rachel

rachel

Thursday, April 15, 2010

Are the Clouds Parting?

Alex Waldrop
is president and chief executive officer of the National Thoroughbred Racing Association. Send Alex your thoughts and comments using the Comments button below, and check back often for new blog entries.

The release by Equibase of Thoroughbred Racing's Economic Indicators for the first Quarter of 2010 was no cause for celebration. We continue to see declines in handle - about 10% so far this year when measured against 2009. And purses declined about 10% so far this year vs. last year and the decline is steeper this year than last when purses dropped “only” 5.7%. So, at first blush, it looks like we are continuing to see steep declines even though the broader economy is showing some signs of recovery.

But I think it is necessary to consider one more number included in the Equibase release – the decline in the number of races run so far this year. You see, inclement weather and a reduction in racing dates at in key markets resulted in a 9% decline in races so far this year when compared to last. It is possible (though hard to prove) that the handle and purse declines so far in 2010 are largely a function of fewer wagering opportunities for horseplayers -- that in real terms, we are about even with where we were at this time last year.

What this may mean for racing is that the declines we have been seeing for the last three years may have bottomed out.

Similar signs are evident in other parts of the business. Keeneland's April Two-Year-Olds in Training Sale saw increases in the number of horses sold, gross receipts and median price (up almost 15%) while the buy-back rate decreased 16%. OBS' March sale and Fasig-Tipton's Calder sale showed similar results – nothing earth shattering, but a break from the steady declines of the past few years. And betting was up 22% on the Dubai World Cup program as compared to last year, and by 9% for the Dubai International Racing Carnival even though the Carnival consisted of one less day this year than in 2009. Factoring in the one day less of racing, Carnival handle grew by 17% per day.

Here in the office, our NTRA Advantage program is seeing significant increases in sales for the first time in more than two years as more and more people rely on the savings offered to NTRA members by industry partners like John Deere, Sherwin-Williams, Office Depot and UPS.

The broader economy is likewise beginning to level off. The most recent jobless numbers are showing signs of stabilizing for the first time in more than three years. According to the U.S. Bureau of Labor Statistics, while the jobless rate has stabilized at 9.7%, 162,000 jobs were added to the U.S. economy in March. At this point in 2009, we had already lost more than 2 million jobs nationally. And housing prices seem to be stabilizing. These broader numbers are, likewise, nothing to cheer about, but they provide hope that things are looking up.

Whether we're talking about owners, breeders or bettors, so much of our industry's financial vitality is predicated on the availability of discretionary income. Perhaps a few rays of springtime sunshine are finally peaking through the dark clouds of a long, difficult winter for many in this country – and this business.

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