The recent Breeders' Cup board meeting that resulted in the adoption of a new set of governance by-laws is the beginning of a new era that will allow for more inclusivity, transparency, and accountability. This was brought about by concerns and questions that were presented by a group of constituents and board members, beginning after an April board meeting at which stallion nomination fees were increased to fund higher purses for the Breeders' Cup World Thoroughbred Championships. The question was not so much the increased fee, but whether the National Thoroughbred Racing Association, which receives two-thirds of its budget from Breeders' Cup, was operating with fiduciary efficiency. The nominators felt that if they were being asked to foot more of the bill, then the question and challenge were valid. What followed was a series of meetings at the Breeders' Cup offices with the constituents requesting certain information to bring clarity to the question. The discussion points submitted were: - The group expressed concern over the current relationship between the Breeders' Cup board and the NTRA board. The concern was that there was an unequal level of representation on the NTRA board relative to the Breeders' Cup financial commitment to NTRA. - The proposed NTRA Strategic Plan for the next five years was met with skepticism. The key issues raised were the lack of clear, measurable goals in relation to how the plan would increase purses, simulcast, on-track handle, attendance, and TV ratings. There was also the concern that contributions by member tracks in relation to their benefits were out of balance at the expense of the Breeders' Cup. - The attending group questioned the net financial benefit of the TV purchasing/advertising sales program and sponsorship. It appeared to the group that we were spending more to secure the TV time than we earned in advertising sales. Also, it was questioned whether the current TV model resonated with the viewing public to create additional fans, attendance, handle, and ultimately, larger purses, which is part of the Breeders' Cup mission statement. - A request was made for the board to explore the goal to make the 2006 Breeders' Cup day a $20-million purse event. Additional money required would be reallocated from existing funds to match the increase in stallion nomination fees. Continuing meetings culminated in a request for the Breeders' Cup board and management to continually evaluate each cost/profit center for efficiency and effectiveness and a request to seriously explore how to make 2006 Breeders' Cup day a $20-million purse event. A recommendation was also made to form a committee to evaluate governance issues.
The new governance by-laws have been instituted, and I applaud all Breeders' Cup board members and staff who worked together to make this happen. The question of the $20-million Breeders' Cup day has not been resolved, but is being explored. I'm confident it will happen. All of us who participate in this wonderful industry have worked hard to grow our own businesses. It is difficult and foreign to our nature to tolerate waste and inefficiencies. One of our greatest resources is the number of successful and highly talented individuals who have come into our industry. They possess the variety of experience and skill sets we so desperately need to provide the vision to compete with the other entertainment industries. They must be encouraged to participate. We must run the Breeders' Cup and NTRA with good, accountable business practices, and board members have a responsibility to require it. The Breeders' Cup is our crown jewel and its assets and revenues cannot be wasted. The Jan. 8 board meeting marked a turning point and I am optimistic about our ability to formulate innovative solutions to the extensive list of challenges we face. It will require hard work, commitment, and all of us coming together for the common good. A wise man once told me great things are accomplished by addition and multiplication, not by division and subtraction. I suspect John Gaines has been watching the process unfold and I am confident he is smiling with approval. He just wants it to be run like a business.