Item 1. Strong response by sports fans to the recently completed NCAA men’s basketball tournament and the Masters Golf Tournament bode well for interest in the 2013 Kentucky Derby and the Triple Crown.

The NCAA men’s basketball tournament had the highest television ratings since 1994. Ratings for the Saturday semi-final game between Michigan and Syracuse were up 6% over last year’s matchup between Kansas and Ohio State. Ratings for the Louisville and Wichita State semi-final game increased 4% over the 2012 game between Kentucky and Louisville. The audience for the Monday night championship game with Louisville and Michigan averaged 23.4 million viewers (compared to 20.9 million in 2012), with the audience peaking at 27.1 million viewers from 11:00-11:30 PM. The average rating was 7.5.

Scalped tickets for the Masters Golf Tournament were selling for $2,000 per day and $10,000 for all four days. On the final day, Sunday, overnight television ratings for the event in 56 urban areas averaged 10.2; in the 7:00-7:30 PM time slot, the Masters garnered a huge 13.4 rating. Television ratings were up by 26% from the previous year, no doubt somewhat propelled by the Saturday controversy arising when Tiger Woods was penalized rather than disqualified for taking an illegal ball drop and the Sunday playoff between Adam Scott and Angel Cabrera. However, ESPN set a record high for ratings on its Friday telecast of the Masters before the Woods incident took place.

By comparison, in 2012, the Kentucky Derby averaged a 7.2 rating for its two-hour telecast. The actual race portion of the telecast scored a rating of 9 with 14.8 million viewers. Thus the Kentucky Derby telecast fares relatively well, especially considering that the actual “run for the roses” lasts about 2 minutes.

Item 2. In the wake of Animal Kingdom’s win in the Dubai World Cup, Team Valor president Barry Irwin revealed that Graham Motion would no longer be training Team Valor horses, except for Animal Kingdom. Mr. Irwin is certainly an astute judge of horse talent and a highly successful managing partner, who evidently wants a private trainer for his stable. However, the timing of this move is like hearing that the University of Louisville let Rick Pitino go as its men’s basketball coach.

Item 3. According to the California Horse Racing Board, the number of non-musculoskeletal sudden deaths of horses in racing and training at California racetracks was 19 during the 2011-12 fiscal year (July 1, 2011-June 30, 2012) and 17 so far in 2012-13. Seven of these deaths occurred in the barn of Hall of Fame trainer Bob Baffert. The odds that seven of the 36 deaths could originate in the same barn by random chance are so astronomical that it is virtually impossible. Obviously, there is something in the Baffert operation causing the deaths and here’s hoping that the reason can be determined with alacrity.

Item 4. John Sikura of Hill ‘N’ Dale Farm recently complained in a lengthy letter to the editor of the Blood-Horse about an innovation in standing stallions in which the mare owner pays no stud fee unless the offspring brings a pre-specified minimum price at a public sale. (This practice is being pioneered by B. Wayne Hughes’ Spendthrift Farm. Mr. Hughes has a track record in innovation; he became a billionaire by founding Public Storage and creating the self-storage industry.)

Horse Racing Business strongly disagrees with Mr. Sikura. Industry after industry has been disrupted to the benefit of consumers, and the pace is picking up. (Forbes magazine just published “The 12 Most Disruptive Names in Business 2013,” ranging from education to social media to retailing.) Disruption of the status quo is how progress comes about. The market always sorts out which disruptions are useful and which are not, so Spendthrift’s innovation will be put to this acid test over the next several years.

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