Protecting Uncle Mo

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Our 2-year-old champion colt, Uncle Mo, is in good hands. His trainer, Todd Pletcher, is one of the best. His owner, Mike Repole, is a successful businessman committed to the sport.
 
In marketing terms, Uncle Mo is a brand. Based upon the success his owner Mike Repole had with Vitaminwater, few people know better how to develop, promote and protect a brand.
 
But it is hard to protect the brand that is Uncle Mo in Thoroughbred racing.



In the real world if Mike Repole’s former brand, Vitaminwater, was on the shelf of a grocery store and the store owner said to him, “I will not pay you based upon the sales of your brand, instead I’m going to pool the sales of all drinks and pay that money out later as I see fit.”
 
If that had happened, Repole might have said, “Pay me for the sales of my brand, or you won’t get my brand”.
 
That seems reasonable. If the store knows the amount of Vitaminwater sold, why not pay Repole for the sales it generated? Actually, they did know and they did pay him for the revenue his brand generated. That’s how the real world works.
 
It is hard to protect the brand that is Uncle Mo in Thoroughbred racing.
 
Although host tracks know how much money a race generates in minutes, the talent in the race is not paid their share of that revenue. Instead the money goes into a purse account pool, for other racehorse owners, in other races, at some time in the future. That might work in a commune, but not the real world.
 
My business is marketing, where the variables we work with are: product, price, distribution and communications. New technology is impacting these elements to introduce new brands and re-vitalize old brands.
 
The issue of how we compensate our talent has intrigued me for years, as our sport is the only one capable of directly connecting the talent in a sporting event to the wagering revenue generated. Currently there is no connection.
 
I believe new technology in the distribution of racing can give us a real world model for compensating our talent, and change how we package racing products for horseplayers and fans.
 
These changes will allow us to protect Uncle Mo and other brands in racing.
 
Currently, the racing secretary uses the racehorse owners’ purse account to assign set purses for races. If the wagering revenue on a race is greater than the set purse, the extra money goes into the purse account for future races. If the wagering revenue is less than the set purse, the purse account gets reduced.
 
Why not let the owners of the “brands” take the purse risk in each race?
 
Here’s how it can work. The racing secretary puts the race conditions together for a race.  After the race is over and the wagering revenue known, the top finishers split the purse portion. If the race generates a lot of wagering, they split a big purse (and the track operator gets an equal share). If the race was not popular with horseplayers, the top finishers get less.
 
Everything is clean. The talent is paid for the value of their performance. After the race is over, the purse account is zero. Next race.
 
This isn’t about redistributing money in the existing pie. This is about changes needed to grow the revenue pie and the sport.
 
Changing the Incentive
Today, the incentive in racing is to duck competition. With set purse amounts, you can make good money avoiding competition, even in graded stakes.
 
That’s why we have Grade 1 races with five-horse fields. The result is a non-competitive race that few people come out to see and few people wager on it. Such a race might generate less wagering revenue than a $5,000 claiming race with a full field.
 
Racing’s customers and fans are turning their backs on what our sport says are the best races, because the incentive in racing is for owners/trainers to avoid competition. That needs to change.
 
We need the incentive in racing to where owners/trainers enter races with full fields of competitive horses because that is where they are going to win the highest purse money.
 
Think about that. Good racing products for horseplayers and fans would generate good purse money. Bad racing products would lose in the marketplace and stop being presented. That’s the way the real world works.
 
Everybody knows there are too many races being packaged. This is the right basis for thinning the herd.
 
There are many problems in racing. Most are about money and fall under two main categories:  Integrity of the Sport and Integrity of the Wager.

The integrity of the sport is not only impacted when participants cheat in a race. The wink and nod cheating when bad races are written to benefit owners/trainers and those races are presented to the betting public also impact it.
 
What makes a bad/good race? Some would say a race you can easily figure out is a good race, however, most would say just the opposite. The more competitive the race, the better the race for horseplayers and fans.
 
There is something appealing about finding out who has the best horse, football team, etc. It is so appealing that people will bet billions of dollars this weekend. NFL coaches and the talent will hype their game to increase viewership. What would they do if they got a share of the gambling on their game? Exactly.
 
This year the NFL and NBA will try to change the compensation model for the talent in their sports. Why not just keep doing what they have been doing? Obviously, what was working years ago isn’t working for one side today. They will go through the costly process of changing the compensation model, because they believe the changing business makes it necessary.
 
Maybe, just maybe, the system we have been using for compensating our talent in racing has become a problem, a big problem.
 
This year, if things go well, Uncle Mo’s races could have total wagering handle of more than $200 million. With average takeout of 20%, the wagering revenue generated by Uncle Mo’s races, $40 million, will go somewhere else.
 
Of that $40 million, about $10 million (5% of the $200 million wagered) will go to the host tracks where the races are held and be split between track operators and future purses. The remaining $30 million (15% of the total wagered) will go to those simply taking bets on Uncle Mo’s races. Why?
 
Why can’t the top finishers in Uncle Mo’s races receive the $20 million in purses due from wagering on their races? Our stars need to be compensated for the revenue they generate. That’s how the real world works.
 
Racing’s welfare system is not working for those putting on the show, thus it is not working for Uncle Mo, and the other brands in the sport.
 
Racing needs the same distribution model as the Apple brand, where Apple sells customers direct, through bricks and mortar outlets and through on-line vendors. It doesn’t matter where the sale is made, or how the sale is made, the money flows to the Apple brand, not to Google.
 
The first step to getting a new compensation model to protect Uncle Mo and the sport is a new pari-mutuel tote/wagering system.
 
Integrity of the Wager
Currently we have three tote companies that do not seem to work well with each other. They cannot stop “past posting,” where betting continues after the start of the race. Their technology was good when all wagers were on-track, but that was before the avalanche of off-track and Internet wagering.
 
Racing can have a new, central tote/wagering system that allows bettors to wager on every racetrack in real time. It would not only settle accounts with winning bettors and tracks, but also when the results are official, send the purse money to all the winning connections of the race. It addition, it would pay all state taxes immediately. How about that? One system, with all accounts settled in minutes, not weeks and months.
 
This system will return racing to an “on-track” business model where all revenue stays in racing, like Apple. This will infuse hundreds of millions of lost dollars into purses and to host tracks putting on the show. It will continue to allow each state racing commission to set the percentage of takeout and taxes. (If eventually the states agree to a compact agreement and set national rates, that’s a bonus.)
 
This new system would also eliminate the “settlement” issue, where 1,100 off-track outlets scramble to settle with the host event. It eliminates off-track bet takers, such as recently bankrupted NYOTB, from keeping hundreds of millions of dollars in wagers and then not paying the host tracks and purse accounts.
 
But, the main advantage of this new technology is to provide customer friendly services, such as sending a message to every customer with the results of their bets, including a videolink to the races they wagered on with the horses they bet on highlighted. Uncle Mo could be in living color minutes after the race.
 
The question is, “Can the separately owned, three-tote system do for racing what a new central system can deliver?” I think we all know that answer.
 
Technology companies like IBM, or perhaps Google, would be thrilled to show the partners in racing how much money and integrity they could save the sport with a new, state-of-the-art wagering system paid for and upgraded through a percentage of each wager.
 
In the 1990s, Apple introduced a tablet computer named Newton. About the same time, the Jockey Club introduced a plan for a new tote system and both failed. The ideas were not wrong. It just wasn’t the right time.
 
The time is right for Apple’s iPad, because new technology makes a tablet work. The time is right for new technology to deliver a tote/wagering system for racing with many of the capabilities outlined above.
 
During the January Sales at Keeneland, people were pitching the opportunity to invest in new ADWs to game the upside-down, off-track revenue model. One entry price quoted for individuals was $10 million. That means ten individuals might put up $100 million to start new ADWs, when perhaps $100 million is all it would take to start a national tote/wagering system for the whole sport, that would make the current ADWs archaic.
 
Technology waits for no one. We should not lose this opportunity because of who currently owns what. Companies go in and out of business every day because customers move to innovation and to those brands that meet their needs.
 
The owners of the talent, racehorse owners, are equal partners by law with track operators on wagering revenue. They have every right to demand a new, national tote/wagering system to both restore integrity to the wagers and assure the investments in their brands are protected.  
 
With the new central tote/wagering system taking wagers direct from customers and with the compensation of our racing talent based upon the value of their performance, a new energy and incentive will drive the sport.
 
The actress Angelina Jolie does not appear on David Letterman’s show to promote the movies of other actors. She is there to promote her brand and to increase the ticket sales of her movie. That’s the way the world works.
 
If we want racehorse owners, trainers, jockeys and track operators to get involved and promote a race, then give them the money wagered on that race. Don’t expect them to promote a race when all the money goes somewhere else, like it does today.
 
There is great potential for additional sources of revenue to soon be available to racing, i.e. social media, games and services we cannot even imagine now. These new revenue sources are based upon commercial rights to each brand.
 
Are the owners of the brands to simply give their commercial rights to track operators to squander away to the benefit of others, some not even connected to racing? That is what is happening today.
 
Time for Change
Changing the compensation system for talent can restore integrity with real world incentives for packaging our races. By establishing a new tote/wagering system, we can restore integrity to the wager and deliver enhanced customer service. This isn’t about redistributing revenue; it is about the modern methods needed to grow the sport by targeting horseplayers and fans.
 
Richard Duchossois, former owner of Arlington, in a recent speech to the Thoroughbred Club of America called for racing to define a new “Goal Line” and he said that would determine what has to be done to get there.
 
In business management, Strategies precede Structure. Deciding what must be done is more important than who does it.
 
You have just read my analysis and proposals for how to give Thoroughbred racing the fighting chance it does not have today. These are not big changes, but they will have big results.
 
We need racing secretaries to move from writing bad races to attract horses, to once again being valued for their ability to put together competitive races that make money for racehorse owners/trainers/jockeys and track operators. They need to be thinking about horseplayers and fans.
 
That’s how you change the direction of the sport and protect Uncle Mo and all those who will follow him. Once we move in that direction, the other “big Mo” will shift toward Thoroughbred racing.
 
How do we make these changes? One way is to get racehorse owners, like Mike Repole, who understand the value of building and protecting brands in a room and put this analysis and others on the table. That’s when you define the “Goal Line.” Then figuring out how to get there will be easy.
 
Broad concepts in racing’s mix of product, price, distribution and communications will determine how change can be implemented. Once a new wagering platform is in place, new ideas and methods can be tested and perfected at individual tracks, then rolled out nationwide.   
 
The business methods in use today are artificial and upside down, so many of the inherent problems that plague racing now, will go away when we move to new, real world methods.
 
Summary
The ability of a racehorse owner to develop, protect and promote the individual brand name of their horses is severely compromised by the current methods in the sport.
 
In a fast changing world of technology and social media, Thoroughbred racing allows the foundation of brand management, commercial rights, to be taken hostage by track operators, who have squandered and given away those rights for little value. The owner of Uncle Mo has no rights to his races.
 
The compensation and distribution systems in racing are completely upside down. The owners of the horses putting on the show receive no direct benefit for the revenue their talent is generating. Our welfare system has not only failed, it has corrupted the very foundation of who has the best horse.
 
Our sport has exhausted every possible advantage of monopoly and is now declining because we continue to do what has always been done and ignore the basics of operating like a modern sport.
 
We have great opportunity to link current and new customers to the talent in our sport and reach the full potential of legal wagering through technology with increasing capabilities. At the same time, we can start to develop and enjoy fan growth and revenue streams available to all other modern sports.
 
Racehorse owners need to understand the enormous potential of controlling their individual rights to their brands, the talent in the sport, and how those rights can be used collectively to benefit Thoroughbred racing. The owners of the talent in every other sport reached this conclusion years ago and got ahead of us.
 
Exploring new ways to package and present racing based upon giving our present and new customers what they want, instead of what the industry wants to give them, is the answer to success in our sport.
 
The best way to protect a brand is to make it economically viable.
 
The best way to protect Thoroughbred racing is to embrace real world business methods to make the sport economically viable. Then it can take care of itself.
 
The first step is a new, national tote/wagering system. Every other step depends on taking the firststep.
 
© Fred A. Pope 2011

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  • Tiznowbaby

    You still may not be paid for your brand. If everyone bets on your horse, but your horse finishes last, you don’t get paid. It was your horse’s talent that drew everyone to the race, but you get no money. How is that protecting your brand?

  • voice of reason

    Another marketing wanna-be throwing marketing lingo out as if it means something. I like Pope. He’s a straight-forward guy who clearly knows many of the ills of racing.

    But let’s not spend too much time and effort worrying about how the Repoles of the world can “monetize” their greatest assets. They monetize it by going to the Pletchers of the world, and taking every advantage afforded them, and sometimes more (remember steroids were legal only a couple years back?). It’s a dirty sport where those that lean IN take the prize. If you played the game squarely, look around you… because you’re the sucker.

    And what is this “brand” that we are monetizing? Is it Uncle Mo? If so, remember it take money, millions to create a brand of value. Millions more to develop the brand into something the public wants, loves embraces. And that’s not just “starting” the brand (buying a horse). It not paying your monthly bills either, these are part of the game. MAYBE it’s the owners of the better horses that owe the PUBLIC some respect and payback. Horses that become “brands” become viral, they are talked about, they become social, they are forum fodder for thousands. Do we owe those evangelists of the “brand” anything? Let’s not forget, there are certain players and trainers that have worked the game, get rewarded and are the usual suspects. Are we to reward THEM further? Is that what were really discussing here? How to make the game better, more manageable and more profitable for those that already know how to take it in?

    The game is flawed, much because those who run it care nothing about keeping it clean. It’s “what’s in it for me, today”. And now, we suffer. Isn’t that sorta fair, after all? The perfect storm? You would think it matters, but it doesn’t. NOTHING changes. If Pope discovered the Holy Grail, the answer, and the magic marketing button, but it costs a dollar to implement… trust me, if the dollar came from the leaders of the sport itself, it ain’t comin. There is no vision, only greed. Expect the usual, because folks, that’s what were getting. Period.

    By the way, in closing… here’s how you create/protect a brand: You must ENGAGE the crowd. Do something that gets noticed. Follow that up with: DELIGHT: bind them to your product, make them evangelists, do the right thing and have people (bettors, fans, everyone) speak about the good, the value, the brand-able assets THEMSELVES. Or you could race them four times a year, and create heroes out of goats… elevate mediocrity.

  • CG

    Last year we had Zenyatta and the movie Secretariat and handle still went in the toilet.
    Marketing, shmarketing.
    Price the game competitively and it will grow.
    You want more gamblers, appeal to more gamblers.

  • CG

    Why can’t the top finishers in Uncle “Mo’s races receive the $20 million in purses due from wagering on their races? Our stars need to be compensated for the revenue they generate. That’s how the real world works.”
    *******************************
    The real world? Let use the NFL for example. Isn’t the revenue split up amongst all teams in a revenue sharing scheme? When I watch a game on TV, does the network I watch it on not make money?
    Pope, which real world are you talking about? Mars? I don’t know what happens there to be honest.

  • Jake

    Uncle Mo is not a brand till he wins Triple Crown. If not he will be standing in Ocala for 10,000. next year.

  • voice of reason

    And $750 a year later in South America.

  • Albany

    Great ideas. short fields in Graded stakes races are not good for the sport.
    #3. Secretariat was a boring movie that had little to do with the truth or racing. I love racing, but I couldn’t finish watching the movie. Boring.

  • Fran

    Some ideas are good, but there is the real star-the horse. Without the horse, no racing. I think there has to be some very solid help for the retiring horse. Not all are stars. Additionally, something has to be done for the jockey in the way of compensation. What happens when the star horse does not win the race. The industry needs to be revised, not for the owners and trainers. It has to be revised for everyone and that includes the backside people.

  • http://yahoo roger

    Good Wed. For Gulfstream Park
    ———————————-
    Mutuel total $5.0 million from which $4.3 out of state.

  • ratherrapid

    thoughtful though my reaction to Pope’s post is another OMG. NASCAR/WWF here we come. If only Pope put as much energy into marketing to find additional gamblers as he did splitting the existing pie.
    Pope admits he’s other than a horse person and he certainly is other than an athlete or has any understanding what makes money for a professional athlete. Athletes, coaches and trainers never think in the manner expressed by Pope. They have confidence in their skills, enjoy competition and believe that by their skills the money will come. For the good one’s it does. That is what sport is instead of some contrivance to award an ill trained horse and an owner luckily stumbling into the sport a 20 million dollar windfall at he expense of every one else in the sport. And, never mind the race tracks that put on the show. According to Pope, they owe the owners whereas everybody in racing understands, we need those tracks, and we better be giving them enough handle to stay alive. A “C” for some ideas embedded in the nonsense.

  • ratherrapid

    should have added–everybody except N.E. HBPA apparently.

  • thomasMc

    Few good ideas embedded in the nonsense.

  • California Breeder

    Realistic I’m not so sure but this is the kind of outside of the box thinking this industry could stand. If the folks in the lower the takeout club read this as I did Pope is trying to make races more competitive to there benefit. I dont see anyting wrong with that.

    It is an interesting idea and might give owners incentive to enter races where they have the chance to win the most

  • [email protected]

    “elevate mediocrity” riiiiight!

    hmmmm lets us not forget without a national governing body and most race tracks 100% independently owned/operated it isn’t a level playing field no matter what from state to state. Some could even argue it isn’t even the same product either depending on where these races are conducted. For example summer racing at Yavapai Downs is no Saratoga. So what is mediocre to one set of patrons might be mothers milk to others. The plain truth is some brands dont need “protection” they sell themselves through years of quality and good guardianship. There will always be a market for Brute as well as Dom Pérignon however these are not the same clients or patrons :)

  • Marketing Geanyus

    OK so you have a great horse winnng everything but nobody wants to go against him (purses only go to top 5),everyone knows your horse is going to win so the handle stinks and you end up beating four other horses of course the win purse stinks too. Might as well retire this superstar.

  • C Bea

    Yawn!! Fred Pope self promoting once again. You’re ideas are not based in reality Fred.

    How about this for the problem of graded stakes with small fields, associate the grading to the field size. Grade 1 must have 10 or more entrants, Grade 2 must have 8 or more and Grade 3 must have 5 or more.

    The Grading matches the purse. If the field slots it in as a Grade 3 purse is $125,000 on up, Grade 2 purse is $250,000 on up and Grade 1 $350,000 up.

    This way you’re not giving up a large purse for a short field that creates limited wagering interest.

    The Derby’s 20 horse field certainly has a lot to do with it’s appeal to fans and bettors alike.

    The ridiculous 4 and 5 horse graded stakes makes our sport look silly.

  • C Bea


    Technology companies like IBM, or perhaps Google, would be thrilled to show the partners in racing how much money and integrity they could save the sport with a new, state-of-the-art wagering system paid for and upgraded through a percentage of each wager.”

    Fred please tell me you didn’t think this nonsense much less type it up.

    Neither IBM nor Google nor any other tier one technology company wants our business. The disjointed and political nature of our Industry will never allow it. It won’t leave any money for the Jockey Club to put into their pockets!!!

  • http://paulickreport.com progressive

    I certainly agree with what he says about the tote! It’s a joke. The big mistake racing makes is the tireless promotion of the “story”. That’s for people who are “in” and love the game. To attract NEW people, let’s forget about the “story” crap as the horses come and go. This game is based on GAMBLING! It’s still the only legal form of gambling in this country and we have failed to take advantage of our monopoly. My point is proven by a story I read on this website some time back about the handicapping show in Canada. When they got away from the sappy “story” and focused on GAMBLING the ratings and the handle INCREASED!!! Purists can hope that when new players get involved then maybe they’ll be interested in the “story”.

  • Cris

    A race has a purse. The horse runs for it. The winning owner gets the bulk of the purse. Now we give them more? The owners do not take care of the horse after his racing days have passed to a great degree. The rust on the sport is how the star is treated. Until the sport sets aside real money to take care of all horses that run either by a decent retirement, retraining, or death with dignity, not at a slaughterhouse. I suggest a pool that is set aside from the betting pool that goes for the care of the horse only. I suggest vendors to the tracks also work towards this end. Not every racehorse is able to be retrained some are too lame, some are too high strung, some are nice enough but are just not able. When the industry is willing to fix this problem people will have a better feeling about going to the track and betting on that $5000 7 year old claimer in the 9th race.

  • ratherrapid

    i am glad Mr. Pope is posting this sort of thing. seems more ideas are needed. am wondering, what e.g. Mr. Pope has in mind for the future of horse racing–number of tracks, location, size of the sport. I guess he is focusing on marketing for individual clients. fine. there is room for that. does Mr. Pope, being a marketing person, have any explanation why the tracks decline to advertise themselves in public media such as TV and internet. And, what does he see in terms of leadership and getting something going to save the sport. ideas are great, but if they just lie there what good does it do?

  • Fred Pope

    I think it is good to question the status quo, especially when the status isn’t good.

    Why should racetrack operators determine the compensation model for racehorse owners? Just because they have always done it a certain way, isn’t a good answer. Racehorse owners should at least consider other options, as it is their money.

    Why should racehorse owners sit back and put up with tote systems that cheat racing’s customers (horseplayers) by allowing bets after the race has started?

    The 50-50 deal to split wagering revenue says the racehorse owners are responsible for providing and paying the talent, the horses and riders. The track operator is responsible for providing the facilities and “taking the bet”, which used to mean paying the tellers and the tote machine company. Some where along the way with off-track wagering, the people representing the racehorse owners agreed (or didn’t stop) the tracks from starting to expense the costs involved in off-track bets, before splitting the off-track revenue 50-50. Splitting gross and splitting net are quite different. So, if we could start a new, national tote system that could accept wagers direct from customers in real time, it would help most horseplayers and most host tracks return to a “on-track” model where they make money on live racing. And, the sport would have integrity of the wager.

    The reason tracks do not advertise their races is because the cannot get any money for their races in the off-track market. Pretty good reason to close the marketing office, when no money is coming in from your product. Put in a national tote that accepts wagers direct from customers without the middlemen taking too big a cut and the host tracks will make money and advertise their races.

    There are plenty of people reading this board who could add to the idea of questioning the incentive to avoid competition. Maybe my idea isn’t good, but someone else needs to step up and offer another solution, that’s how you get things going and get things done. Isn’t that the purpose of these blogs?

    The people is Egypt sat around a long time complaining and suffering until somebody pushed the right button. Who knows what will happen, but it won’t be the status quo. Don’t give up on Thoroughbred racing.

  • ratherrapid

    lol, on Egypt. we need to throw bricks and riot.
    txs for response. i fail to completely understand the tote idea but it seems to make a lot of sense. there should be a way to eliminate most 3rd party ADWs if the sport had an organization and a will (where is NTRA?????). I personally consider track owned (and advertised) ADWs as the primary hope for the future. Why, e.g. would Fairmount Park fail to have it’s own ADW with bill boards plastered all over St. Louis interstates, and flyers sent to the local AARPs.
    Being on the horse side Pope’s view of the tracks vis a vis owners is unfathomable in present market conditions. What little money there is needs to be put into advertising instead of purses that in real time are primarily captured by two or three leading trainers at each track, and the occasional owner struck by blind luck. Possibly where I differ with Pope is that purses are high enough as they are. Way too high probably. If you are unable to make $$$ with your horse at $100,000 a day purses you are also going to fail at $400,000 a day. Simple as that. The tracks are in an emergency and the owners/trainers are still yelling about increasing purses as they have been for my 30 years in.

  • Indulto

    Mr. Pope,
    I almost missed your piece due to its title, which didn’t reflect its true content. It didn’t help that your authorship wasn’t promoted, either. Fortunately, Brendan O’Meara thought enough of it to mention it in his HRI blog piece, “Here, here, Pope Frederick I” (http://www.horseraceinsider.com/carryover-2-0/comments/here-here-pope-frederick-i/#comments)

    Once I got past all the marketing buzzwords, I thought you might be endorsing a concept similar to one from an ongoing discussion here between Caroline Betts and myself; the latest installment occurring on 01/25/2011 in comments nos. 63 and 64 at (http://www.paulickreport.com/news/the-biz/cangamble-crist-gets-it-wrong/?commentStart=60#Comments)

    As is customary in your proposals, however, everyone except the horseplayer stands to benefit financially. In my version, bettors as well as owners are rewarded for higher handles in individual pools with higher payoffs to winners through lower takeout applied to all pool participants ensuring a level playing field. In yours, the focus is only on larger purse distributions to owners.

    I agree that a new tote system represents an opportunity for tracks to minimize off-track bet-taker costs, but there was no mention of preserving either on-line bettor convenience (internet betting platform preferences and conditional wagering) or added value options (past performance data, on-line analysis, high-definition video, replays, etc.). Perhaps on-line bettors should be paying capped service fees to watch races live or submit a wager within 15 MTP on races at tracks that charge their patrons for admission. Maybe on-air analysis needs to be funded independently to obtain higher quality

    Still it’s good to hear someone representing horsemen’s interests admit that small and/or non-competitive fields are detrimental to both the game and the sport. Plus, you’re never boring or safe for horseplayers to ignore.

  • caroline

    Indulto, this is such an important point. When you shift purse risk, in the manner suggested, to owners (and tracks) on a race by race basis obviously there is a real possibility of substantively lower investment, ceteris paribus. You need to ensure that the higher risk is offset by higher expected/average returns, or that there is investment stimulating covariation of pools with relevant measures of reward to investors over time. I think the only way to ensure that is to provide coordinating incentives to those agents directly investing in the pools.

  • http://www.5Rstables.com Sean Kerr

    Hi Fred

    Thank you for offering such a compelling and interesting concept. I hope that your thoughts lead to a vigorous debate. I like most of your points.

    However, I think your good points are undermined by a crucial factor that your essay did not address: a national racing commissioner.

    To my mind, and as you demonstrated, it is useful to compare our sport to some aspects of the NFL et al. But don’t these sports have a central commissioner with ultimate oversight and full enforcement powers?

    To my mind, our sport has zero chance of surviving the decade until we achieve a national commissioner.

    I would like to address the ‘branding’ examples you pose:

    1) in your experience, do marketers contemplate and quantify the costs of reputational risk and damage to a product?

    2) There is a growing frustration amongst fans about how trainers suffering suspensions for medication violations are slapped on the wrist and indeed are rewarded with prestige. I would question Mr. Repole’s trainer choice, for the obvious reasons – it won’t be a surprise if the “Life at Ten” controversy explodes into a much worse public controversy and again our sport will take another reputational hit. Would Mr. Repole risk the brand value of Vitamin water by monkeying around with the ingredients?

    Based on Facebook postings alone I estimate roughly 18 out of 20 people express dissatisfaction over this state of affairs. By the way, this estimate is derived from my page which has over 3,000 ‘friends’. The rancor is marked. How does this manifest itself as a profit hit to racing?

    3) I love this sport to the core of my soul and often beg friends, colleagues and acquaintances to come to the track. The following 2 reasons for not going are consistently stated:
    a) horse racing is cruel
    b) racetracks are boring

    Whether these perceptions are correct, it is irrelevant. As I would guess your realize, perception is all that matters in the efforts to win customer loyalty.

    What is the ripple effect through the economy and the hit our potential ‘brands’s suffer when racehorse rescuers and adopters tell people of the horrors of over-medicated racehorses whose joints have been blown out by repeated injections and can barely walk or move, or the horses are suffering from detox. They tell people who tell people who tell people. This is to be taken seriously – perhaps your brand concept could help. Regardless, the industry does not consider the racehorse as an asset and an ambassador seriously enough to render branding viable.

    A national horse racing commissioner empowered with full oversight and enforcement powers over all aspects of horse racing, by way of a repeal and replacement of the Interstate Horse Racing Act of 1978 is the only chance this sport has of surviving. It must happen. Indeed – I am putting considerable effort and energy into this cause and encourage others to join.

    What are your (and all others) thoughts?

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