The Jockey Club's annual report on the number of Thoroughbred mares bred released last week presented a vivid picture of a contracting industry. The report predicted that, come next spring, the United States will see the smallest foal crop in 40 years.
As the Keeneland September auction showed, that may not be a completely bad thing. Prices rose from last year and fewer of the yearlings brought to the auction went home unsold.
Another Jockey Club report from last summer had a similar combination of sobering and hopeful news. The Jockey Club, concerned about the future of racing, hired the consulting firm McKinsey & Company to take a hard look at the industry.
It wasn't all bad. Great racing still attracts fans and viewers. Attendance at the Kentucky Derby is up and television ratings for the Breeders Cup have risen 6 percent since 2006.
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Some of the findings, however, will neither surprise nor encourage people familiar with racing's struggles in recent decades:
Betting on races is down 37 percent in the last decade, attendance has shrunk 30 percent and both starts per horse and race days are down 14 percent.
Most troubling, the fan base is shrinking 4 percent a year. Some of the fan issues McKinsey found won't be surprising to those who have visited many tracks (with Keeneland as an exception): dirty restrooms, bad food, run-down facilities.
The research, though, left reason for hope.
There are things wrong with racing that can be fixed if this highly fragmented and contentious industry could practice a bit of cooperation and coordination.
For example, quality racing draws the most betting, but there's little to no coordination to give bettors time to actually bet on the races. The McKinsey researchers found that last year more than 77 percent of races at top tracks went off within five minutes of a race at another top track.
Their analysis showed that if the races were spread out to as much as 15 minutes apart, wagering would have jumped by 6 percent.
Another intriguing finding was that 28 percent of all races don't generate enough betting to pay the cost of the purses after accounting for taxes. A full 50 percent don't generate enough to pay the purse, taxes and the expenses of presenting the race.
This is related to the finding that adding an eighth horse in a field increases betting by 11 percent. The conclusion: fewer races and larger fields mean more betting, high profits for tracks and, as a result, higher purses and with them better horses.
In the Thoroughbred world, as the September sale just demonstrated, quality trumps quantity.
The presentation went into discussions of more technical aspects such as wagering pools, advanced deposit wagering, technological innovation (or lack of) and fan rewards programs.
The discussion about racing's economics in the last decade have focused, for better or worse, on slot machines and casinos as a solution. That debate is far from over.
The McKinsey report is refreshing, though, because it presents a thoughtful and thorough analysis with specific proposals for ways that racing can improve its fate with its own product.
To see a transcript of the McKinsey report discussed here go to: www.jockeyclub.com/roundtable_11.asp?section=6