09/01/2011 2:37PM

Q&A: James Gagliano

Skip Dickstein

James Gagliano has been around racetracks most of his life, and since the start of 2010, he has been the president and chief operating officer of the Jockey Club. Before being hired by the Jockey Club in 2005, Gagliano had worked in front-side roles at tracks in Pennsylvania, Maryland, and New Jersey, including Monmouth Park. Most recently, Gagliano has taken a leading role in a marketing effort announced by the Jockey Club in mid-August at the organization’s Round Table conference. As part of the effort, the Jockey Club will spend $10 million over the next five years to underwrite national television broadcasts and the launch of a free-to-play website and social-networking game. This interview took place Aug. 26.

Age: 46

Family: wife, Rozie; three children: James, 14; William, 12; Rozie, 9

Do you take your children to the racetrack? Oh yeah. I met my wife Rozie at the racetrack. Her father was a long-time horse owner, and her brother Billy is a vet at Monmouth and Belmont. So going to the racetrack is a family event.

You’ve got a degree in history from Rhode Island’s Providence College. What led you to the racing industry?  I like to say I got into racing because my brother wasn’t a very good caddie. He’s two years older than me, and after not getting into caddying, after about a month, he went to my dad and said the caddying thing wasn’t working out for him because he needed to make money. So my dad, through a friendship with the people who owned Monmouth Park, got him a job in the mail room. After two years, he decided to go intern on Wall Street, and I happily took his job in the mail room.

The mail room? Those exist? I thought that was just a cliché they used to make movies about upstarts. It’s a vital part of any racetrack’s operations, I assure you.

You spent a lot of time working at tracks before landing at the Jockey Club in 2005. What do you miss about being at the racetrack every day? Certainly the people, the diversity of people you meet at the racetrack. It’s unique and can be very compelling. But I also miss the buzz of a big day, a big crowd, a big moment. That’s something that can’t be replicated, except in live sports. The first big event I was ever around was the 1985 Haskell. It was Spend a Buck and Skip Trial and a few others. Skip Trial won the race. That really got me hooked.

Do you ever get to go to the races without the coat and tie? Yeah, we were there a couple of weeks ago, at Monmouth. It was great to be there. And I enjoy going to Saratoga as well. Rozie and I took the kids a day after the (Aug. 14) Round Table, and you’re always reminded what a great, fun day the races can be.

Speaking of the Round Table, let’s talk about the McKinsey report. What finding in the report surprised you the most? The one that I pulled out early on, and I think you even picked up on this one, is that only 46 percent of core fans would recommend racing to others. I found that very discouraging. It’s so low. These are the people who are confirmed fans, and it’s just so low. It speaks very loudly about the sport’s present course, and the future of the business.

What finding surprised you the least? There were a series of recommendations that were made, and some of them weren’t necessarily new. But now they are supported by facts and a plan. I thought going into the study that we needed desperately to increase our national broadcast television presence to become commensurate with other sports and entertainment. So that’s certainly one there that wasn’t surprising.

What’s been interesting to me is that since the Round Table, we’ve heard from no less than 20 producers and directors who have ideas on ways to tell the stories about our sport. Some of them, many of them, are reality-based programs. Our first goal is [the broadcast of live racing], but we think that there are other programming aspects, including, perhaps, things like reality shows and the jockey shows that have been successful as well as weekly digest shows about the sport and recaps. All of those can be companions to each other. They don’t have to be mutually exclusive. But again, our first priority is to get our best races on TV more often.

So could the television strategy be multi-pronged, or is it only going to be one show? Absolutely multi-pronged. McKinsey’s helping us sort through those, and clearly, the largest investment is going to be on America’s best racing, the stakes races, but there are a number of other projects that look attractive, and we may help produce those as well. It’s encouraging that there are so many ideas out there from people who want to tell the stories about racing. It’s all about the stories. That’s what television is.

Your organization is going to spend $10 million over the next five years on several of the McKinsey report recommendations. But if the Jockey Club had $100 million to spend anywhere in the racing industry, right now, what would you spend that money on? We think we have a plan and the right amount of money to execute it. Clearly, television is very expensive, so that’s where we’re putting the bulk of the money. And that’s where the bulk of the money should go.

A lot of outside consultants say the game is too complex. The McKinsey report was no different. What’s so complex about it, compared to, say, football or baseball, two sports that have their own sets of very arcane rules? The economic driver of our game is bettors, not just observers. Those other sports, you can participate in them just by watching. We are truly a participatory sport, and until the observers are turned into bettors, the economic drivers don’t start. That’s why we’re different. We need to turn observers into bettors.

Let’s say a total stranger walks up to you on the street and says, “I’d like to know more about racing.” What would you recommend they do? Usually, the answer would be, “Here’s a video, here’s a book.” But I would say, “Why don’t you come to the races with me, why don’t you watch a race with me?” We’ve seen, from our own independent studies, that most people are introduced to the sport by being there with a colleague, a family member. So that mentoring aspect is highly successful in bringing in new fans.

And yet you have 46 percent of those fans who say they won’t take people to the racetrack, according to the consumer research. How do you improve the core fans’ feeling about the game? It needs to have a more top-of-mind presence with consumers to begin with. If they don’t see much of it, if they don’t notice it, they won’t be attracted to it. So that’s where it starts. So that’s the television aspect of it, the social-media aspect of it, the digital platforms we’ve talked about, and the free-to-play site. They are all aimed at attracting that kind of behavior. 

From all accounts, the upcoming HBO series “Luck” is going to tell a lot of stories about the shenanigans that go on around the racetrack. Will that portrayal help or hurt the sport? I think it will bring awareness [to the sport]. I’m sure there will be some cringe moments when we watch it, but that’s to be expected.

Lastly, it’s August, so where would you rather be, Del Mar or Saratoga? Do I have to answer that?

You should take a stab at it. You can waffle, if you like. If Del Mar had a Shake Shack, I’d consider it. But for now, I’d be at Saratoga. And, if I may say so, I’d still rather be at Monmouth any day.