Horses

Breeders' Cup Q&A with Greg Avioli

The 25th Breeders' Cup World Championships will be at Santa Anita Park on Oct. 24 and 25. On Oct. 15 Breeders' Cup President Greg Avioli sat down with the Herald-Leader to discuss the impact the Breeders' Cup has had on the sport, the controversial changes it has undergone in recent years and what might lie ahead for Thoroughbred racing's year-end championships.

Question: When John Gaines founded the Breeders' Cup, his whole vision was he wanted to have this World Series type of event. How close has Breeders' Cup come to achieving that goal and what more does it need to do to get to that point?

A: I knew John very well and I had the privilege of having regular lunches with him the last few years before he died. He spent a lot of time talking about what he was trying to accomplish with the Breeders' Cup and you're exactly right, what he wanted to do was create an event that had the size and the scope and the level of excitement that would attract new people to the sport. Both new people in terms of fans but maybe more importantly in terms of prospective new buyers.

Keep in mind this was funded by the breeders, and the breeders are essentially the manufacturers; they're creating the product. So if you break that down, there are two elements that had to happen to accomplish the goal. You had to create a legitimate event that was truly a championship because a year-ending championship really didn't exist in this sport at that time.

So fast forward 24 years and we've done a remarkable job as an organization in creating a legitimate season-ending world championship for the sport. And I don't think anyone would have envisioned how quickly the Breeders' Cup would grow in stature within the horse industry. A lot of that has been helped by the growth of the U.S. breeding industry. If you win a Breeders' Cup race, your breeding value increases significantly. The Breeders' Cup champions are worth substantially more than similarly bred horses who are not Breeders' Cup champions. As a result of that, the Breeders' Cup has been very successful in attracting the best horses in the world. It has become a world championship in my opinion faster than you would otherwise expect.

If you take a look at the other major championships in sports. The Kentucky Derby is 134 years old, all the major golf tournaments go back for decades.

So I'd say on objective No. 1 we get an A-plus. But that was objective one. The second level of bringing new fans to the sport the Breeders' Cup has not achieved that goal at the level I think John would have wished or that I think we're capable of. By that I mean we have yet to break through to the public in the way that the U.S. Open tennis has or in the way the Kentucky Derby has.

When you look at U.S. Open tennis, there are a lot of analogies there, in that tennis is not one of the top five sports in the country. It's ratings are comparable to horse racing and just like in racing where a lot of people love tennis, it has not been a sport itself that has been on the rise in popularity. However, the U.S. Open has grown dramatically and attracts a fan base in New York far beyond tennis fans. So it is an opportunity by creating a major entertainment style event. We aspire in many ways to be to horse racing what the U.S. Open is to tennis.

Q: How do you do that?

A: First thing you do is you make your event bigger. Going from a one-day event to a two-day event and you add significant entertainment-like aspects to your event. This year for example we're going to have at the Breeders' Cup a kickoff party Thursday night at the Palladium, and we're going to have Maroon 5 be the entertainment that kicks that off. We're going to have a dinner for dignitaries on Saturday where the entertainment will be some of the talent from Dancing With the Stars. We're going to have more celebrities at the event particularly focusing on Friday on great female athletes. We have a number of female Olympians coming to the event.

So you want to take a page out of the U.S. Open playbook and create a larger event over a more extended period of time, focus more on the entertainment community and you grow your relationship with the media so that more people can read and understand what your event is.

Q: The two-day format has been the subject of much criticism this year. How do you respond to the criticism of some saying that by expanding to two days, you've diluted the event, and that you've changed the Distaff to the Ladies' Classic and moved it to a Friday audience?

A: I think the time to judge the success of this will be after a few years of seeing how these changes work. My belief is that by showcasing the top filly-and-mare races on Friday provides the best platform our sport's ever given to the best female horses in the world. You can see the level of coverage this week from ESPN and all their affiliates including from general media in the Los Angeles area for a Friday event, you'll see more people pay more attention to the Ladies' Classic than ever before. We're lucky this year in that we have a potential Horse of the Year in Zenyatta running but, going back to the general public which is what we're trying to attract, most of them could not tell you which races were filly-and-mare races, who the top filly is, they just don't understand it. So what we've done by creating an all-female championship day is given it some context. Ultimately we'll see how the wagering is, we'll see the media coverage, we'll see the television ratings and we'll have to assess it.

Q: Is there a concern with it being a Friday during the day, that a lot of people who may want to go to that event will still be at work, and that others won't be home yet to even see it on TV?

A: I can appreciate that as a criticism but I can also tell you all the major golf tournaments in this country run for four days and they seem to have Thursday and Friday work fine. Having been at a couple of Olympics, those run for two consecutive weeks.

People can make exceptions if they really want to attend a certain event, but for the most part, people are going to consume the Breeders' Cup on television or on the internet. This year, the Ladies' Classic is going to go off at 6:15 p.m. eastern time, when the vast majority of people are going to be home from work. All of the races will be available on breederscup.com, so people can watch while they're at the office. So there is no way to try significant new things without changing the status quo.

The one question we've had was, why if you have it two days didn't you go Sunday instead of Friday? And the answer is the 800-pound gorilla in U.S. sports that is the NFL, and it doesn't make sense to go head-to-head with the NFL.

Q: Is there anything Breeders' Cup could do to draw more of the international horses so that it is truly a world championship?

A: I can tell you we will have the largest contingent of international horses that we've ever had for this year's event. Some of the things we have done have worked for us in that respect. Running on the synthetic surface attracts a significant number more international horses because of the belief by many international trainers that the surface is more closely similar to traditional turf.

Another thing that will be good is our Breeders' Cup Challenge days that we've had in Toronto at Woodbine, and in London, and I expect you will see that expanded to two or three additional international sites for 2009. The carding of some of the new races, the turf sprint race, is probably the most popular international division right now as well as the juvenile turf races. The more turf races we put on our card, the more likely we are to attract international runners.

Q: The races that have been added, are those set in stone or could you see dropping some or adding some? With races like the Marathon, some of the criticism has been, are there enough prep races during the year to justify that division?

A: Again I go back to what I said about the two-day format. We're going to have to assess all of this, nothing is set in stone. If any single race that we've added the last two years turns out to be ineffective, whether it's not interesting to the fans or it doesn't attract top quality horses or whether it ends up cannibalizing other races, then we have left open the option (that) we will discontinue it. We'll be in an assessment mode I'd say for the next year, but I can tell you as a positive, we have shattered the record for pre-entries this year. We'll have to see how the fields turn out when we get to the entries.

Q: What do you think was the moment that gave the Breeders' Cup its credibility? Was there a defining race?

A: I think the best person to answer that would be (former Breeders' Cup presidents) Ted Bassett or D.G Van Clief, someone who was around in the early days of organizing those races. But the inaugural event was considered by most people to be a tremendous success. I think a lot of people were impressed that after two years of planning that this thing could actually work. They had perfect temperatures, they had some tremendous entries in the races so I think it got off to a good start. We've had some rocky Breeders' Cups after that. From my perspective, I think the 2006 Breeders' Cup when we returned to Churchill Downs after six years away and what was not great weather, it was 50 degrees it was gray, we just shattered every record that we had. I think that set the event up to jump forward. We jumped over $140 million in wagering, we had Ouija Board win her second Breeders' Cup and we had tremendous international press.

I think one of the more notable Breeders' Cups that we've had was the 2001 Breeders' Cup at Belmont, which was the first major event in New York since 9/11, and that was moving on so many levels but particularly with the great race call from Tom Durkin with "Tiznow wins one for America". But you could look back through the 24 Breeders' Cup and find many wonderful moments and many tragic moments.

Q: I don't think anyone would question that the Breeders' Cup has changed racing. Has it changed it for the better?

A: Absolutely. I think what racing lacks is major events. Every other sport that has been successful in selling itself has committed events within the sport that truly stand out. You've seen golf grow at a nice level, you've seen the majors grow.

You get beyond the Triple Crown and it's questionable whether we have any other major days beyond the Breeders' Cup. We clearly have some great days of racing. Saratoga is a tremendous meet and the Travers is a fantastic race. The Pacific Classic is a fantastic day of racing with huge crowds, but do those rise to the level of major sporting events for the general public? Probably not. The Breeders' Cup does have the ability to rise up and be the fourth major racing event and we need more of those.

Q: Given the current state of the economy, what are the concerns you have this year in terms of handle in light of the fact that for a lot of people it's not feasible for them to spend that kind of money?

A: We are obviously concerned. There is nothing to indicate our economy is going to get any better in the next few days. For us the big issues are going to be attendance. We have sold approximately 17,000 of the 21,000 seats at Santa Anita, so that is good. And then we would expect, based on previous Breeders' Cups that we've had on Saturday, as many as 30,000 walk-up for general admission, and it's a real possibility that this economy will affect how many people will be able to do that. Not just buy the ticket, but pay for the gas, pay for the babysitter — all the things that have to happen for a family to go to an event anywhere.

Financially what is even a bigger issue for us is the simulcasting. Last year we set a record with $147 million in total wagering and that translates into roughly about $10 million in revenue for the Breeders' Cup. We had earlier in the year — with the additional new races — we were projecting we would have significant growth off of that. Keep in mind last year's numbers included some brutal rain on Friday and Saturday.

But many quality horse racing meets around the country are down 10 to 20 percent. So it would be probably overly optimistic to expend a 10 to 20 percent increase on the Breeders' Cup in that environment. What we do have is . . . full fields. We're going to have a strong international presence and we are a major day. And by that I mean, if you look at the handle around the country this year, the major days have held up better than the entire meets. So while Del Mar was down double digits for the entire meet, Pacific Classic was down just a few points. Take a look at the Triple Crown races and it's the same thing. They're not increasing but they're not down as much as the meets.

Q: Is there a venue that Breeders' Cup hasn't gone to yet that you would like to but logistics, like track size, have prevented it?

A: The two that stand out as possible Breeders' Cup sites would be Keeneland and Del Mar. Keeneland is, in my opinion, the classiest facility in horse racing. The look and feel of not just the racetrack but the entire facility, their level of customer service, the overall ambiance of Keeneland, just sets itself up as something that the Breeders' Cup would like to be associated with. The question with Keeneland has been seating capacity.

Del Mar is visually as pleasing a racetrack as you're going to find. It's also got a tremendous management team and as good experience in putting on a major race day as anyone in the industry with the Pacific Classic. It also has probably the youngest fan base of any market in the United States, and I believe (it) would be a tremendous financial success for the Breeders' Cup as well as visually a great backdrop for the event on television.

Q: Have you looked at taking Breeders' Cup overseas? What would it take to make something like that happen?

A: It would take such a strong commitment from the potential international host track financially that I can't envision that right now. Essentially what you're talking about is not just a traditional contract for a host track, but one way or another we would have to address payment of the purses.

I don't think you can necessarily look to the U.S. horsemen, the breeders, to fund all the purses for a road game, so to speak, because clearly if you go race in another country, the horses in that country and that region are going to have an advantage. You're also going to have probably a significant decline in wagering if you go to another time zone, if you're in the Middle East or Asia or Europe. And you have significant television issues as well. If you go to Europe, you're basically talking instead of Breakfast with Wimbledon, Breakfast at the Breeders' Cup. You can never say never but right now there is so much that would have to happen, I don't anticipate it for the near future.

Q: How high do you think the purses of the Breeders' Cup will go? Dubai has said it wants to make the World Cup up to $10 million by 2010.

A: Three years ago, I think we were at $14 million in purses for the Breeders' Cup, and this year we're going to be at $25.5 million. That's a significant increase, particularly if you look at how the purses of the other major events in the United States such as the Triple Crown race have grown just a small fraction.

I think our purses are very competitive now but I think they will continue to increase. I can't give you a specific number, but I would envision that within a few years we should be over $30 million. One of the statistics that we're proud of is, we take in the aggregate about $20 million in revenue, nomination revenue, from foals and stallions every year. This year, for example, we'll pay out in addition to our championship day and our year-long stakes program a little over $30 million in purses. So I think it's an effective investment for a member of the breeding community that for every dollar you invest in the Breeders' Cup you get a $1.50 back in terms of purses you can run for, and I'd like to see that differential continue to grow.

Q: What was the attraction in giving the Breeders' Cup to Santa Anita for two straight years given all the issues they had with the initial synthetic surface they put down and the uncertainly about whether they were going to get the current surface ready for this year?

A: The decision to go to two years was made prior to any of the revelations that started with the rains. We understood the track had been prepared when we met in February at the board meeting to make this decision, and it wasn't until as late as May that they decided they had to redo the entire track. So we didn't have the benefit of that information, and if we had known, that definitely would have been a factor we would have considered.

The decision that we reached to go to Santa Anita for two years dates back to the need to significantly increase the interest and awareness of Breeders' Cup beyond traditional horse racing fans. Where better to do that than in the No. 2 media market in the United States and the entertainment capital of the world? How better to link with top recording artists and entertainers than to have your event in Los Angeles in a multi-day format where you can almost be guaranteed sunny, good weather.

So most of the decision to go for two years was marketing related. Having said that, it's one of the few facilities that clearly has the ability to host the Breeders' Cup every year in terms of their staff (and) the quality of the facility, and so we think it's a great home for the Breeders' Cup. The two years was really an experiment to see if two years in the same place can build some momentum . . . in some of our marketing efforts.

Q: There has been some discussion about maybe doing a permanent rotation of the Breeders' Cup among certain tracks. Where does that stand?

A: We talk about it a lot and my personal goal is that by this time next year we'll have a set rotation that will extend out at least through 2014. The most certainty we can have in where we're going to bring the event, the easier it is for our fans to follow, the easier it is for us to attract corporate partners.

The location of your event is very important for specific sponsors. Certain markets are more important for them to be in, and I think as an event in its 25th year, you need to reach that level of maturity as an organization where we have some more systematic knowledge of where we will be.

Q: Of the tickets this year, how many of them are bundled where you have to buy both Friday and Saturday?

A: General admission tickets are not bundled, and there may be some exceptions but the policy that we adopted back in January was that essentially all of the reserved seating is bundled.

Q: Any thought given to changing that in light of the economy?

A: The economy makes you rethink a lot of things. I think the VIP, the highest level seats, sold out extremely quickly with the two days coupled. At the lower level, those seats have not moved as fast as we would have anticipated. So I think we will reevaluate both the pricing of the seats and the coupling of those seats for 2009.

Q: What changes would you like to see Breeders' Cup make in the next five years, 10 years? What's the biggest thing you want to see the event accomplish in the foreseeable future?

A: I think that we have made great strides with the Breeders' Cup "Win and You're in" challenge and I'd like to see that strengthened. I'd like to see a little more structure to that and I'd like to expand it internationally. I think it's very important not just for Breeders' Cup but for U.S. racing that we have a substantial increase in international common pooling with wagering.

Essentially right now the only major markets outside of the United States that bet into U.S. pools on Breeders' Cup day are Canada, France, and South Africa and a limited amount from England; but almost all of England is bet through the bookmakers. The two largest betting markets in the world (are) Japan and Hong Kong. Japan does not allow any wagering on races outside the U.S., and Hong Kong allows only wagering on 10 races, one of which is the Breeders' Cup Mile. We have to have those opened up to attract what will be substantial betting pools for our races.

In the case of Casino Drive, a top Japanese-based horse who will probably be one of the top three favorites in the Classic, no one in Japan legally can bet on that horse, even though the average day of handle at a Japan Racing Association racetrack on the weekend is $100 million. So I'd like to see the Breeders' Cup be helpful in the discussions to open up international markets and then to continue to attract international horses and an international following.

There are a lot of elements of the Ryder Cup that can play very well in a Breeders' Cup-type atmosphere where you build up competition between international horses and U.S. horses in the Breeders' Cup. That can be a way to better attract more American fans to the event. If you had polled the average American they would not have been able to give you the names of more than a couple of the European players in the Ryder Cup in Louisville, but it had strong ratings and people were fascinated by the international level of competition. And I think the Breeders' Cup is one of the best international events on U.S. soil every year.

Q: When will you find out if the newer races that have been added will get graded-stakes status?

A: The policy for the graded stakes committee is, the race has to be run for two years. So the races we added last year will be graded sometime either in December or the first quarter of next year. And then the three we added this year won't be until the following 2009 event.

Q: Will they get Grade I status?

A: We believe they're all Grade I quality races, and if they're not it's probably primarily due to the way the system grades races, which ties in many ways to an issue you raised earlier about the level of prep races in a particular division leading up to that. There is also the quality of horses: Are there Grade I level horses running in these events? Are the purse levels consistent with other Grade I events?

If for some reason a race cannot get a Grade I on first rating, I'm confident that it will shortly thereafter. Sometimes the way the system works you just have to be in the system a while to get the appropriate grading.

Q: When you decided to go to the two-day format, was it more marketing-based decision or more racing-based?

A: It's a combination. On the marketing side, as I mentioned early on, we believed the event needed a greater scale in order to break through to the public. So two days is better than one day, and when people are traveling — particularly internationally — to an event, they're more used to having multiple days of activities as opposed to just one day. It also gets us a stronger television coverage package.

So there are a lot of marketing aspects, but there was definitely a racing aspect of it. Particularly looking back at January 2007, when we made the decision to go to two days, it was mentioned by members of the board that there are a number of divisions where there are excellent-bred horses around the world that didn't have the perfect spot to run on Breeders' Cup day.

The best example would probably be the Dirt Mile, (a race that is suited for) a horse that could extend beyond the distance of the sprint but could not get the full distance of the Classic. An example this year is the Turf Sprint. That's a division where there are competitive horses around the world, but we just didn't have a race to suit them. So our goal is a balancing act between finding what are all the needs that really exist and adding quality races to run without diluting the product.

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