BC contingency plan

[dilanesp]

Originally Posted by SandyW

Andy don't pay any attention to people that don't have any first hand knowledge of what NYRA wants to do. You are right there and I think that your knowledge is first hand.

Sandy, NYRA is a public organization and bids for the BC are a semi-public process. Indeed, if there were any real "insider info" here, Andy would not be allowed to say it.

I can see many reasons why the party line at NYRA is "sure we want the BC". But until they actually put in a real bid and the BC actually gives them a BC, my statement remains operative.

[Tom]

Originally Posted by Suff

2001 was a month after 9/11. Mulligan.

Excellent point, one I had forgotten.
People were not rushing to the airports in those troubling days.

Belmont would be, track-wise, the place to hold it.
Two turf courses, a big track that would take post position out of the equation, for the most part.

I have no idea how good the facilities would be that late in the year, never having been there, but I do know tht watching from my Lazy Boy at home, weather has never been a problem for me!

[the little guy]

Originally Posted by Tom

Excellent point, one I had forgotten.
People were not rushing to the airports in those troubling days.

Belmont would be, track-wise, the place to hold it.
Two turf courses, a big track that would take post position out of the equation, for the most part.

I have no idea how good the facilities would be that late in the year, never having been there, but I do know tht watching from my Lazy Boy at home, weather has never been a problem for me!

The weather argument has always been a specious one, as Churchill and Keeneland can have similar bad weather to NY, and as someone who has spent a lot of time at Keeneland, cold weather there is extremely problematic, worse than Belmont ( which isn't a great cold weather facility....something I am WELL aware of ).


The biggest "problem" in the last ten plus years is that the BC has started to focus a LOT more on hospitality ( not a criticism, just a fact ) and Belmont does not have some of the options they likely find necessary. When you couple this with the general inconvenience of any track hosting a BC ( you are essentially renting out your facility ) it becomes easy for both sides to walk away from each other ( look at Churchill, they built tons of hospitality for the Derby yet they haven't exactly clamored for the event in recent years ). TSG has been the one constant in wanting to host the event ( they like to claim a lot of things about their company that may or may not be true....something that is coming more to light recently ) and this works well for the BC, thus its frequency at Santa Anita. I can't argue with this, Santa Anita is a marvelous place, and the BC does work very well there. The problem with this however, is at least twofold. First of all, many of the participants are from the East Coast. Is it really fair that they should have to ALWAYS travel roughly three thousand miles for a year ending supposed Championship event that is supposed to have at least some overall neutrality? In a way, this is why Churchill ( more than Keeneland which I don't personally understand as a BC location, much as I appreciate it as a racetrack, but maybe that's just me ) seems like the "best" location for the horsemen....it's neutral, so to speak. However, given CA gets a frequent hometown advantage, in a way, it seems only fair for the NY contingency to get to stay home, at least now and again. The second problem are us, the fans. Why should East Coast fans be expected to ALWAYS travel a considerable distance to an event that is supposed to celebrate the year of racing? For these reasons, and others I'm sure, it will be great to bring the event back to Belmont in at least the relatively near future.


Breaking the success of a BC down to attendance figures is an indefensibly bad argument. Who knows what the actual attendance at these events really is....and, frankly, who cares? Should the people on the Hill, the parking lot, at Keeneland really count as attendees? Does anyone that went to Del Mar, and doesn't hand out business cards in emergency rooms, actually believe the numbers they reported? How about Santa Anita? I was there in 2013 and the figures they released defied logic. The point is that attendance numbers are in no way a real number used to determine the success of the event. Ticket sales for sure, but handle numbers will matter the most. Everyone on this board but one person basically understands that.


That's my long winded final thoughts on the issue. Thanks to the three of you that wasted your time reading.

[Tom]

If I can get to the rail, the bathrooms, and the bar, I consider that all the hospitality I need!

I'm in it for the racing, not the hats.

[Saratoga_Mike]

For the year ended 1/31/18 (meaning the 2017 BC at Del Mar), the BC generated $51.7 mm in total revenue, 15% of which was attributable to "host track contributions" (driven by ticket sales, concessions and on-track handle). Nomination and entry fees represented a little less than half of revenue. Simulcast fees accounted for about 24% of revenue. Net operating income set a record at $4.1 mm, up from approximately $400k the prior year (Santa Anita), primarly driven by better host track contributions and sponsorship/licensing fees.

Source: Page 22 of the BC 2017 Annual Report

In 2005, the last BC at Belmont, revenue totaled $35.7 mm,* (my calc) essentially flat from the prior year at $36.0 mm. Net operating income** (my calculation) was a negative $2.2 million. Relative to the 2017 Del Mar results, the net operating income may look lousy, but it needs context. NOI was a negative $3.5 mm*** and a negative $3.8 mm*** for the 2014 (Santa Anita) and 2013 (Santa Anita), respectively. In fact, sponsorship and licensing revenue has increased by almost $4 mm over the past five years. If we adjust the 2005 results for modern-day sponsorship revenue (assumes it was much lower in 2005--can't confirm), the net operating income results looks respectable.

*excludes interest/divi income and asset gains (my calc)
**note tax accounting and accrual accounting differ, due to timing and deductibility issues, among other things
***BC 2017 Annual Report

Source: Form 990 tax returns

[dilanesp]

Originally Posted by the little guy

The weather argument has always been a specious one, as Churchill and Keeneland can have similar bad weather to NY, and as someone who has spent a lot of time at Keeneland, cold weather there is extremely problematic, worse than Belmont ( which isn't a great cold weather facility....something I am WELL aware of ).


The biggest "problem" in the last ten plus years is that the BC has started to focus a LOT more on hospitality ( not a criticism, just a fact ) and Belmont does not have some of the options they likely find necessary. When you couple this with the general inconvenience of any track hosting a BC ( you are essentially renting out your facility ) it becomes easy for both sides to walk away from each other ( look at Churchill, they built tons of hospitality for the Derby yet they haven't exactly clamored for the event in recent years ). TSG has been the one constant in wanting to host the event ( they like to claim a lot of things about their company that may or may not be true....something that is coming more to light recently ) and this works well for the BC, thus its frequency at Santa Anita. I can't argue with this, Santa Anita is a marvelous place, and the BC does work very well there. The problem with this however, is at least twofold. First of all, many of the participants are from the East Coast. Is it really fair that they should have to ALWAYS travel roughly three thousand miles for a year ending supposed Championship event that is supposed to have at least some overall neutrality? In a way, this is why Churchill ( more than Keeneland which I don't personally understand as a BC location, much as I appreciate it as a racetrack, but maybe that's just me ) seems like the "best" location for the horsemen....it's neutral, so to speak. However, given CA gets a frequent hometown advantage, in a way, it seems only fair for the NY contingency to get to stay home, at least now and again. The second problem are us, the fans. Why should East Coast fans be expected to ALWAYS travel a considerable distance to an event that is supposed to celebrate the year of racing? For these reasons, and others I'm sure, it will be great to bring the event back to Belmont in at least the relatively near future.


Breaking the success of a BC down to attendance figures is an indefensibly bad argument. Who knows what the actual attendance at these events really is....and, frankly, who cares? Should the people on the Hill, the parking lot, at Keeneland really count as attendees? Does anyone that went to Del Mar, and doesn't hand out business cards in emergency rooms, actually believe the numbers they reported? How about Santa Anita? I was there in 2013 and the figures they released defied logic. The point is that attendance numbers are in no way a real number used to determine the success of the event. Ticket sales for sure, but handle numbers will matter the most. Everyone on this board but one person basically understands that.


That's my long winded final thoughts on the issue. Thanks to the three of you that wasted your time reading.

1. I will give you credit. This is a better post. At least you are now admitting that the BC felt NY tracks were not appropriate for their event, and that NYRA hasn't been bidding. In other words, my original point, that the BC and NTRA have not been on each other's radar screens and NYRA can't host in 2019, is true.

2. I share your skepticism of Del Mar's attendance numbers. I was there. The place was empty.

3. I share your skepticism of Churchill's numbers as well.

4. Santa Anita's 71,000 number for the 2016 Cup was a real number. I was there.

5. At any rate, there is no doubt SA and Churchill far outdraw Belmont at the BC, and CD does so even in bad weather (1988).

6. As Saratoga Mike points out the BC makes a lot of money on $200 tickets and overpriced souvenirs. So NYRA's inability to get people out to the track matters. At any rate, even if you think handle is all that matters, off tracks and bad weather hurt handle, so you would still want to avoid Belmont like the plague.

7. As for "fairness", this is silly. The Super Bowl is almost never held in a cold weather location. Why? Because customer comfort matters. Is that fair to the New England Patriots?

Some events are held at the same place every year, like the College World Series. Is the Rose Bowl fair to the Big 10?

Is the Triple Crown fair to California? Given horses based in our barns were the last three TC winners, maybe the Belmont Stakes should rotate to California. It would be more fair!

The BC is held late in the year, when California has nice weather and NY doesn't. So, like many other outdoor events that avoid NY in the late fall, the BC is best in California.

New York racing has plenty of wonderful properties, including America's most popular track (Saratoga) and the decisive TC race. It isn't unfair that late fall championship races should be held somewhere else. And obviously, the BC and, at least, the previous management of NYRA agrees with this because we aren't seeing any BC's there.

[Suff]

Originally Posted by Tom

Excellent point, one I had forgotten.
People were not rushing to the airports in those troubling days.

:

I went, & stayed @ Holiday Inn Wall Street, 2 blocks from WTC. It was still smoking. They were still looking for body parts. Breathing in lower Manhattan was still difficult. One of the guys I went with, non-smoker, had a cough for a week afterwards. Bad scene that I'll never forget.

[Saratoga_Mike]

Originally Posted by dilanesp

2. I share your skepticism of Del Mar's attendance numbers. I was there. The place was empty.

6. As Saratoga Mike points out the BC makes a lot of money on $200 tickets and overpriced souvenirs. So NYRA's inability to get people out to the track matters. At any rate, even if you think handle is all that matters, off tracks and bad weather hurt handle, so you would still want to avoid Belmont like the plague.

"Despite capping tickets sales at 37,500 people each day, Del Mar generated an all-time, two-day on-track wagering record of $25.2 million and the second highest ticket sales revenue number in history at $15.4 million."

"Growth in ticket sales in 2017 resulted from several factors including an increased availability of premium seating, the strong demand to attend Del Mar as a first time venue, and local support from the San Diego area."

Source: 2017 BC Annual Report

In 2005, Belmont's attendance was 54k, or 44% higher than the 2017 Del Mar number, yet DMR (2017) was able to generate great ticket sales. Therefore, I think you're discounting ticket mix too much (i.e., premium ticket sales/other amenities). Once BEL is on equal footing on this front, I suspect they will generate very respectable numbers, just as they did in 2005 (adjusted for sponsorship revenue).

[dilanesp]

Originally Posted by Saratoga_Mike

"Despite capping tickets sales at 37,500 people each day, Del Mar generated an all-time, two-day on-track wagering record of $25.2 million and the second highest ticket sales revenue number in history at $15.4 million."

"Growth in ticket sales in 2017 resulted from several factors including an increased availability of premium seating, the strong demand to attend Del Mar as a first time venue, and local support from the San Diego area."

Source: 2017 BC Annual Report

In 2005, Belmont's attendance was 54k, or 44% higher than the 2017 Del Mar number, yet DMR (2017) was able to generate great ticket sales. Therefore, I think you're discounting ticket mix too much (i.e., premium ticket sales/other amenities). Once BEL is on equal footing on this front, I suspect they will generate very respectable numbers, just as they did in 2005 (adjusted for sponsorship revenue).

You are ignoring the 3 other BC's in NY. All of which did a lot worse than 2005.

[Saratoga_Mike]

Originally Posted by dilanesp

You are ignoring the 3 other BC's in NY. All of which did a lot worse than 2005.

One was after 9/11. Could you please post the revenue and NOI for the prior two and put the numbers in context vs prior years? I don't have the information readily available. Given your assertion ("a lot worse"), I assume you do.

[dilanesp]

Originally Posted by Saratoga_Mike

One was after 9/11. Could you please post the revenue and NOI for the prior two and put the numbers in context vs prior years? I don't have the information readily available. Given your assertion ("a lot worse"), I assume you do.

I have live attendance figures, and they were in the low 40's- two of the lowest attended non-capped BC's. In Belmont's defense, I think they did better in per-capita handle in 1990 than Churchill had done in 1988 or 1991.

By the way, on another matter, raised by Andy:

Louisville's climate, though not wonderful, is much better than NYC's in October.

Louisville: average high, 70.1 degrees, average precipitation, 3.22 inches.

New York City: average high, 63.8 degrees, average precipitation, 4.40 inches.

So the weather is significantly worse in New York.

Last point-- 9/11 is an excuse for Belmont's crappy performance as a host of the 2001 BC. I went. The big problem is it was freezing cold and windy. I could literally only stand outside for 4 or 5 minutes to watch a race before scurrying into the inside of the structure and under a heat lamp.

Nobody showed up because it was an awful day in New York City-- which is the kind of thing that happens when they hold what should be a glorious day of racing in such depressing weather.

And that weather interferes with the hospitality events that Andy admits are important to the BC. How are you going to wear your beautiful sundresses and hats and sip margaritas in cold, windy rainy weather?

There are good reasons why Breeders' Cups aren't held in New York.

[Saratoga_Mike]

Originally Posted by dilanesp

I have live attendance figures, and they were in the low 40's- two of the lowest attended non-capped BC's. In Belmont's defense, I think they did better in per-capita handle in 1990 than Churchill had done in 1988 or 1991.

Louisville: average high, 70.1 degrees, average precipitation, 3.22 inches.

New York City: average high, 63.8 degrees, average precipitation, 4.40 inches.

So the weather is significantly worse in New York.

For 1990 and 2001, Belmont attendance was 51,236 and 52,987, respectively, not the low 40s. The number was 37,246 in 1995.

Total handle by year:

2001: $104.1 mm vs. $108.6 mm in the prior year
1995: $65.8 mm vs $79.6 mm in the prior year* (bad weather)
1990: $56.8 mm vs $57.5 mm in the prior year

*only this year qualifies as much worse

There's no question that So Cali and even L'ville have a weather advantage over NY.

[the little guy]

There are also significantly more BC races now than when it was last at Belmont. Two days as well as opposed to one when last in NYC.

[Saratoga_Mike]

Originally Posted by the little guy

There are also significantly more BC races now than when it was last at Belmont. Two days as well as opposed to one when last in NYC.

Agreed.

I also suspect the CD attendance numbers are padded by cheap-seat sales, but I'm speculating (I don't have detailed financials for the years CD has hosted).

What are the odds of Saratoga ever hosting the event? I always thought staffing Saratoga in late Oct/early Nov was a bigger impediment (cost prohibitive/not possible) than the weather, but I'd love to be proven wrong.

[the little guy]

Originally Posted by Saratoga_Mike

Agreed.

I also suspect the CD attendance numbers are padded by cheap-seat sales, but I'm speculating (I don't have detailed financials for the years CD has hosted).

What are the odds of Saratoga ever hosting the event? I always thought staffing Saratoga in late Oct/early Nov was a bigger impediment (cost prohibitive/not possible) than the weather, but I'd love to be proven wrong.

The odds are zero.

Everything about reopening Saratoga for two or three days in late October/early November is so ridiculously difficult, that despite the cries of some people, it can never and will never happen. The chances that it isn't freezing at least later in the day are about zero, along with the fact that there are basically no indoor areas, are just some of the problems. There are five thousand total seats and nowhere to put up temporary seats. Remember most of the big Summer crowds are in the backyard, which is fine in July and August but silly for a BC Day, at least at a significant level. Plus, the expense would be enormous. Just reopening the plant is unreasonable, including getting the surfaces prepared. I get it, it sounds wonderful, but frankly given that the trees are bare by then, it wouldn't even be particularly ascetically pleasing.

...and, yes, staffing it would be extremely hard at the races and in town. There is nothing even remotely feasible about it in reality. Nothing.