The North American registered foal crop has declined in the 21st century from 37,755 foals in 2000 to an estimated 22,500 foals in 2016.  The actual number of Thoroughbreds born is somewhat larger because owners do not register every eligible foal.

The number of races contested in North America for registered Thoroughbreds also declined—from 62,877 in 2000 to 43,949 in 2015.  The correlation between the number of foals registered and the number of races run over this period of time is .95, indicating that there is a close correspondence between the size of the registered foal crop and the number of races run.

Correlation does not confirm causality.  However, in this case it is reasonable to assume that a major reason the number of races run has decreased is because there are not enough entries to fill the races.  To check this assumption, I correlated the foal crop in each year since 2000 with the number of races run two years later.  With this time lag, the registered foals in a given year would have been 2-year-olds and the effects of declining foal crops would have been felt by racetracks looking to fill races.  Allowing for the lag effect, the correlation between the registered foal crop and the number of races run rose to .99.

The size of registered foal crops hinges on very recent economic conditions in the Thoroughbred industry, such as purses offered by racetracks , auction prices for bloodstock, and training costs to horse owners.

The number one economic risk or threat for the industry is the decoupling of slots revenues from horse racing purses, which is a trend as financially-strapped state governments seek any money they can find.  Exacerbating the situation is the fact that  pari-mutuel wagering is stagnant and therefore is unable to augment purses.

Racetracks and advance deposit wagering companies can continue to provide their customers with a smorgasbord of races from North America, Europe, South Africa, and Australia, even with a continuing decline in the number of races offered.  The racing-industry participants most in jeopardy are the horse breeders and the businesses that serve them–the auction companies, veterinarians and common carriers.

The downsizing scenario for horse breeders and supplier firms in the industry can be mitigated only through a revitalization of pari-mutuel wagering, which, to date, has been elusive.


More on this next week.

Copyright © 2016 Horse Racing Business


The USA Today headline on October 8th read “Sagging NFL TV ratings leave owners scrambling for answers.”  When the television ratings for America’s most popular sport drop that is a cause for concern for all sports.

Explanations for the ratings decline have been numerous, ranging from American’s focus on the presidential election to a glut of sports offerings.  But hard data indicate that viewers have increasingly been cutting back on watching sports on television and therefore the causality is not a temporary event like the election.  Indeed, ebbing viewership is a trend rather than an aberration.

For example, in 2010, ESPN had approximately 100 million subscribers.  By 2015, the cable network had 92 million subscribers for a decrease of 8%.  The downturn has picked up steam in 2016:  October was the worst month in ESPN’s history, when it lost 621,000 subscribers and had a 24% decline in ratings for its crown jewel–Monday Night Football.

What has happened at ESPN is plaguing most television programming, whatever the genre.  While several contributing factors are at work, the most prominent causality is that people are being inundated with information and their attention spans are shortening.  Why watch an entire NBA or MLB game when one can catch the highlights on a smartphone and also forgo the expense of paying for a sports channel on cable?

Horse racing is fortunate to have a format that fits well with the new reality.  Its showcase events–the Triple Crown races–each last in the vicinity of two minutes.  Tune in, say, at roughly 6:00 PM eastern time on the first Saturday in May and be done watching the Kentucky Derby shortly thereafter.  Similarly, a viewer can avoid the clutter of the marathon two-day telecasts of the Breeders’ Cup by accessing the telecast precisely at the post times for the races he or she wants to see.

A personal example:  On Saturday afternoon of Breeders’ Cup day, I looked up the post times for the races I most wanted to watch and did errands in between.  It takes the most patient and avid fan to sit in front of a television for hours on end watching any sporting event, much less one in which there are 30 or 40 minutes between races, as in the Breeders’ Cup.

Bettors with accounts on wagering platforms have a daily potpourri of races to wager on from racetracks around the world.  Someone in the eastern U. S. time zone can bet on and watch a race from Europe before breakfast and then head off to work, or take in a race or two from Australia before turning in for the night.

Events like the Super Bowl, the World Series, the World Cup, and the Kentucky Derby will attract a large television audience.  However, an NFL game on Thursday night, an NBA contest in February, or a third-tier college football bowl game are all swimming against the cultural tide in a society of fragmented audience interests and truncated attention spans.

Horse racing, as a sport and betting option, has structural and cultural weaknesses but its inherent characteristic of extreme brevity (in presenting races available at all times of the day and night) is its only inherent advantage in today’s milieu…but a valuable one.

Copyright © 2016 Horse Racing Business


Horse of the Year for 2016 comes down to a choice between the 3-year-old Arrogate and the 5-year-old California Chrome.  The parallel between 2016 and 2010 is striking, when the voters selected between Zenyatta and Blame.

In 2010, Zenyatta had a record of five Grade I wins and a second-place finish to Blame in the Grade I Breeders’ Cup Classic.  Blame, by contrast, in 2010 had three Grade I wins, one Grade III win, and a second in a Grade I race.

Horse of the Year voters cast 128 first-place votes for Zenyatta, 102 for Blame, and five for Goldikova.  Therefore, Zenyatta received 54.5% of the first-place votes to 43.4% for Blame.  Had Zenyatta not lost to Blame in the Breeders’ Cup Classic, she no doubt would have received almost all of the first-place votes.

In 2016, California Chrome was the winner of five of six races and finished second by a neck to Arrogate in the Breeders’ Cup Classic.  California Chrome won three Grade I races:  the Awesome Again, the Dubai World Cup, and the Pacific Classic.  He also won two Grade II races and a handicap in Dubai in preparation for the Dubai World Cup.  In comparison, Arrogate ran second in a maiden special weight in his first career start and then won a maiden special weight.  Thereafter, he won two optional claiming allowance races, the Grade I Travers, and the Breeders’ Cup Classic.

Based strictly on past performances, California Chrome has the better portfolio for 2016, just as Zenyatta did in 2010 when voters designated her Horse of the Year.  A more nuanced look, however, provides an important distinction between 2010 and 2016.  When Zenyatta lost the Breeders’ Cup Classic for her only career defeat, she was closing on Blame in the final strides and came up just short by a nose.  California Chrome, on the other hand, had the lead in the Breeders’ Cup Classic in deep stretch when Arrogate caught him and prevailed by about a neck.

Whereas a strong case can be made that Zenyatta was the better horse in the Breeders’ Cup Classic, the same case cannot be made for California Chrome.  If the 2010 Classic had been slightly longer, Zenyatta would surely have won, but in 2016 Arrogate looked as though he would have extended his lead had the race been another furlong or another mile.

Such subjectivity and nuance aside, the title “Horse of the Year” denotes a record of superior achievement over a 12-month period of time.

Comparative past performances for these two exceptional racehorses in 2016 demonstrate that California Chrome was, based on the facts, Horse of the Year for the full scope of the 2016 calendar–competing in stakes races in the United States and Dubai from January 9 through November 5–whereas the late-developing Arrogate was not a factor until late August when he won the Travers Stake.

Copyright © 2016 Horse Racing Business