The National Thoroughbred Racing Association and Breeders' Cup announced a 40% reduction in personnel and resulting administration costs as part of what they call a restructuring of their joint operating arrangement.
The two companies, which have operated jointly since 2000, said they reduced personnel levels across departments, including the elimination of management and staff positions in administration, finance, information technology, nominations, event operations, legislative, and product development.
A number of functions previously handled internally, including graphic arts, licensing, and merchandising and simulcasting, will be outsourced, according to a July 7 press release. The release contained no details on specific positions that were eliminated.
"This right-sizing is the first step in a phased plan to place additional focus and resources on core strategic priorities," Greg Avioli, who took over as interim chief executive officer CEO of both organizations July 1, said in a statement. "We are confident that our stakeholder tracks, horsemen, owners, and breeders will have a stronger, more effective organization.
"Over the last five years, we have seen where the NTRA and Breeders' Cup can be most effective. We are now entering a new era. Breeders' Cup purses have been increased to $20 million. We have a new network television relationship that will deliver more national and international promotion of the sport than ever before. We continue to attract new sponsors and marketing partners, and our ability to shape public policy to the benefit of our members has never been stronger."
Avioli couldn't be immediately reached for further comment on how the cuts would impact a 2006-10 strategic plan for the NTRA. The five core areas of focus are fan development, corporate sales, legislative advocacy, the organization's role as a trade association, and growth of the Breeders' Cup World Championships.
Breeders' Cup and NTRA are in the process of reviewing their joint operating agreement, which is now in place on a year-to-year basis. The NTRA, meanwhile, is attempting to get membership renewals beyond 2006; Breeders' Cup has said it wants the renewals in place before it commits to extension of the joint operating agreement.
The current joint budget of about $70 million relies heavily on operating revenue from Breeders' Cup. A financial plan that accompanies the strategic plan sets total Breeders' Cup revenue at $42.5 million, with NTRA membership dues at $13.4 million.
Purses are the major operating expense at $27.5 million, followed by marketing at $13 million and television at $11 million. General and administrative expenses are $5.7 million for this year, according to the financial plan.