For photos from the Meadowlands contact

Sunday, September 16, 2012

Contraction is the Only Long Term Solution

As Dean Towers commented on in Friday's Harness Racing Update (page 4), one of the biggest problems racing has is it isn't run as a typical business.  In fact Tower's analogy of a Soviet-era zinc mine was spot on; producing zinc at twice the value it was worth thanks to the government subsidizing its production.  Like that zinc mine, the number of races being run is based solely on the support of subsidies.

Of course, before racinos came along, harness racing was run as a business.  Tracks either cut back their purses, schedules, or even closed their doors if they bled red ink.  Now, with racinos, those tracks are able to continue to race for generous purses even though there are few customers out there wagering on their races.  The racino tracks don't like it but since they are being paid (via being allowed to have slots) to put on a flawed product they keep on going.  Horsemen and owners enjoy it because they keep on racing, earning nice livings despite the fact purses are not based on reality; what the product is inherently worth through the handle. 

The worst thing about this is the delusional attitude of some who proudly exclaim the horse racing business is doing well.  Go ask breeders, who are a true indicator of how the breeding business is doing, how strong the racing industry is and you will hear a different story; a story of breeders closing up shop, drastically changing their business model, or watching their profit margin being whittled away year after year.

Removing the breeders from the conversation for now, and we see what harness racing's business model is.  Race as much as possible and fight like hell if someone looks to take away or cut the slot revenue for purses.  Keeping a subsidy does not make a business plan.  A business plan looks forward at the market and adjusts accordingly in an effort to maximize profit.

Sooner or later, the industry is going to have to accept reality which is the industry needs to contract, reducing the number of races dates and races.  But it goes further, there needs to be coordination of race dates so tracks are not competing against each other by racing at the same time.  In other words, not just contraction is coming, contraction must come. 

Tracks will have to close; not necessarily as many as some may think.  By coordinating race dates and running boutique meets, tracks will be able to put on a solid racing product thanks to purse funds earned during dark dates at tracks.  With racing occurring for brief periods, interest will grow somewhat as racing will go from the never ending race meet to the special event it needs to be.  Harness players who avoid certain tracks because there is another option will return to the less favorable tracks as the alternative track option may not be available.

We would be remiss if it was not mentioned with fewer racing dates, contraction will have a human cost.  With fewer tracks racing at the same time, there will be too many trainers and drivers in racing.  As what happens when there is an over supply of labor, those better at their career choices will remain active in the sport while others will be forced to seek employment elsewhere, seeking out new careers.  I don't say this glibly as I know for many racing has been a way of life and such displacement will have a huge impact on lives. 

The question is not if, but when contraction will occur.  Racing can bite the bullet and contract at a leisurely pace allowing a gradual transition of people out of the sport or risk a Quebec-type collapse which will push everyone out at the same time in a manner which would be more disruptive to its participants.

The time has come for state racing commissions to cede race date allocations to an independent organization, such as a Harness Racing USA which will begin the process of scheduling race dates in an effort to reduce conflicts, gradually reducing race dates over a period of five years which would allow for the maximizing of revenue for each race date possible.  Instead of having five tracks racing at the same time each night, work over a period of five years so there would be no more than two tracks racing in the same time frame.

Make no mistake, contraction alone is not a business plan.  Reducing takeout, changing the racing experience will also need to be addressed to make racing a better gambling experience.

Finley Calls for Saving WEG at all Costs -  In Sunday's HRU, Bill Finley calls for the province to save racing at WEG at all costs and for only keeping one 'B' track racing.  While I agree with Bill Finley’s comments that the Ontario standardbred industry can only survive with the WEG circuit (which may end up being only Woodbine) being strong and vibrant, I disagree as to the extent the support should be favored in WEG’s favor. As much as WEG needs to be top dog in the province, there is no reason why purses there can't afford to decline a little more than being suggested; say 75% of the current purse levels for overnight races.

I believe there is room for more than one 'B' track to survive. Let the racing industry in Ontario shut down from Thanksgiving until March 1st as done in the old days and have WEG race three or four days a week the balance of the year. Have five of the 'B' tracks survive and create a circuit, permitting each of them to race one month a year starting May 1 and ending September 30 on WEG’s standardbred dark days (no more than three days a week) so there is no standardbred competition within the province. Which of the 'B' tracks should survive? Those tracks who have attempted to increase interest in harness racing such as The Raceway at Western Fair District should have first shot will those tracks which didn't invest in their racing product should be closed.

This proposal still allocates a majority of the standardbred purse subsidy which appears will be coming from the province while giving an amount to the 'B' tracks which allows racing for the second-tier horses as well as place for up and coming trainers, drivers, and even horses to learn their trade while still earning purses which are somewhat meaningful. This proposal also allows the tradition of racing throughout the province to survive, something which was noted as being important in the recent three member committee’s interim report.  Also, by having definite seasons at the 'B' tracks, it allows them not only to continue racing on a reduced schedule, it will allow them to use racetrack facilities for other entertainment options the other eleven months of the year. 

Harness racing has been a tradition in the more rural areas of Ontario for many years, to turn it solely into a ‘big city’ sport would ruin the character of harness racing in the province forever.  There is no doubt the character of racing will be changing, but every attempt should be made to maintain as much of the character it currently has as possible.

No comments: