The BC Reality

In catching up with the past week off for the holidays, I came across an interview ran by the Bloodhorse.com where Greg Avioli discusses the Breeder's Cup and the future of its Stakes program for 2009. The heart of the interview is how the added purse program may very likely not continue in 2010 with the current state of the economy. Supposedly the Breeder's Cup is struggling. Is it really?

Mr. Avioli discusses some financials. Approximately $31.5 million was paid out by the Breeder's Cup this year. $25.5 million was on the two day championships and another $6 million in its added stakes program. It brought in about $20 million from stallion fees and foal nomination fees. So your first thought is, whoa, the Breeder's Cup is losing $11.5 million a year. Not quite. Consider how much tickets were priced at this year. For those who wanted premium seating they had to come up with $1,000 a piece. Figuring that 10% of the tickets sold were premium, approximately $5 million was generated from Saturday’s 51,331 on track attendance. Also we need to figure in that the other seats ranged from $600 to $200 in the grand stand and then $125 to $50 tickets for the infield. I'd guess at least another $4.5 million was generated if we made the average ticket at $100 a seat. So in all about $9.5 million was raised in attendance revenues.

So subtracting attendance now the Breeder's Cup is out only $2 million. Don’t forget there are the nomination fees for the race which run at a combined 3% of the total purse for the cost of pre-entry and to start. Considering that most races had 10 entries and up, around 30 percent or $7.5 million was recovered by the Breeder’s Cup. So now the Breeder's Cup is $5.5 million in the green. Also, from what Churchill has said in the past, the Breeder's Cup assumes most of the handle income. The total handle for the two day event was just over $155 million. California holds approximately 5 cents for the track and 5 cents for purses in straight WPS wagers. In the case of exotics these fees go up but for simplicity let’s just assume all handle were straight wagers. If the Breeder's Cup took just the 5% purse handle holdings they'd come up with another $7.75 million. Likely the other $7.75 million held for “the track” probably went to running the day’s events (made less expensive by a horde of over 300 volunteers). Concessions and parking are also unknowns.

So by my very rough (and likely lowball) estimates the Breeder's Cup took in a $13.25 million excess this year before expenses of marketing, salaries, security, etc. Seriously, before we start talking about cutting $6 million in purses let's actually present the entire financial picture to the public. The BC reality is the program is doing very well. If not, someone please correct me.

Perseverance!