NEWS
Breeders’ Cup expands
as the industry contracts
Posted: Wednesday, December 09, 2009 5:00 PM
GREG AVIOLI
Breeders’ Cup Ltd. President Greg Avioli joined the horse racing industry workforce in 1998 as general counsel and vice president of business affairs for the National Thoroughbred Association.
In eight years with the NTRA and 3 1/2 years with the Breeders’ Cup, including nine months as interim chief executive and the past 2 3/4 years as president, Avioli saw the racing and breeding industries at the height of its growth with records in handle and purses in recent years.
The Breeders’ Cup grew, too, expanding into a two-day event in 2007 and to 14 championship races in ’08. In 2006, the Breeders’ Cup was a one-day event with eight championship races.
Now that the sport faces a certain contraction moving into the second decade of the 21st century, Avioli does not see the Breeders’ Cup contracting with it. Thanks to international marketing efforts, an agreement with ESPN through 2014, and changes to the nominator and Breeders’ Cup stakes program, Avioli still expects the Breeders’ Cup to develop positively as a brand and as American racing’s premiere racing event in the second half of the year.
The full Breeders’ Cup Ltd. Board of Directors will meet on Friday to discuss the organization’s short- and long-term plans. Avioli answered THOROUGHBRED TIMES questions in advance of the meeting.
THOROUGHBRED TIMES: What is your assessment of the back-to-back experiment at Santa Anita Park in 2008 and ’09?
Greg Avioli: The Breeders’ Cup World Championships was again a bright spot for our entire industry in an otherwise difficult year, and Zenyatta’s performance [in winning the Breeders’ Cup Classic (G1)] was the icing on the cake. Back-to-back years at Santa Anita played a big role in the overall success of the event. With two consecutive years in the same market we saw some impressive increases in our operating results including an 11% increase in attendance to over 96,000, total wagering on Championships races up 3% (in a year of double digit declines in national handle), and a record 34 international starters. On every level, Oak Tree and Santa Anita have been tremendous partners for the Breeders’ Cup.
TT: No horse that made its last start on dirt won a Breeders’ Cup race in either of the last two years. How do you feel about that? Will it affect the board’s decision as to where the event is held in the future?
Avioli: It’s a concern, but I think people who want to make one side of the argument forget about horses like Midnight Lute who won the 2007 [TVG Breeders’ Cup] Sprint (G1) on a sloppy dirt track at Monmouth [Park], the ’08 [Sentient Flight Group Breeders’ Cup Sprint] on Pro Ride at Santa Anita and on the dirt at Saratoga in between. And two years and a limited number of races is probably not large enough a sample to reach definitive conclusions. Our main concern is that tracks have safe and consistent surfaces whether synthetic or dirt. By that standard, the racing surfaces at Santa Anita were excellent. We will be back on dirt at Churchill Downs in 2010. It is still early in the life cycle of synthetic surfaces and our board is keeping an eye on this, as well as an open mind.
TT: TV ratings have decreased since the event moved to ESPN. What other metrics would you use to describe the event as a success on ESPN?
Avioli: It would be great if ratings were up but if you take a deeper look we had 17-million people tune-in and the average time spent watching over the two-day, eight-hour telecast was more than an hour. Ratings are only part of the story in our partnership with ESPN.
ESPN provides literally millions of dollars of promotion for horse racing to a young male demographic that our sport needs to reach. As just one example, they ran 300 spots promoting the event in the days leading up to it. This is real value for the Breeders’ Cup and the sport as a whole, and we factor that into evaluating our overall partnership.
TT: The Breeders’ Cup has most often been in Southern California, Kentucky, and New York. What are the individual strengths and weaknesses of those markets? Will the Breeders’ Cup ever return to a market outside those areas?
Avioli: One of the primary purposes of our ongoing strategic planning process is to develop specific criteria to use in determining where the Championships should be held after 2010. This will be one of the major points we will address in our December board meetings. Santa Anita, Churchill Downs, and Belmont Park have hosted the most because each has demonstrated the ability to put on a world-class event.
TT: Would you support a system in which Breeders’ Cup results weigh heavily in Eclipse Award voting?
Avioli: The [National Thoroughbred Racing Association], the National Turf Writers [Association], and Daily Racing Form do a commendable job with the Eclipse Awards and we’ll leave it to them to set the voting criteria. History shows that the Breeders’ Cup has always played an important role in determining the year-end divisional champions. As we continue to grow in stature as the defining season-culminating event, I would not expect that role to diminish.
TT: Breeders’ Cup made concerted pushes this year to increase the event’s stature among celebrities. With the event moving to Churchill in 2010 and potentially Belmont Park in 2011, what strategies are in place to continue building that stature away from the L.A. market?
Avioli: It was the right strategy for L.A. How much we do with it moving forward will depend in some part where we are. The entertainment community embraced the event over the last two years.
It was great to have people like Clive Owen and Dennis Hopper, who are true fans who know the sport, and we had actors and actresses from TV shows like "Boston Legal," "Criminal Minds," "Curb Your Enthusiasm," "Dancing with the Stars," "Desperate Housewives," "Entourage," "Grey's Anatomy," and "Lost." It’s not just that they came—one of the benefits is the coverage they generate for the event in the entertainment media, places like "Access Hollywood" and some of the magazines.
Elizabeth Banks talking about the Breeders’ Cup on Jay Leno’s show is a good example. Those things expose us to a broader audience and enhance the Breeders’ Cup brand.
TT: Revenue likely will decrease from the nominating program as stud fees and mares bred decrease. Does Breeders’ Cup have a plan in place to make up this revenue elsewhere or will cuts be made?
Avioli: One of our top priorities over the last few years has been to increase Championships and sponsorship revenues so as to decrease the organization’s long-term reliance on nominations. We’ve had some success in this area with total championships and sponsorship revenues of $107-million over the past four years, compared with $74-million from 2002-‘05.
Still, we’re sympathetic to nominators, especially in these challenging times, and we’re looking at different possibilities. This is another topic that we’re taking a hard look at as part of the strategic planning process.
TT: Is Breeders’ Cup more likely to reduce purses across its entire two-day event or cut races? What benefit(s) has Breeders’ Cup realized from adding so-called specialty races to the program such as the Marathon, Dirt Mile, and Turf Sprint?
Avioli: The expanded two-day, 14-race format has delivered some real benefits. Out of thin air, Championship Friday has become one of the top five total handle days in North American racing. More horses from all over the world are running for higher purses and handle continues to grow each year, defying industry trends. Prior to 2007, Breeders Cup generally had between 90 and 100 horses running in the Championships. With the expanded format that range is now 140-150, giving more opportunity for our nominators to participate on racing’s biggest stage. Ultimately, we will look at the number of races at the board level and gauge what’s working and what can improve.
TT: Even in this time of economic downturn, the Breeders’ Cup has been bold in its quest to grow the event. Do you expect that emphasis on growth to continue or will the next few years be more about maintaining current levels?
Avioli: If the Breeders’ Cup is to continue as one the world’s great sporting events we must continue to grow and innovate. This could take other forms [besides] adding Championship races or increasing purses.
For example, we are considering how we better link the Championships with horse racing’s “regular season,” potentially broadening of the entertainment aspects of the event along the lines of the [Emirates Airline] Melbourne Cup (Aus-G1), enhancing partnerships with wagering partners, and more aggressive marketing, particularly in the social media area where we made some real gains this year.
TT: Where do you see potential for handle growth? Solely overseas? How might the success of European-based horses the last two years factor into that equation?
Avioli: This year we were up 30% in our international handle on the Championships and as we continue to attract horses from outside the U.S., handle should follow. While the $85-billion international market remains an important long-term growth opportunity, there is still real wagering upside here. Research over the past few years indicates that there are as many as 20-million racing fans in the U.S. We’ve got to tap into more of those people, whether through our wagering and simulcast partners, by building interest and avidity prior to the event, and through new media and traditional media. There is growth potential with this target group.
TT: What do you hope the Breeders’ Cup big storylines will be next year, in 2015, in 2020?
Avioli: That we are true to John Gaines’ mission, that the property continues as the defining international event in horse racing, that we have grown wagering handle and the audience for the sport here and abroad, that we continue to lead the way on integrity issues, that we embody the best our game has to offer and, as a result, we encourage people to continue to invest in Thoroughbred racing.
