Today, after watching the Fountain of Youth Stakes yesterday and scanning online national and local news, I verified my perception regarding the dysfunctional nature of the organizations responsible for horse racing.
Only 10 months after American Pharoah’s Triple Crown, which all agreed was the biggest thing to happen to racing over the last four decades, three undefeated 3 year olds raced against each other in yesterday’s Fountain of Youth Stakes. After Mohaymen won, looking every bit the part of another top Triple Crown contender with 4 straight solid wins, I thought it was news. How wrong I was.
Not only was it borderline impossible to find HD coverage of the event, though I did finally find it on our obscure channel 635 because I have Direct TV and multiple subscriptions, but today only the massively inbred racing related news agencies even mentioned it.
The people who run racing, and are supposedly responsible for improving racing in this country, will say there was no coverage because “that’s just the way it is.” I say it’s because less than capable politicians do not understand how to “generate” coverage, develop marketing campaigns, create interest through advertising or understand that their target market isn’t those who already like racing, but indeed those who don’t!
With the Derby just over 2 months away, the combined power of these racing organizations have run innovation contests with no concept of “profitable revenue generation or product cannibalization”, started entirely useless “inbred” town hall meetings where consumers are not even represented, built stupid and redundant online racing games, had hundreds of meetings focused on administrative minutia, coordinated boondoggle conferences, decided that microchips are more important than stimulating racing growth after decades of decline, and publicly proclaimed that their efforts have improved things because their techies count social media views and followers. (I fired techies for less than that because they should be counting “revenue based” consumer engagement and product adoption.)
To demonstrate the delusional nature of the folks in charge, let’s analyze an exact quote from the key media progress report during the last Jockey Club Round Table meeting.
“As you may recall, Dan Singer and Michael Lamb (McKinsey) presented a bleak future for Thoroughbred racing unless we made some changes. Based on their research, the key indicators for the sport were set to continue their decline with handle projected to drop by as much as 25% by 2020. The decline in handle has slowed considerably since then. While McKinsey forecasted 2014 handle to be $10.1 billion last year, the sport was able to generate $10.6 billion.”
This statement would be hilarious if it wasn’t so painful to those of us who understand business double talk. “The decline has slowed”, means declines continue but they aren’t quite as bad as predicted. Why you might ask? What slowed the decline was a special cause occurrence of having the first Triple Crown winner in 38 years, and guess what? That “amazing” occurrence improved handle “marginally” by less than 5%!
Worse than this first statement, the follow up statement was amazing.
“Yesterday we announced the projected foal crop for 2016 to be 22,500. In comparison, McKinsey projected the foal crop to be 25,100 for 2016. Any reduction in foal crop adversely affects the number of starters. Data from Equibase indicates there are 20% fewer starters in 2014 than in 2010, and that trend will continue as larger, older foal crops are replaced by the smaller crops. In turn, we can expect the lower number of starters to reduce handle.
So Mckinsey was “optimistic” and underestimated the decline in the foal crop by a double digit margin percentage of over 10%? So let’s get this right. These folks were patting themselves on the back for “simply existing” at a time when a Triple Crown winner happened to race ,while the predicted massive decline in foals is considerably “worse than expected”! They even acknowledged that this foal crop issue will reduce handle! Oh My! As always I am amazed as politicians create the illusion of progress instead of making progress, and so many people don’t even recognize the difference.
Was I just being the critical skeptic or was my disgust justified? I decided to find out and stopped by one of our local coffee shops in Hastings Minnesota early this morning. I sat at a table near the entrance and asked everyone I saw if they knew who Mohaymen was. I even wrote his name on a napkin with a marker. So there I was in the middle of Minnesota horse country, a short walk from the local feed store. After saying hello to the first 63 people I saw, and a few that I knew, I realized I could sit there all day knowing that the best new Triple Crown contender revealed himself yesterday, and I was likely the only person in our town who knew it.
And we wonder why a “slowed decline” seems like success in racing.
Dave Astar is a race horse owner, stallion owner, breeder, 40 year business executive, and 50 year handicapper.