Business
Pricing
Tom LaMarra on simulcasting fees and Churchill’s recent takeout hike:
I’m no math whiz, so correct me if I’m wrong. In the case of Churchill, if its host fee remains the same, a rebate shop and its customers get to keep the extra 3 percentage points when the exacta takeout goes from 19% to 22%.
If you operate a rebate shop or are a large importer of simulcast signals, higher takeout is money. That may explain why racetracks, rebate shops, and [ADWs] don’t complain about 30% trifecta rakes: If they pay the sender 3% for the signal, there’s 27 cents per dollar to play with before taxes.
Matt Hegarty on how those cents might get shared:
If simulcast rates do not go up at the same rate as the takeouts, then some players may not feel the full impact of the hikes. Many account-wagering operations, including Churchill’s mammoth twinspires.com and an offshore site the company bought several years ago, offer rebates to players, and some sites may elect to forgo the additional revenue to increase the rebates to their players on the Churchill signal. Many rebated players, including those who use automated systems employing algorithms to determine their wagers, are highly sensitive to takeout rates.
Keeneland Gains
The two-week Keeneland September yearling sale closed on Sunday, and to the relief of those involved in the business of breeding and selling horses, it closed with gains. “I mean, you have to be happy with it overall,” a consignor told the Blood-Horse, “considering everyone was going into it with grim prospects.” Reports the Thoroughbred Times:
Total sales, average price, and median all rose compared with the 2009 September sale, and the buy-back rate improved from 27.5% to 26.7%. Keeneland reported 3,059 yearlings as sold from 4,174 offered for $198,257,900, a 3.3% increase from $191,869,200 in total sales a year ago.
“It wasn’t a home run,” notes the Daily Racing Form. “But the Keeneland September yearling sale … posted solid returns that may have signaled that the bloodstock bust is over.” And it did so with sharply reduced spending by the Maktoums, points out the Paulick Report.
Whew. Everyone feeling a little more hopeful now?
Of the young sires, Bernardini was the standout, with 31 yearlings selling for an average of $199,323, a gross of nearly $6.2 million (numbers via). While I haven’t missed noticing that Bernardini’s first crop runners have been doing exceptionally well, I only noticed yesterday that he’s already an omnisurface sire, with winners on dirt, turf, and synthetics. His offspring have also either won or placed in group or graded stakes on all three surfaces. Interesting.
Is it too early to start talking about possible 2011 buzz babies? Here’s a 2009 filly to watch for, a half-sister to Zenyatta by Bernardini.
A Perma-Site for the Breeders’ Cup
Kentucky Derby-winning owner-breeder Bill Casner is the latest to take up the argument advocating Santa Anita as a permanent site for the Breeders’ Cup. In a column for the Blood-Horse, he hits all the major points — weather, media market access, facilities, financial advantages, the global racing calendar — and concludes pragmatically:
The time is right to make Santa Anita the permanent venue. It is the correct business decision for the Breeder’s Cup event and the future of our industry.
I’ve refrained from commenting on the BC site debate so far, since it’s not one for which I can claim — or expect much assumption of — objectivity. I’ve done some work for the Breeders’ Cup, I welcome any reason to visit Santa Anita, and it’s probably fair to say I’m pro-synthetic surface. But there’s something about the tone of Casner’s piece that signals whatever the discussion among the BC board members, of which Casner is one, about whether to select a permanent site or establish a rotating site schedule, it’s over — all that’s left is coming to an agreement with the likely permanent host site.
So, what will it mean for American racing if the Breeders’ Cup settles at Santa Anita? The game will be more international (in wagering and participants), the event will attract more media attention (as it did this year in earning Emmy and SBJ award nominations). Forget talk of a “civil war,” especially if Santa Anita remains synthetic; there’s too much money and prestige at stake for the most recalcitrant owners and trainers to hold out for long. It will be a major change, but one with real potential for growing the game.
I don’t have much strong feeling about what the BC board seems on the verge of announcing, except on the matter of which track — and in that, they’ve made the right call, if Santa Anita is indeed their plan. There are many arguments for choosing Churchill, arguments not to be dismissed lightly. But, if Churchill Downs were to be named the permanent site, I’m certain that years from now we would look back in regret, pinpointing the decision as the moment the game became irrevocably marginalized, not only internationally, but within the US. Move the Breeders’ Cup to Louisville, and Churchill would become synecdoche for the two biggest events on the calendar, transforming racing from a national sport (niche as it may be) to a regional spectacle. No thanks, to that future. I’d rather see the Breeders’ Cup take a shot at global relevance and a mass audience in the glorious California sunshine.
Significant Support
8/20/09 Update: Much, much more on the Saratoga numbers, from Steve Zorn. “The Saratoga sale’s success masks some serious problems, and does nothing to address the weakness in the thoroughbred industry.”
How much did Sheikh Mohammed and the Maktoum family support the recently concluded Fasig-Tipton Saratoga select sale? By quite a bit more than acknowledged, according to Bill Oppenheim’s estimate in today’s TDN:
While no one seems to want to admit it publicly (they buy for “unnamed principals who don’t want to be identified,” or some such doubletalk), everybody knows a number of European trainers and agents are employed to sign for horses which end up racing for Maktoum entities. My entirely unofficial and unverifiable estimate is that seven other agents or trainers were signing tickets on their behalves, and their actual purchases consisted of about 37 yearlings totaling around $20.5 million in sales. That would represent 18 percent of the horses sent through the ring, and 39 percent of the money spent. I’ll bet that closer to the truth.
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Jessica Chapel writes and edits in Massachusetts. Railbird is a Thoroughbred horse racing blog published from June 2004 to July 2019. More / Contact
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