say Mine That Bird would face a much softer field in Japan than he’ll see on the Pro-Ride track at Santa Anita. Of course, he could run in both races.

The Derby is but one of 12 American races whose winners would qualify for a bonus ranging from $525,000 to $1.37 million for winning the Japan Cup Dirt. Even a second-place finish for those horses in Japan would pay them a bonus between $210,000 and $550,000. Click here to see the bonus scheme for the Japan Cup Dirt.

The Japan Cup on turf has similar bonuses. That race winner could take home more than $4 million in purse money and bonuses and the second-place finisher could win as much as $1.6 million in purse and bonus money. Click here for complete information on the Japan Cup’s purse and bonus details.

Nevertheless, based on recent interest in the Japanese races from American horsemen, it’s doubtful many serious contenders will be shipped to Tokyo or Osaka to contest these rich races, bonuses or not. No American horse has won the Japan Cup since 1991, when the late Charlie Whittingham sent Golden Pheasant postward for a victory. Golden Pheasant was the fourth American horse to win the Japan Cup in the race’s first 11 years.

In recent years, the Japanese have dominated the race with horses they bred or bought in the West as yearlings, winning nine of the last 11 runnings. The quality of Japanese-bred horses has improved, largely through the importation of stallions and broodmares from Europe and the United States in the 1980s and ‘90s. I think Americans have gotten tired of sending their horses over to Japan and getting their butts kicked.

The Japan Cup dirt, inaugurated in 2000, has had just nine runnings, with eight going to Japanese-trained horses. The lone exception was in 2003 when the Doug O’Neill-trained Fleetstreet Dancer, a previously unheralded runner in California, posted a huge upset.

American horsemen have been leery of sending good horses to the Japan Cup dirt, in part over legitimate concerns that the dirt tracks in Japan are deep and sandy. In fact, when Fleetstreet Dancer won, it may have been due in part to the fact rain tightened up the racetrack.

There’s a lot of money at stake in the Japan Racing Association’s Autumn International races, but purse money apparently doesn’t carry as much weight as it used to for some horse owners. Either that, or American horses ain’t what they used to be.

Copyright © 2009, The Paulick Report

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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
The 2009 Triple Crown marks the fourth consecutive year the sport’s three premier races – the Kentucky Derby, Preakness and Belmont — will be run without the benefit of a title sponsor, and the Breeders’ Cup championships will be without some of their longtime corporate partners when it is held for the 26^th time later this year. Wagering on Thoroughbred racing is at its lowest level in more than a decade, and the bankruptcy of major racetrack owner Magna Entertainment has put the sport in peril in some areas.

The good news? At least we’re not alone.

The gambling industry is suffering through some very difficult times now, thanks to the international economic crisis. One victim is the “Folies Bergere,” the longest-running show in gambling mecca Las Vegas, which will have its final curtain call on Saturday after nearly 50 years at the Tropicana Hotel. Spending on travel and tourism dropped in 2008, and this year figures to be worse. The gambling industry used to be considered recession-proof, but not any longer. Las Vegas gambling revenues dropped 16% in January, and conventions and groups are cancelling in droves.

Crushing losses in the corporate world – particularly in the automotive and finance sectors – have also had an immediate impact on professional and amateur sports. Sponsorships have been lost, teams in many leagues are struggling to fill seats, and luxury suites are increasingly sitting empty at different venues. The New York Times reported that the National Basketball Association has cut 10% of its staff, NASCAR teams have laid off hundreds of workers, ESPN has decided not to fill 200 job vacancies, and the LPGA has eliminated four tournaments after losing title sponsors. Even the mighty National Football League is feeling the effect: its commissioner has taken a 20% reduction in salary.

Two of the worst-hit industries, automakers and financial institutions, have traditionally been major participants in sports sponsorships, in large part because of the hospitality and entertainment options they provide their customers and employees. Chrysler was the original sponsor of the Triple Crown Challenge from 1986-95, and Dodge sponsored the Breeders’ Cup Classic for five years, beginning in 2003. The credit card company VISA took over from Chrysler as Triple Crown sponsor in 1996. When its contract expired, it continued as a marketing partner of the Kentucky Derby, a deal that ends next year.

But pity the PGA Tour, where fully 40% of its tournaments are hooked to the financial and auto industries. Government officials are insisting on cutbacks in spending by financial and auto companies that have received federal bailout money. Chrysler, the longtime sponsor of the Bob Hope Desert Classic, was missing in action when the tournament was held earlier this year. The Northern Trust bank was raked over the coals by Congressman Barney Frank and others after its executives partied to the music of Sheryl Crow and entertained clients and employees at the PGA Tour’s Los Angeles tournament that it sponsors. Buick, a brand in the nearly bankrupt General Motors, dropped its endorsement agreement with Tiger Woods.

The NBA and NHL are struggling like never before as corporations cut back on promotional and entertainment budgets, and families reduce their discretionary spending. The NBA has issues unrelated to the economy, namely a labor contract that many think will lead to a lockout by owners in 2011, but the question many sports observers are asking is how many teams will be forced to be sold, move or seek financial help from the league before then, simply because they are losing money (the New York Times reports that 15 NBA teams are operating in the red). The future of a number of NHL franchises is also in jeopardy as teams cut ticket prices and offer package deals to fill seats. Many corporations are either not renewing luxury suite rentals or cutting their losses by letting them sit empty rather than add mandatory food and beverage expenses each time they are used.

Most Major League Baseball teams are maintaining their ticket prices at 2008 levels, something Churchill Downs did with a majority of its seats for the 2009 Kentucky Oaks and Derby. The Breeders’ Cup, which significantly increased ticket prices to the 2008 two-day championships (and, like Churchill Downs does for the Oaks and Derby, required buyers to purchase tickets for both days), acknowledged the increases were a mistake. It hasn’t announced its pricing structure for the 2009 Breeders’ Cup, but many people will be disappointed if there isn’t a serious rollback.

Sponsors are more difficult than ever to find. When VISA dropped its Triple Crown sponsorship, Ed Seigenfeld, executive director of Triple Crown Productions, said, “We’re not going to let the grass grow under our feet” in the search for a replacement. That was in 2005, when business was booming. What are the odds of getting a Triple Crown title sponsor in the current climate, one that promotes the series the way VISA did?

Carter Carnegie, the senior vice president of sales for Breeders’ Cup, acknowledged the difficulty of replacing companies like Dodge and Bessemer Trust (the latter is controlled by the Phipps family, which has been involved in horse racing and breeding for generations). “Like NASCAR, the PGA Tour, NHL and MLB, horse racing also faces a challenging time for retaining and attracting sponsors,” he said. Carnegie said the “silver lining” for horse racing, compared with other sports, is that “corporate partnerships do not play as significant a role in terms of being a core revenue generator needed to maintain the day to day operation of the game.”

The Breeders’ Cup has some long-term deals in place and some new prospects in the pipeline, Carnegie said. “I think it helps that our price tag is much less than other sports, and over the last few years, we have been able to make a compelling case that we deliver a certain demographic that is hard to reach through traditional forms of media.”

Still, he acknowledged that some of the existing sponsors are struggling. “We have worked with some of our partners during these challenging times on ways to reduce or restructure their terms and fees and, in some cases, have looked at extracting more value for them by developing some new ways to increase their exposure.”

One company I’m guessing won’t be back is the insurance giant American International Group, better known as AIG, which partnered with the Breeders’ Cup in 2007 and 2008, sponsoring a “ride of the day” feature during the ESPN and ABC telecasts. AIG, of course, was on the cutting edge of the financial meltdown and in the news recently for wasteful executive bonuses after getting bailed out by taxpayers.

Breeders’ Cup is in the middle of a long-term strategic planning process that we’ll be telling you more about in the coming weeks. This work couldn’t come at a better time, because the organization is widely acknowledged as one of the few bright spots on the racing landscape over the last quarter century. With so much bad news throughout the industry, it’s critically important for the Breeders’ Cup to weather this economic storm and emerge as a beacon of hope for the entire sport.

Copyright © 2009, The Paulick Report

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