I recently read my favourite racing quote of 2011. It came from trainer Dean Nixon, following his win in the Gold Cup and Saucer. “I think something that is missing in horse racing is the pageantry,” Nixon told The Guardian. “That was a post parade worthy of a $6 million race, not a $60,000 race. That alone is worth the price of admission.”
There are two vital parts to Nixon’s statement. Firstly, by focusing on making the event exciting, including something as mundane as the post parade, virtually everything becomes secondary to the pageantry of the event. Secondly, if you create a worthy spectacle with entertaining packaging, like the Gold Cup and Saucer (where the admission fee this year was $9 per person), you have something that people will eagerly pay money to attend.
In most entertainment businesses, big events are money makers. Sponsorship, ticket sales, food and beverage revenue and vendor fees from a single weekend can sometimes make an organization run profitably for the rest of the year. But sadly, in Canadian racing, the opposite is usually the case. When tracks spend to lure families and newcomers to their facilities as part of a celebration of racing, they often take a financial hit. Do the Battle of Waterloo, Xtreme Horsepower, Confederation Cup, and Western Canada Pacing Derby make money? In regards to racing related revenues? No!
If $250,000 is wagered on a card, in actual fact, the track will almost certainly see less than $15,000 in revenue from that total handle, as will the purse pool. To take it a step further, if a racetrack manages to make monumental inroads on the simulcast world for this singular event, and adds an additional $500,000 in off-track handle to that total, they will benefit with approximately $7500 in bottom line revenue (assuming the standard 3% return, with half to the horsemen). Frankly, that increase wouldn’t cover the cost of a modest radio campaign in a mid-sized Canadian market.
I am a big proponent of driving handle and getting people betting on Canadian harness racing. But when you build an event, draw thousands to it, and watch them leave without realizing any revenue, is it serving its purpose? Yes, you’ve exposed the product to new people — but if you convince them to come back, are you delivering the same experience the following week?
The recently reported quarterly report from Churchill Downs showed that earnings quarter over quarter jumped by $9 million from 2010 to 2011. The growth was driven primarily by a $6.4 million increase in sponsorship, admissions, corporate hospitality and broadcast right fees from two events: the Kentucky Oaks and the Kentucky Derby. We may not have a Kentucky Derby, but we have events that companies would sponsor, vendors would pay to be at and customers would pony up to attend. Perhaps the best model, like that utilized for the Queen’s Plate, allows free general admission, but offers the best seats to those who purchase reserved tickets. Maybe we can have private boxes, waitresses or in-seat wagering. Perhaps food vendors could liven up the on-track offerings. Would General Motors pay to show off their newest model between races?
Like Dean Nixon, I love the pageantry of the Gold Cup and Saucer (presented by Sobey’s, I should add) and want to see more of it at tracks across Canada. I also love that people plan to attend, pay admission, and feel they are truly getting their money’s worth. After all, there’s only one time when a product being worth the price of admission is not a good thing — when it’s free!
By Darryl Kaplan
[email protected]