10/29/2014 12:04PM

Effort to market Breeders' Cup overseas proving worthwhile, expensive


This year, the Breeders’ Cup designated 45 races in the United States and Canada as Win and You’re In races, awarding the winner an automatic starting berth in a designated Breeders’ Cup race while waiving the race’s entry fees. Another 26 races in overseas locations drew the same designation.

Of the winners of the 45 Breeders’ Cup Challenge races in the U.S. and Canada, 35 were entered in Breeders’ Cup races. Of the 26 overseas races, only three winners were pre-entered, and two of the three were from South America.

“It works very well domestically,” said Josh Christian, the Breeders’ Cup’s director of racing. “It doesn’t work as well in Europe.”

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At this point, the paucity of shippers from Europe and elsewhere out of the Challenge program isn’t a big concern for the Breeders’ Cup, Christian said. The Breeders’ Cup Challenge program, expanded continually since it was launched in 2007 – especially in overseas locations – is working as a good way to hammer home the Breeders’ Cup brand in overseas countries, Christian said, even if horses are not coming directly from Challenge races into the two-day event, scheduled for Friday and Saturday at Santa Anita.

“It’s a huge marketing tool, and that’s what makes it important,” Christian said.

While only three overseas runners in the Breeders’ Cup won Challenge races, 38 horses from overseas locations were pre-entered in the 13 races this year, out of a record 201 pre-entered horses.

More important to overseas runners, Christian said, is the 2-year-old Breeders’ Cup program that provides $40,000 to any runner based outside of the U.S. and Canada as a travel allowance. The program also awards $10,000 in shipping fees to any domestic runners based outside of California.

While Breeders’ Cup officials credit the travel allowances for providing heady incentives for overseas runners, they’re also expensive. This year, Christian said, the Breeders’ Cup will pay $2.3 million in travel allowances for a slate of races that awards $26 million in prizes. Last year, the company spent $1.6 million in travel allowances.

In fact, the money to pay the travel allowances is being drawn from the event’s purses, to the tune of $2.1 million each year. With the expansion of the program two years ago, Breeders’ Cup began deducting 8 percent from each Breeders’ Cup purse to cover the travel allowances. As a result, the actual value of the “$5 million” Breeders’ Cup Classic is $4.6 million, when counting the amount of money distributed to the first five finishers. The Breeders’ Cup races with $1 million purses are actually worth $920,000.

The Breeders’ Cup has yet to receive a complaint that the money available to the top five finishers has been reduced, Christian said.

“They’re still racing for a huge amount of money,” Christian said.

The cost of the Breeders’ Cup incentive program also has to be measured by the amount of revenue given up through waived entry and starter fees. To start in a Breeders’ Cup race, owners have to pay an entry fee of 1 percent of the purse; the starter’s fee is another 1 percent. Any winner of a Challenge race gets those fees waived. In the Classic alone, the Breeders’ Cup will waive $500,000 in fees if the five Challenge winners entered in the race start.

The Breeders’ Cup has consistently tweaked its incentive programs each year. Christian, who said he spends half of the year in Europe drumming up support for the event, said that’s likely for next year as well.

“Sometimes a program takes a little while to evolve,” Christian said. “Once we get through this week, we’ll sit down and talk about it. You can always get better.”