Crossroads

It is probably an understatement to say that 2005 is going to be a challenging year for the National Thoroughbred Racing Association/Breeders' Cup. The direction and mission of the organization could be subject to change as it navigates crossroads on the near horizon.

The NTRA was created in April 1998 and combined operations with the Breeders' Cup Jan. 1, 2001. Tim Smith, a racing outsider when he took the job as NTRA commissioner in 1998, left the organization last summer. D.G. Van Clief, a founding member of Breeders' Cup management and very much a racing insider, was named to replace Smith as commissioner.

The NTRA's original mission was "to increase Thoroughbred racing's public awareness, fan base, total handle, and purses." Its main objectives were "the creation of a centralized national structure, the successful implementation of comprehensive marketing and television strategies, and the achievement of significant revenue increases and cost savings for the industry."

Some think the NTRA overcame long odds just to exist as long as it has, considering racing's dysfunctional structure. That is a tribute to the alliance-building resolve of Smith, who kept the organization together despite the actions and threats of many of its racetrack members to defect.

Racing has grown in the nearly seven years since the NTRA was formed. Annual purses in the United States are up 21% from 1998, when they totaled $904 million. Figures from The Jockey Club Information Systems show 2004 purses of $1.092 billion. There were fewer races run in 2004 than there were in 1998, so the average purse per race is up even higher, 26%, from $15,579 to $19,572.

Pari-mutuel handle has grown at a slower rate. Total wagering on Thoroughbred racing in the U.S. is up 16% from 1998-2003, from $13.1 billion to $15.2 billion (2004 figures are not yet available).

Surveys conducted by ESPN have shown a slow but steady growth in the percentage of people who consider themselves fans of horse racing. But stagnant or falling attendance figures at many tracks send a different kind of signal about racing's fan base.

The NTRA has used its expanded television presence on the ESPN networks and a branded co-op advertising campaign to build racing's fan base, but the co-op campaign is being eliminated in 2006. That policy change represents one of the NTRA's crossroads.

Co-op advertising--an incentive program that reimbursed the tracks in advertising dollars what they gave to the NTRA in dues--was one of the carrots in Smith's diplomatic cache. Without that program in place, some tracks may re-evaluate their membership in the NTRA later this year. Those tracks should recognize there have been and will be other membership benefits, not the least of which is the NTRA's increasingly significant lobbying presence in Washington, D.C.

Last year's elimination of federal taxes on foreign wagers will open the doors to international betting markets. It's doubtful that would have occurred without the NTRA's lobbying efforts. The NTRA and American Horse Council are working side by side on keeping interstate and online pari-mutuel wagering legal, something more than a few U.S. Senate and House of Representatives members have tried to shut down. That is a critical issue to every racetrack in this country.

NTRA/Breeders' Cup faces other crossroads, including a new television contract for the Breeders' Cup World Thoroughbred Championships and adoption of a new racing series, the Thoroughbred Championship Tour, endorsed by the Thoroughbred Owners and Breeders Association.

But nothing is more important than keeping the NTRA's membership intact.

Note: The original on-line version of this commentary mistakenly said the NTRA's co-op advertising program was eliminated in 2005; it will continue through Dec. 31, 2005.