02/12/2010 12:00AM

Dream matchup a pricey promotion


NEW YORK - If the Rachel Alexandra-Zenyatta matchup in a $5 million Apple Blossom Stakes at Oaklawn April 9 really happens, it will be an epic showdown and a great day for the sport and its fans. What it won't be is a profitable afternoon for Oaklawn or any kind of a sound economic model for promoting the sport.

The extra $4.5 million that Charles Cella, Oaklawn's owner, is adding to the Apple Blossom purse if both of them start cannot possibly be recouped through betting on the race. With 90 percent of the handle coming through simulcasting, on which host tracks usually receive only 3 or 4 percent, betting on the Apple Blossom would have to be in the neighborhood of $100 million, and it won't be close. Betting on the Breeders' Cup Classic, including multirace bets, was under $25 million. A likely six-horse Apple Blossom field with two short-priced horses is not going to meet, much less quadruple, that total.

Nor are there any lucrative television rights or sponsorships to be sold for a horse race in Arkansas on a Friday afternoon. Just getting the race on a major network without paying for the privilege will be a serious accomplishment.

Jess Jackson, Rachel Alexandra's owner, agreed on Thursday to run in the Apple Blossom less than 24 hours after issuing a peculiar press release saying that he was exploring a new series of three races against Zenyatta, each worth $3 million to $5 million, with the National Thoroughbred Racing Association. This sounded more like an April Fool's joke than a serious announcement. The NTRA does plenty of good things, but has neither the money nor the authority to present either $1 million or $10 million worth of new races.

What tracks could stage such financial fiascos? Not New York, where such purses would exceed the tracks' currently available cash flow. Not California, with Santa Anita in bankruptcy and Hollywood playing out a string until its likely closure. Not any of the tracks around the country held by public companies that could not possibly justify such extravagance to stockholders.

That doesn't leave much except Oaklawn, where a fortuitous mix of non-economic factors makes it possible. The site and surface are acceptable to both camps, and the rescheduled Apple Blossom date gives them both time for a prep race. More important, Cella's life has been devoted to Oaklawn and the Hot Springs community, and he really doesn't care about taking a loss for the afternoon if he can make some true racing history at Oaklawn.

While the Apple Blossom may have been a unique, one-time mechanism to get Rachel and Zenyatta into the same starting gate before November, it is actually a fairly common case of something good that happens in racing for non-economic reasons. For all the talk about how money makes the mare go, and that this is an industry rather than a sport, racing is often a money-losing proposition at every level.

Most owners lose money, spending $2 billion a year on horseflesh in search of $1.2 billion in purses. Customers wager $13 billion annually and get back about $10 billion after takeout. Most of them think they're so much smarter than the competition than they'll be among the few winners at year's end, but most of them are wrong year after year and keep playing.

Last year's Eclipse Award-winning owners, the Maktoums' Godolphin Racing, has spent hundreds of millions of dollars on bloodstock with no hope of recouping it in either the racetrack or the breeding shed. Jackson himself bought Rachel Alexandra for a reported $8 million to $10 million because he wanted the pleasure and notoriety of campaigning her, not because he really expected her to earn back two or three times what any American filly had ever banked in her career.

This is nothing particularly new - even the dynastic stables of the 20th century were only break-even operations, and those that have disappeared did so because later generations of these landed families didn't like the game enough to keep losing money at it. The current stampede to the exits by horse owners is partly a result of their having been misinformed by salesmen in recent years that racing offered significant opportunities for wealth enhancement.

"Can and do some owners of racehorses make money? Of course," wrote Barry Irwin, the president of the Team Valor racing syndicate, in a recent Internet posting on The Paulick Report. "But the percentage is so small that anybody getting into the game must be realistic and understand that these successful owners are the exception, rather than the rule. If the marketers of racehorses promoted the enterprise based on racing's intangibles, rather than the tangibles, it would be better for all concerned."

In other words, if you're playing this game - as a bettor, a horse owner, or as the guy putting up an extra $4.5 million for the Apple Blossom - you better be enjoying yourself, because you're probably going to lose money at it. Fortunately, Charles Cella sounds like a man enjoying himself these days.