Signaling Change
Photo:
Ray Paulick
Editor-in-Chief
It is difficult to review operations for the first five years of the National Thoroughbred Racing Association without wondering what might have transpired if the forerunner to the NTRA--the owner-driven National Thoroughbred Association--had gotten off the ground.

The NTA, whose early visionaries included advertising professional Fred Pope and breeder John Gaines, brought eventual NTRA commissioner Tim Smith into the Thoroughbred business, along with former Carter White House chief of staff Hamilton Jordan. The NTA's preliminary business plan, released in December 1996, focused on the creation of high-quality weekend racing, the pooling of simulcasting and television rights from horse owners to a league office, and a national marketing and branding strategy designed to make the sport more popular.

The NTA hoped to transform what had been a buyer's market for simulcast signals into a seller's market. The owner-driven organization anticipated the simulcast signal from its top-quality racing program could be sold for more than double the going rate of 3%. The added revenue would lead to an increase in purses and bonuses for NTA member-owned horses, and fund a national marketing and television plan.

While the NTA's creators insisted their strategy was not an "us vs. them" rights battle against racetracks, managers at several key tracks saw it that way and vowed to fight. The NTA had the support and financial backing of many of racing's most influential owners, but industry leaders representing The Jockey Club, Breeders' Cup, Keeneland, and the Oak Tree Racing Association proposed an alternative organization designed to share governance among tracks, horse owners, and breeders. Within a few months of the publication of the NTA's preliminary business plan, the owners organization was effectively defunct. In its place was an industry alliance, which later that year was named the NTRA.

The NTRA has made many positive strides for the sport in its five-year history. The Thoroughbred industry has a far stronger presence in Washington, D.C., than ever before, and the lobbying efforts there have made a difference. The combination of group purchasing and corporate sponsorship is another winner the NTRA can point to, as is the fact racing's exposure on television is at an all-time high.

But the NTRA has not addressed the issues on which the NTA's business plan was centered: the low percentage charged for simulcast signals and the inability of horse owners to exert their rights to raise the price.

The simulcast buyer's market has led to some absurd situations that many people now accept willingly. For example, off-shore companies and simulcast-receiving sites that do not offer live racing receive up to five or six times as much revenue from betting handle as the horse owners and tracks putting on the show. With these simulcast outlets receiving 15%-to-20% of handle, they have been able to offer rebates to their betting customers and still pocket more than the track and horse owners at the sending track. In many cases, the rebate shop customers previously wagered on-track, where a far greater percentage of takeout supports track owners and purses.

A few tracks have been able to raise the price of their signal to these simulcast outlets that do not offer live racing. But as more and more on-track betting dollars are transferred to off-track or telephone betting sites, the revenue for track operators and horse owners is stagnant or in decline.

NTRA commissioner Smith, in a Q&A session with news editor Tom LaMarra (page 1812), cites the importance of pooled rights and a strong central organization to successful sports operations like the PGA and NASCAR. Smith was the project leader for the NTA's business plan in 1996, so it's obvious he understands the challenge simulcasting poses. It's now a matter of energizing the industry to make simulcasting work better to support live racing.

The NTRA has not addressed the issues on which the NTA business plan was centered

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