I am sure that most of us in the harness industry read with interest Jeff Gural's HRU comments reflecting his frustration at the USTA's refusal to proceed with a survey of membership willingness to fund a new marketing initiative via a 5% withholding of purse monies.
While I sympathize with Jeff's frustration at failing to have the industry act as he wishes, I can not help but feel that Jeff, and his advisers, should reflect on their underlying business assumptions.
Until Jeff and other racetrack owners accept the reality that on track attendance – except for significant and well presented "Kentucky Derby" type special event days – is a thing of the past, and that profitability has to be earned from intelligent cost cutting of all on site expenses and overheads (except on "special event" days) combined with a massive push for expansion of wagering outlets and presentation of both a more exciting product and more interesting wagering platforms, financial success will be unattainable.
And if financial success for racetrack owners is unattainable, then the industry will be lost! Ultimately, governments and investors will reject business models that rely on parasitic carve outs from profitable enterprises only to support a non profitable one!
For this reason more than any other, I am frightened by Jeff's determination to seek marketing dollars for what I believe is a lost and misguided objective.
Significant funds are needed for figuring out how to broaden off site wagering, for analysis aimed at creating a more interesting product and betting options designed to appeal to a young, 21st. Century customer. Certainly, funds are needed for government lobbying and for efforts to fill special event days with celebrities covered by top draw video shows.
Reciprocal business tie ins that can broaden potential customer awareness of harness racing – both the on site experience of special event days, and the daily streaming of betting product – are essential, and a relatively untapped resource.
In summary of this point, I suggest that we need to understand what business model we will market before generating marketing dollars that will only be wasted trying to fit a round ball into a square hole.
For racetracks to make money they need to remake their business to meet the demands of the marketplace rather than waste time and money trying to reshape that marketplace to resemble that of gloried days of the past!
A few other comments on Jeff's frustrated perspective, prefaced by an acknowledgement that his efforts have been instrumental in keeping The Meadowlands, Tioga, and Vernon alive to this point.
It is not really fair to assert that racetrack operators, like Jeff, only participate in losing racetrack investments without also benefitting from the huge casino related profits that flow from racino gambling. In most cases, the casino operations were only enabled by state governments to try to assist racing, downstream employment, and agricultural interests by giving racetrack owners time to adjust to new business realities and to restructure operations in response to a changing business environment.
No government ever intended to fund endlessly a non competitive industry at the expense of other industries, investors, social causes, and societally necessary funding obligations that every day increasingly push government away from racing.
Jeff must understand that the government subsidy he desires can only be gotten thru presentation to government of a believable, intelligent, supportable financial/business plan showing a road to short/medium term profitability.
It is in support of developing that business plan that marketing dollars are needed, and it is the track owners who should be investing their funds in protection of their own investment!
It is also disingenuous for any track owner to suggest that racetrack owners suffering operational losses on the racing side are not being, or hope to be, more than salvaged by huge windfalls in the form of their overrides on associated casinos.
In Jeff's case, I can understand his frustration at mounting operational losses without certainty of eventual casino income, but that is the situation that he bought into.
Sadly, the Meadowlands has squandered quite a few years by failing to reinvent itself as needed to successfully address current market realities.
What may work at Tioga or Vernon, will rarely be a solution at The Meadowlands, and, quite simply, the product now being offered by The Big M is tired, stale, boring, and light years from the product that made the Big M what it was.
The problem isn't in getting the message to more people, the problem is in the message itself!
One last point. If Jeff gets casino rights and income, I doubt that racing has a direct, guaranteed % of participation tied directly to his income. Without that, Jeff's interests are not directly aligned with racing's, and it seems understandable that Jeff risks short term losses for long term, very large, returns.
Racing's participants, however, live in the present with a cynical, but likely accurate, perception that future casino profits will be so watered down by the time they trickle down to racing that the impact may well be minor.
I think that Jeff, on reflection, will realize that his frustration should not lead to punitive actions aimed at people just doing their best to make the best living they can – something that is well within their right.
If Jeff decides the risk/reward of continuing with racing losses in the hope of casino windfalls no longer makes sense, he is well within his rights to exit and shut down operations.
That would be a sad day for all, but harness racing, in some form, would continue to exist.
Sometimes a short term disaster is the wake up call that is needed to force appropriate change long deferred!
Perhaps if Jeff wants to cut back at The Big M, he might consider attempting to return the Big M to its roots by offering a compact 60-80 day meet of only stake races, late closers, and high class races June-September, 4 days a week. There would be little problem getting top drivers, sponsorships would be easier to maintain, and there would be a real quality product to market!
At the end of the day, Jeff, you can't ask the USTA and industry participants to undertake operational/management obligations that are yours', especially given the casino windfall that is the driving force behind your racing investment!
A windfall that will disproportionately fall to investors and operators….
Gordon Banks