Putting the Ponies Back in the Race

The Kentucky Derby boasts of being the greatest two minutes in sports. But, unfortunately for thoroughbred racing, once the horses thunder across the finish line on the first Saturday in May, the sport of kings quickly fades from public view.

“Racing is completely irrelevant to most people,” said Keith Bruce, a San Francisco-based sports marketing executive. “It’s thought of as a sport for fat, old, balding guys with nothing better to do than go out and play the ponies.”

Once the nation’s most popular spectator sport, racing was the favorite of just 0.4% of respondents in a 1997 survey conducted by a trade group that represents thoroughbred racehorse owners and breeders.

The horses began to lose their lead during the 1950s and 1960s when individual tracks decided to protect live attendance by prohibiting televised coverage. The sport’s public image shrank further as it focused on internal squabbles while other professional sports started marketing themselves more aggressively.

Now, horse racing’s fractious forces--owners, breeders, track operators and jockeys--have set aside their differences to lure newcomers to the track. Following the example of auto racing and hockey, they have created a central lobbying and marketing office that they hope will remake their sport. The National Thoroughbred Racing Assn., which opened last month, has a $20-million budget and a slogan (“Go, Baby, Go”). And it has an unprecedented mandate to turn thoroughbred racing into a nationally recognized brand--and entertainment option--that can better compete in the world of professional sports.

The association also hopes to help horse racing capitalize on the exploding consumer interest in sports and gambling, by enticing a public that now has many simpler methods of gambling that offer bigger pots.

Even people in the industry rate the association as a decided longshot--if only because of the fragile alliance among horse owners, breeders, track operators and jockeys. Two attempts to form a powerful national office earlier in this decade failed because the groups couldn’t come together.

“Everyone is holding his breath, just hoping and praying that this love affair in racing is going to last,” said Tony Chamblin, president of the Assn. of Racing Commissioners International, which represents parimutuel betting industry regulators. “But in this industry, every group is made up of mavericks who tend to go their own way.”

That’s no longer a viable strategy in an era when sports leagues spend heavily to groom their images in order to draw fans.

“When no one’s in charge of promoting a brand, each horse owner and track operator is worried about himself, and you fall off the radar of most fans,” said Hamilton Jordan, the former White House chief of staff who served briefly in 1996 as a consultant to the racing industry. “No one’s thinking about the product and about ways to present it to new customers.”

Decline in TV Coverage

Racing’s troubles have been a long time in the making.

What started out as a popular form of entertainment in rural America reached its peak of popularity at the end of World War II. “Racing was blowing everyone else away in terms of sports newspaper coverage, even in cities that had baseball teams,” said John Walzak, who researches racing-related regulatory issues at the University of Arizona in Tucson.

The advent of television in the 1950s set up the sport’s ill-fated decision to limit TV coverage. And officials failed to realize that television helps a sport attract fans and build attendance.

Now, just 11 of the 1,900 hours of sports event programming broadcast each year by the four major networks are beamed from tracks. Industry leaders sit glumly on the sidelines as other sports use TV contracts to lure new fans and forge lucrative marketing deals with beverage companies, car manufacturers and telecommunications giants.

“Someone once wrote in a column that TV is the central nervous system for us all,” said Steve Bowen, director of business development for Merkley Newman Harty, a New York-based advertising firm that the thoroughbred association hired to create a national advertising and branding campaign. “And if it isn’t on TV, you don’t feel it, it doesn’t exist. And that’s the big deficit of racing . . . it doesn’t exist on TV.”

The association hopes to remedy that by doing what sports like volleyball and tennis do: Buy blocks of time from networks and, in this case, fill them with horse races and feature stories. It eventually hopes to join elite sports like football that auction broadcast rights to the highest network bidder.

In today’s sports world, racing is further hampered by its uneven quality. While Clipper fans may bemoan their hapless basketball team, they can always count on luminaries like Michael Jordan or the National Basketball Assn.’s top teams visiting the Sports Arena.

Star horses rarely perform outside of top-echelon tracks, so lesser tracks struggle to draw crowds with little-known horses. “All you see racing at smaller tracks are cows,” said Studio City resident Larry Enzer, 51, who regularly attends races at Hollywood Park and Santa Anita Park, both among Southern California’s premier courses.

But the thoroughbred association acknowledges that its limited budget isn’t going to immediately improve the quality of racing at second-tier tracks--some of which eventually will go out of business. Smaller tracks can only hope that broader television coverage will increase the number of people who want to experience live racing.

But simply getting newcomers to the track won’t solve all the problems, because racing’s style of gambling has fallen from favor. Newcomers who can’t tell a trifecta from a perfecta grow frazzled when they approach a track window to place a bet.

Although even experienced gamblers sometimes rely upon hunches, part of the game traditionally involves studying the horses and their jockeys and noting such variables as track conditions.

In contrast, today’s betting public has access to state lotteries that sell tickets in convenience stores with the lure of multimillion-dollar payoffs--and the machine will even pick your numbers. Racing also is under attack by a flotilla of riverboat and other casino venues.

At Churchill Downs, home of today’s Kentucky Derby, officials fear that live betting at the track could be cut by 30% when a massive riverboat soon docks nearby on the Ohio River.

Racing’s share of legal wagering plummeted to 7.8% from 28% in the past 25 years. International Gaming & Wagering Business magazine reports that the $438.7-billion gaming industry is growing at an 11% clip--but racing has managed only a 1.8% growth rate, to $14.9 billion in 1996, up from $11.7 billion in 1982.

Tracks hunger for a greater share of the dramatically increased gambling pot because at a place like Santa Anita, 81 cents of every dollar bet is returned in winnings. The track keeps just under 4 cents, with the remainder gobbled up by governments, horse owners and breeders, and operators of satellite wagering facilities.

Tracks are testing new forms of gambling, ranging from bingo-like cards to simple odd-and-even bets. Some tracks also are gaining regulatory approval to add slot machines and video poker.

Churchill Downs recently tested a system that let fans use a TV-top device and what amounted to a debit card to place bets from home. And the thoroughbred racing association has crafted an agreement to supply racing for a proposed national gaming television network that plans to begin broadcasting this year.

The industry believes its long-term future will be determined in large part by how well it navigates the technical and regulatory maze leading to online gaming. The racing association is betting that future gains will be powered by at-home gaming conducted over telephone lines, cable systems and the Internet.

But as that happens, the association will have to lobby Washington and state legislators to ensure that its form of gambling survives as online regulations are crafted.

Vegas-Style Showmanship

The association believes that nearly 60 million consumers share attributes--a love of sports and gaming--with 2 million aging railbirds who drive attendance at tracks. But even the racing group acknowledges that most Americans don’t think of racing as an entertainment option.

“When you go out to the racetrack on a typical weekday afternoon, you see the same people day after day,” Chamblin said. “I’d say the industry has its back against the wall.”

Racing missed an opportunity by failing to emulate Las Vegas, where gambling is just one element of a city that pitches itself as an entertainment destination for the whole family.

Legendary baseball promoter Bill Veeck incensed the racing industry in 1969 when, during a brief stint as general manager of Boston’s Suffolk Downs, he tried to make the sport more entertaining by staging chariot races, livestock giveaways and mock cowboy and Indian fights in the infield.

Now the industry is embracing Veeck-style showmanship.

Santa Anita recently staged a daylong Latino music festival along with racing to draw its biggest crowd--32,000--of the season. The Arcadia track also held a brew fest and invited fans to ogle 100 Rolls-Royces parked in the infield to build attendance at the Santa Anita Derby on April 4.

Santa Anita credits an increasingly sophisticated marketing program with reversing an 11-year attendance slide. Despite El Nino, the track reported its first attendance upswing in 11 years--up 0.9% to 1,062,657.

Hollywood Park in Inglewood successfully fought jockeys and trainers for the right to stage racing on Friday nights--highly unusual in an industry that prefers daytime racing. The track believes that’s necessary to broaden its appeal to young singles. It also has brought in cheerleaders, cheap beer and rock bands.

When Lone Star Park opened last spring, the Dallas track incorporated a $100,000 playground. And last month, it invited families to a pre-race Easter egg hunt billed as the city’s largest.

Aqueduct in Queens, N.Y., transformed the first floor of its grandstand into a supervised playroom for children.

“It comes down to doing the blocking and tackling you need to do in any business,” said William C. Baker, a former amusement park industry executive who serves as chairman and chief executive of Santa Anita Cos. “You’ve got to do your marketing. You’ve got to attract, entertain and retain--get their attention, give them something entertaining enough so they want to come back.”

The tracks spend an estimated $60 million a year to advertise and market their own venues. But sports marketing industry observers say racing would benefit from a blending of local and national ads--not unlike the big pot of money that Las Vegas spends to enhance overall tourism, even as individual hotels continue to advertise.

Noting the marketing-driven popularity of NASCAR, the stock car racing league, Bowen said: “Up until a few years ago, who other than some people in the Southeast wanted to watch a bunch of rednecks with grease under their fingers race cars? Well, that’s changed dramatically.”

Horse racing will begin by addressing the basics, said newly named racing association Commissioner Tim Smith, who helped write the Atlanta Summer Olympics business plan and served as chief operating officer of the Professional Golf Assn. Tour.

Among the first steps: paying for a Sports Illustrated insert that explains how to place a bet and sending “mystery shoppers” to tracks to test customer service.

The racing association hopes to emulate NASCAR’s success in turning a string of individual races around the country into an easily definable season. The industry hopes to whip up excitement with a season that begins in the spring, runs through the Derby and the two other races that make up the Triple Crown and culminates in November with the final Breeders’ Cup race, which will be held this year at Churchill Downs.

Just as important, the association will start to court potential national advertisers.

Having a strong, central office “bodes well for attracting sponsors,” said Michael Lynch, vice president of event marketing for Visa USA, the Triple Crown series’ top corporate sponsors. “Our successes with things like the Olympics and the [National Football League] are due to the fact that they do have strong, well-managed governing bodies.”

Racing’s failure to broadly market itself “is a tragedy,” said Newport Beach resident Bob Lewis, chairman of the 9,000-member Thoroughbred Owners of California and owner of 1997 Kentucky Derby winner Silver Charm. “And it all stems from our industry’s lack of unification.”

Lewis says the racing association has done what no other horse racing organization has--get owners, track operators, trainers and jockeys into the same room.

But there’s a long way to go.

“They’ll have to spend in the $20-million to $30-million range for several years just to get the awareness level to move,” said Jim Johnson, president and chief executive of Anspach Grossman Enterprise, a New York-based brand and corporate identity firm.

There is a firm belief in the industry that the thoroughbred racing group represents the sport’s last chance to pull out of its downward spiral.

“If we don’t promote the sport at the same level of professionalism as other sports, then I will guarantee you racing will be stuck in the same rut it is in now,” said Ogden Mills Phipps, chairman of the Jockey Club, a 104-year-old organization that monitors the pedigree of thoroughbreds.

“Other sports will continue to pass us by,” he said in August during an industry symposium in Saratoga Springs, N.Y. “If the [association] doesn’t become a reality, 10 years from now, those who are still around will rue the day we let this opportunity slip away. I guarantee it.”