In its 2001-02 annual report, the National Thoroughbred Racing Association outlines a $59.5-million budget that relies heavily on revenue from Breeders' Cup Ltd. and membership dues. The NTRA and Breeders' Cup now operate under a joint spending plan.
On the revenue side of the ledger for 2002, the NTRA anticipates $31.15 million (52.4%) from Breeders' Cup; $18.43 million (30.9%) from membership dues; $7.32 million (12.3%) from television, sponsorships, and promotions; $534,000 (1%) from its Racing Integrity and Drug Testing Task Force; and $1.5 million (3.4%) from board-designated allocations from the previous year.
On the expense side of the ledger for 2002, advertising, marketing, and promotions are set at $22.31 million (38.2%); purses and awards are listed at $19.65 million (33%); television costs are $6.87 million (11.6%); general and administrative costs are $5.28 million (8.8%); sponsorship costs are $2.96 million (5%); legislative and regulatory expenses are $1.43 million (2.4%); and the drug testing task force will get $534,000 (1%).
Total operating expenses will rise from $56.72 million in 2001 to $59 million in 2002.
The report includes an explanation of the NTRA's arrangement with Breeders' Cup, which provided a "non-transferable, non-exclusive, royalty-free license for NTRA to utilize various intellectual property, including copyrights, patents, trademarks, logos, customer information, and other information," according to the financial statement in the report.
NTRA will pay a one-time license fee of $1.5 million on or before Dec. 31, 2003, in the event the NTRA's net assets exceed $6.5 million on or before that date. If the NTRA has net assets of $6.5 million in 2004 to 2010, the license fee would increase from $1.6 million to $2.25 million, the statement said.
Breeders' Cup reserves the right to provide the NTRA with an annual allocation each year. For 2002, that figure is $2 million.
A few years ago, NTRA members loaned the organization $16 million to pay for NTRA Productions' purchase of assets of Winner Communications, which is now called Winnercomm. The total purchase price is $27.5 million pending adjustments. In 2002, the NTRA will pay $2.25 million toward the purchase price.
The NTRA got out of the wagering hub business in 2001, and therefore, anticipated revenue from interactive wagering is not in the budget. In its original business plan, the NTRA had projected millions of dollars in revenue from interactive wagering through its relationship with the TV Games Network.