Breeders Cup Suspends Stakes Program

[Spotted Pony]

:eek:Breeders' Cup Suspends Stakes Program

By Lenny Shulman
Updated: Friday, December 12, 2008 3:12 PM
Posted: Friday, December 12, 2008 3:12 PM
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Breeders’ Cup officials have decided to suspend the entire Breeders’ Cup stakes program for 2009, according to a memo sent to racing secretaries, stakes coordinators, and officials Dec. 11.
The memo, from Breeders’ Cup senior vice president of operations Pam Blatz-Murff, said that the organization was projecting a reduction in overall Breeders’ Cup revenues of more than $10 million next year due to the global economic downturn and a likely shortfall in nominations revenue. It goes on to state that in order to maintain the Breeders’ Cup Championship purses at their current levels, television and marketing spending will be slashed by more than $5 million. In the last two years, the Championships have expanded from one day to two, and from eight races to 14.
Previously, according to the memo, the Breeders’ Cup had committed to allocating funds for 2009 races, but now those allocations are suspended.
Blatz-Murff would not comment pending an expected release from Breeders' Cup

[Glimmerglass]

Just so folks know what this program was:

Breeders Cup Stakes Program (http://www.breederscup.com/stakes.aspx)

In Breeders' Cup Stakes program races, Breeders' Cup nominated horses run for the total purse. Non-nominated horses compete only for the purse money provided by the host racing association. Breeders of nominated runners that finish first, second or third in a Breeders' Cup Stakes program race also receive nominator awards.

Essentially it's a little extra money at tracks around the US and Canada to fatten up the purse money of select races - and only paid out to horses who are Breeders Cup nominated and are successful in those enriched races.

In 2008 that extra cash was over $25 million so we're not talking just a little bit of change!

IMHO it seems a bit premature to slash the entire program for 2009. I'd think they could scale it back for a year.

[Linny]

Glimmer is correct, this impacts the races run through the season with the "Breeders' Cup" title added. You may have been to the track and seen a race with "BC" in the title, ie. The Fair Grounds Breeders' Cup Stakes. BC boosted those purses for nominated horses. It was alot of money of the course of the year.

[Laurierace]

Well my chances of making it to the breeders cup championship are pretty slim. The chances of making it to a now defunct regional breeders cup race were much better I would think. I wish they had announced this BEFORE we had to send our $500 in. Asshats.

[LaurieB]

I wish they had announced this BEFORE we had to send our $500 in. Asshats.

I'd imagine that was the whole point of announcing it now, after the deadline. :(

[KBEquine]

Well my chances of making it to the breeders cup championship are pretty slim. The chances of making it to a now defunct regional breeders cup race were much better I would think. I wish they had announced this BEFORE we had to send our $500 in. Asshats.

Yeah! :mad:

First they announce they're running twice in a row at the same track on synthetic, meaning true dirt horses are out of luck, and then they take away the races most small or regional breeders aspire to.

They've pretty much taken away all my incentive to nominate.

[Glimmerglass]

Additional impacts include TV coverage (excluding HRTV/TVG) taking a hit too it appears:

per the Paulick Report (http://www.paulickreport.com/blog/breeders-and-cup-clash-over-stakes-program/)

The Breeders’ Cup press release failed to disclose that the non-profit organization has lost approximately $11 million in the stock market this year and that its cash reserves have declined by more than 25%, from $40 million at the beginning of 2008 to less than $30 million today.

To help meet the budget reductions, Avioli said, marketing costs for the “Win and You’re In” Breeders’ Cup Challenge Series have been cut from $6 million to $2 million. “That means no national media this year,” he said, “no inserts in major publications. We eliminated all the mid-year ABC telecasts and we are down to two shows on ESPN in the fall, four and five weeks out from the championships. That saved us $500,000.”

Just my opinion but back in the day it seems to me the very wealthy of this sport, who have enjoyed many years of a gravy train, would've stepped up to fund this relatively small gap of money. We're not talking $1B here - the amount of money the organization is down by is relatively just 1 Green Monkey!

[LaurieB]

Just my opinion but back in the day it seems to me the very wealthy of this sport, who have enjoyed many years of a gravy train, would've stepped up to fund this relatively small gap of money. We're not talking $1B here - the amount of money the organization is down by is relatively just 1 Green Monkey!

:lol: :lol: :lol:

[WhiteCamry]

How did racing cope after the '29 Crash? I've heard they slashed a good many of the purses but did many races fall off the calendar altogether?

[LaurieB]

Here's Rob Whiteley's response to the BC announcement. It pretty much says it all:

http://www.paulickreport.com/blog/major-breeder-calls-for-breeders-cup-resignations/

[Glimmerglass]

How did racing cope after the '29 Crash? I've heard they slashed a good many of the purses but did many races fall off the calendar altogether?

I cannot speak to the Great Depression era but in the context of 2008 ....I've only seen a few races being outright cancelled and in the following case it isn't completely due to the economy but rather past disputes which have lead to reduced funds. Example,

Calder Cancels Three Graded Stakes (http://racing.bloodhorse.com/article/48420.htm) - that is not a good thing as graded races are of course hard to come by and typically are keys to bigger draws and larger wagering.

Those cancelled races - none of which I believe were Breeders Cup Stakes races so this is more of an aisde:

..the $100,000 Stage Door Betty Handicap (gr. III) and $100,000 Frances Genter Stakes (gr. III) on Dec. 27, and the $100,000 Tropical Park Derby (gr. III) on Jan. 1.

“Unfortunately, we have to take this action to lessen the overpaying of purses and to help balance the purse account,” said Kevin Flanery, senior vice president of Churchill Downs Incorporated, Calder’s parent company.

[Laurierace]

The more I think about this, the madder I get. I think there has to be a way to get a class action lawsuit going. I paid this year's fee via credit card. I wonder if I can protest it through them for misrepresentaion or something along those lines?

[SleepyFox]

It is especially annoying that this comes on the heels of them increasing the card for the Breeders Cup Championship races. Why not return the Championship races to the old format and put some of that money back into the other stakes? Plus, this move seems to be destined for failure because I find it hard to believe '09 nominations (for both stallions and foals) won't take a serious downturn.

[Linny]

The more I think about this, the madder I get. I think there has to be a way to get a class action lawsuit going. I paid this year's fee via credit card. I wonder if I can protest it through them for misrepresentaion or something along those lines?

There was talk on the Paulick Report blog (any of the original content, ID'ed with the PR logo is actually a blog.) of getting a class action suit. In fact some breeders want a refund for 2006-08 because the horses nominated in '06 are the ones missing out this season.

[Laurierace]

Looks like we scared them!

Breeders' Cup Reverses; Will Fund Stakes
Email Print RSS ShareThisDate Posted: December 16, 2008
Last Updated: December 16, 2008



Photo: File Photo

By Lenny Shulman and Ron Mitchell

Five days after it announced it was suspending its North American Stakes program, the Breeders’ Cup has apparently reversed itself and decided to fund the program for 2009, according to two members of its board.

The organization has come under intense criticism from breeders across North America who had already contributed stallion and foal nomination fees to the Breeders’ Cup with the tacit agreement that the Breeders’ Cup would help fund 100-120 stakes races at some 40 tracks across the continent, as the organization has done since its inception 25 years ago.

According to the two members, who spoke on the condition of anonymity, the funding will reportedly come from the approximately $30 million that Breeders’ Cup has in its coffers from nominations collections through the years. Breeders feel this is their money that they have contributed to Breeders’ Cup, although an investment committee of the Breeders’ Cup makes the decisions on where to invest funds, and the 13-member board of directors has say over if and how the funds will be allocated.

Breeders’ Cup senior vice president of operations Pam Blatz-Murff said Dec. 16 said she could not confirm that the decision to not fund the stakes program for 2009 had been reversed. "As you can imagine there has been quite a bit of discussion since the suspension, but as of now it is still suspended," she said.

Members of the Breeders’ Cup’s own board of members and trustees were upset that the decision to do away with the stakes program was made without consultation of the members and trustees.

Prominent breeders had threatened not to nominate their foals to the Breeders’ Cup program unless the decision to suspend funding of the stakes program was reversed. In addition, at least one member of the board of members had threatened to resign if the original decision to halt funding stood.

In a Dec. 11 memo, Blatz-Murff said that the organization was projecting a reduction in overall Breeders’ Cup revenues of more than $10 million next year due to the global economic downturn and a likely shortfall in nominations revenue. It goes on to state that in order to maintain the Breeders’ Cup Championship purses at their current level of $25.5 million, television and marketing spending will be slashed by more than $5 million. In the last two years, the Championships have expanded from one day to two, and from eight races to 14.

Previously, according to the memo, the Breeders’ Cup had committed to allocating funds for 2009 races, but now those allocations are suspended.

The 2008 Breeders' Cup stakes program featured 100 races and allocated $5 million in Breeders' Cup Funds to existing stakes races across the United States and Canada. For the past 13 years, Breeders' Cup and 40 racetracks and racing associations have participated jointly in this program that provides additional purse money to Breeders' Cup nominated horses. Total purses for the 2008 program exceeded $25 million.The Breeders’ Cup board last week unanimously decided to leave purses for the two-day Championship event at their 2008 level of $25.5 million. Some critics suggested that the funding for the wider stakes program should come out of Championships purse cuts


Copyright © 2008 The Blood-Horse, Inc. All Rights Reserved.

[War Admiral]

Haha, I just got that e-mail from the BH and hopped over to make sure someone had posted this!

[Glimmerglass]

My guess is that the 2-day format and that some of the newly added races - such as the Marathon (ungraded) will be dropped. If they can "flip flop" on the whole issue of what will be dropped and other unchanged, then I'd say all bets are off with this earlier claim:

Purses for the World Championships are scheduled to be unchanged at $25.5-million for 14 races.

[LaurieB]

According to the press release issued by Chairman of the BC Board, William S. Farish Jr., they are only committing to reinistating the stakes program for one year, 2009.

[lindasp62]

Now they've reversed their decison.....
http://news.bloodhorse.com/article/48462.htm

[Glimmerglass]

Not cited but I'm sure folks have seen the recent news as to the BC's financial woes:

DRF July 7, 2009 "Breeders' Cup faces 'substantial deficit'" (http://drf.com/news/article/105266.html)

excerpt

The Breeders' Cup weathered a near revolt among its nominators late last year when it attempted to suspend a $6 million supplemental purse program, but the sustained recession leaves purse cuts as one of the few options to control expenses without further dipping into its depressed reserves, board members said. The Breeders' Cup expects to distribute $30.5 million in purses this year. In 2005, purse distribution was $21.8 million.

"There's no way we can continue operating our company with the deficits we've had," said Terry Finley, the owner of West Point Thoroughbreds and a director of the company. "There's obviously going to be some changes to the business and tweaks to the model. We're all of the same opinion that everything is on the table. We wouldn't be doing our jobs if that wasn't the case."

According to the organization's financial statements for 2008, the Breeders' Cup had negative cash flow last year of $7.5 million, reducing its cash balance to $1.2 million by year end. In large part, that reduction was caused by a fall-off in the value of its investments, a change that reduced net assets to $28.2 million, down from $40.9 million at the end of 2007. In response, the Breeders' Cup tapped a $10 million line of credit for $5.9 million to operate this year.

"The logical place to start is the purses," Sanan said. "You don't have to have a $5 or $6 million Classic; horses will still come if it's worth $3 million or $4 million. But that is only short-term."

The nominators provided $21.5 million in fees in 2008 compared with $29.5 million in purse expenses and awards. Fees are expected to be only approximately $16 million in 2009 compared with the $30.5 million purse distribution.

"You can't ask the nominators to put up more money," Taylor said. "They've already primed the pump. And they are going through tough times."