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Despite rain, record betting
Despite poor weather, a massive construction project, and a field that many saw as inscrutable, business figures for the Kentucky Derby at Churchill Downs were up on nearly all fronts, including television ratings.
All-sources betting on the Derby itself and the 12-race Churchill card were records, while attendance, despite the construction and thunderstorms at the track, was relatively strong. Overnight ratings for the Derby broadcast were up as well, adding to a string of strong numbers for the telecast since NBC took over from ABC in 2001.
It is hard to estimate the impact of advertising worn by jockeys, an issue brought to the forefront Derby Week by a lawsuit that was temporarily resolved in favor of riders. The only sponsor to receive significant airtime on Derby Day was the clothing company Wrangler.
Betting figures were unquestionably strong. Wagering on the Derby established a North American one-race record at $99,348,706, up 13 percent compared to the 2003 record, according to Churchill Downs. An 18-horse field that produced a tepid 4-1 favorite in Smarty Jones, the winner, helped drive handle.
All-sources wagering on the entire Kentucky Derby card from Churchill Downs was $142,775,857, up 2 percent compared to last year's record. Churchill ran 12 races this year on the card, compared to 11 last year. Heavy rains during the day, including a powerful thunderstorm that struck approximately 90 minutes before the Derby was run, dampened handle on some races.
The poor weather also took its toll on attendance figures. Attendance dropped 6 percent compared to last year to 140,054.
Overnight TV ratings strong
The Derby broadcast overnight rating was an 8.3, up 8 percent over last year's broadcast, according to NBC. Each overnight rating point represents approximately 717,000 households. Share for the broadcast was an 18, up over last year's 17 share. Share is the percentage of televisions in use that are tuned to the broadcast.
NBC has now strung together four strong Derby telecasts, reversing a trend that had started in the early 1990's. In 2000, the last year that ABC broadcast the race, the overnight Derby rating was a 6.6, the eventual nadir after a 10-year freefall. The next year, NBC's inaugural Derby broadcast, the rating jumped to an 8.3, up 26 percent.
Smarty Jones's popular win will likely pay dividends down the road for NBC's Preakness and Belmont broadcasts. With his win in the Derby, Smarty Jones because the first undefeated winner of the race since Seattle Slew in 1977.
"We now have a huge story going into the Preakness," said Kevin Sullivan, a spokesperson for NBC Sports.
Little airtime for jockey sponsors
The story leading up to the Derby, from a business standpoint, was jockey advertising.
Five jockeys filed a lawsuit two weeks before the Derby arguing that a Kentucky rule prohibiting advertising violated their free-speech rights. A federal judge issued a temporary restraining order against the Kentucky Horse Racing Authority on Thursday, and shortly thereafter, the authority suspended its own rule so that all jockeys could take advantage of sponsorship deals. As a result, at least nine of the 18 riders in the Derby wore ads during the race.
Most riders on the Derby card also wore a Jockeys' Guild patch on their pants legs. People familiar with racing or the Guild may have been able to recognize the logo, a black and yellow riding boot with the word "Jockeys'" above the boot and "Guild" below it. Those unfamiliar with the logo likely saw what looked like a backward "L" in a square.
Sponsoring companies received little airtime on Derby Day broadcasts, and the ads, which appeared in most cases on the right and left pant legs of riders, were difficult to read, especially through the rain. Wrangler's association with Shane Sellers was the most fruitful because of an interview he conducted with NBC commentator Bob Costas in the jockeys' room wearing a Wrangler cap.
Stewart Elliott, the Philadelphia Park-based rider of Smarty Jones who dominated airtime during the Derby broadcast, did not have an endorsement deal. Kelly Weitsma, the president of Equisponse, which represents jockeys in negotiations with companies, said companies have begun to express an interest in sponsoring Elliott for the second leg of the Triple Crown, the Preakness Stakes, in two weeks.
Cella reduces his liability
Smarty Jones's win in the Derby also meant a $5 million bonus from Oaklawn Park, which offered the incentive - to honor its 100-year anniversary - to any horse that could win Oaklawn's Rebel Stakes and Arkansas Derby and then win the Kentucky Derby. That made Smarty Jones's Derby victory the single greatest payday in racing history.
Initially, the bonus was structured so that an insurance company would cover $2.5 million, with Oaklawn Park owner Charles Cella - who is known as a high-stakes gambler - covering the other half. But after Smarty Jones won the Arkansas Derby, Cella went back to the insurance company to negotiate a new policy.
"When I watched Smarty win the Arkansas Derby with a last eighth in 12 and change over a wet track, I said, 'My god, this horse is going to win the [Kentucky] Derby,' " Cella said Monday. "So I went back to the underwriter, and last Thursday we signed a deal."
Cella would not disclose the cost of either policy. "I don't think that's fair to the underwriter, and really, right now they're furious with me," Cella said.
Cella also said that if he was unsuccessful in getting a new policy, he likely would have made a hedge bet on Smarty Jones in the Kentucky Derby to cover his exposure. Cella could have wagered $500,000 on Derby day to recover most of the $2.5 million (not taking into account the effect of the wager on the odds).
And will the bonus be in place next year? "I think we're going to wait until our next centennial," Cella said. "But seriously, I could not be happier. These are great people, this is a great horse, and this story could be a movie. By the time this is over, this story is going to pale 'Seabiscuit.' "