No need to pony up some dough for a program
Fort Erie is considering racing without spectators once province begins easing COVID-19 restrictions
The first light at the end of the tunnel for live sports in Niagara — once COVID-19 restrictions are gradually lifted — could be a glint in the eyes of an oncoming thoroughbred.
Michael Naraine, an assistant professor of sport management at Brock University, suggests, of all the professional sports in North America, horse racing is in the best position to sustain itself should spectators be banned until an effective vaccine is developed.
Unlike hockey, lacrosse and soccer, which are gatedriven and greatly dependent on ancillary revenue from concessions and souvenirs, much of the revenue in thoroughbred racing is generated by gambling.
And most of that money comes from off-track wagering.
“If there was going to be a sport in our area that got off the ground first, I can foresee it being horse racing, albeit without any spectators,” Naraine said in an interview.
“You don’t necessarily need to be at the event to gamble, but you certainly need to go to the speedway to watch cars go around.”
Indeed, some tracks in the United States are already up and running past empty grandstands and before a tightly controlled number of people.
Fort Erie and Woodbine in Toronto may soon join them in filling a void in live sports of any kind.
Tom Valiquette, chief operating and financial officer for the Fort Erie Live Racing Consortium, confirmed running full race cards before empty stands is among the contingencies under consideration by tracks in Ontario.
“That’s in all likelihood the way it’s going to be. I personally think you’re not going to see too many sporting events that have multiple people in the stands for quite some time,” he said. “Whether it’s us or whether it’s any other sporting event. How long that takes I don’t know.”
Running a race card with a “core group” of about 50 people, while not ideal, may have to happen over the short term to keep the industry afloat.
“To be honest, we’re in survival mode right now more than anything else,” Valiquette said.
“Yes, we want to do well for our business, but right now we’re just trying to make sure the business and the horse people can continue to survive through this process,” he said.
With anywhere from 60 to 80 per cent of revenue coming from wagering, horse racing doesn’t need to count on fans to survive.
“Racing is fortunate in that regard. Most of our revenues come from people who are not at the track in the first place,” he said.
“If you look at our live racing dates, if we did a million dollars in wagering there might be $50,000 wagered on track and $950,000 wagered off track,” he added.
“And, on non-race days, the majority of the bet that takes place on wagering activities is done through HPI,” a popular betting app.
While tracks such as Fort Erie and Woodbine can “operate fairly effectively without fans,” Valiquette conceded the solution is less than ideal.
“It’s tough to grow your business. It’s tough for the owners not to be able to come and watch their horses, but certainly on a short-term basis we can do it.”
Job losses would be substantial at Fort Erie, which typically employs about 180 people throughout the season. More than two-thirds, who are mostly part-time and seasonal, would not be needed should the track run without spectators.
“What you’re losing is all your mutuel tellers, you’re losing all your food and beverage operations, you’re losing some security, you’re losing all the work to basically maintain the grandstand,” Valiquette said. “You’re going with your core operation. Unfortunately, it does hurt but at least there will be something to come back to.”
Naraine said where sports ends up once society begins opening up is going to be a “lot different in the next little bit.”
“And by the ‘next little bit,’ I mean the next six to 12 months. There’s a good chance that sport will return in the fall,” he said. “Until a point at which we do have a vaccine, there’s a really good chance that sport will be a skeleton version of itself to what fans are accustomed to.
“I can guarantee you with a 99.9 per cent certainty, even if fall sports were to get up or local sports in our region would get off the ground, there would be no spectators.”
While not having fans in the stands is a “big deal” for the Toronto Raptors, “it’s not the worst thing in the world because the National Basketball Association gets a lot of its revenues from television.
“The NFL’s the same,” Naraine said. “Is it a big deal that 55,000 fans can’t go the Buffalo Bills game? Yes, but it’s not truly the be-all, end-all because the television contracts and the sponsorship rights fees are so high.” The National Hockey League, in comparison, has a “decent television contract by NHL standards,” but it is not more than the money teams take in from fans at the game once they’re in the stands
“If you think about a team like the Florida Panthers, they need people to come into those games, to buy those $7 American beers. They need people to come into those games to buy the $5 popcorn, the $20 hats, whatever the case may be,” Naraine said. “That’s where that team derives its revenue from. It’s not from charging people to come to the game, but they need people in the seats to then buy other things.”
“If you look at our live racing dates, if we did a million dollars in wagering, there might be $50,000 wagered on track and $950,000 wagered off track.” TOM VALIQUETTE FORT ERIE LIVE CONSORTIUM CHIEF OPERATING AND FINANCIAL OFFICER