Tuesday, May 18, 2010

They are off ... and losing

The story seemed to be the latest in a string of bad news.

"The New York Racing Association is running out of money and may have to shut down in less than three weeks, the day after the Belmont Stakes. One leading horseman described the situation as 'catastrophic' and said that even Saratoga -- the jewel
of New York racing -- could be threatened by the turmoil," read the report from The Associated Press.

New York Governor Paterson promised some stop-gap funding today, but pretty clearly horse racing continues to struggle.

For those with long memories, or who at least know a little history, stories like these are about 50 years in the making. Horse racing was covered like a sport in this country until the 1950's and 1960's. Newspapers had daily coverage of local tracks, and magazines highlighted the top races. It had been that was for decades.

Slowly but surely, everything changed. What happened? Plenty. Television was a major factor. Horse racing never could figure out how to use the medium as a promotional device. Indeed, the "marketing departments" of tracks had trouble doing much more than opening the gates. The audiences grew greyer, and young people never caught the habit. Off-track betting was designed to help the inevitable financial crunch, but it's easy to wonder if that was in the long term interests of the tracks. You don't have to go to the track any more, and park your car and eat, while betting. And you can bet at the best tracks and skip the ones with bad horses.

Then came the gambling explosion of the last 15 years or so. There are all sorts of lotteries, of course. It's tough to go to a metropolitan area without some sort of casino nearby. Buffalo has a few within driving distance. Betting the horses takes some work; it's not a case of pulling a lever and hoping three lemons come up in a row.

The sports media also has plenty of demands these days. Think of how football, basketball and hockey have grown in a half-century. Outside of the Triple Crown races and maybe a couple of others depending on the region, news outlets don't see the point in covering racing as a news event.

The race tracks have tried to level the playing field by getting slot machines on their property, and have done some marketing efforts. They have added some revenues into the pot and subsidized the racing operation.

Still, there are so many leisure dollars to go around, and states are having trouble coming close to balancing their budgets. The thought struck me that at some point, the government-related tracks are going to wonder why they need to keep a money-loser alive, instead of just keeping all the revenue from the money-producing end of the business.

In other words, how many more stories about possible track closures are we going to see in the months ahead?

Some great writers can wax for paragraphs about the beauty of the race track, particularly at sunrise when the horses go out for workouts. There are all sorts of characters and stories around the track, and it can be an interesting place to spend an afternoon. Go to Saratoga some day in August, and you'll find yourself in an atmosphere that resembles a county fair of the 1890's.

On the other hand, walking into most races tracks that features an unfilled grandstand is an almost spooky experience. It feels like walking into Memorial Auditorium just before it was demolished.

There are no guarantees in life, particularly in the business world. It's adapt or die, and the process can be painful to watch -- particularly as we reach the finish line.

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