by | 11.17.2010 | 12:47am

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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