Archives for May 2022

The 2022 Preakness attracted 60,000 people.  In the five years prior to the COVID pandemic, attendance averaged 134,601 (in 2020 and 2021, attendance was intentionally limited).   It would be easy to dismiss such a huge drop to the fact that Kentucky Derby winner Rich Strike was not in the field. Or to the 95-degree heat on Preakness Day.  But such a huge decrease can’t be explained away…it was a disappointing result.

Some might say that people are still cautious about mingling in large crowds, which is true.  But this is unlikely to have accounted for an attendance decrease of over 50% from pre-pandemic years, especially in light of the crowd of nearly 150,000 that showed up at Churchill Downs for the Kentucky Derby two weeks earlier.  The Preakness is the weak link in the Triple Crown series and an objective assessment by ownership, the Stronach Group, is needed to determine how it can be enhanced. 

Betting handle from all sources on the 14-race Preakness-day card was $104.3 million, down 8% from the record handle of $113.4 million in 2021.  Handle on the Preakness race itself was $65.3 million, a decline from $68.7 million in 2021, or 5%.

Television ratings for the Preakness averaged 5.26 million viewers and peaked at 6.6 million during the 7-7:15 p.m. segment when the race was run.  In 2021, the Preakness averaged 7 million viewers and peaked during the race at 8.6 million.  The ratings are about the same as in 2019, when the Kentucky Derby winner Country House did not run.

Absent Preakness winner Early Voting to take on Kentucky Derby champ Rich Strike, the Belmont Stakes nonetheless should do well for a year in which there can be no sweep of the Triple Crown races.  People will watch to see if Rich Strike’s Kentucky Derby victory was a fluke and many will root for the underdog colt to show that it wasn’t. 

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If one were to look solely at sales figures from leading Thoroughbred auction houses Keeneland and Fasig-Tipton, the conclusion would be that the American horse racing enterprise is buoyant.  Expand the view to include the retail side of racing and the outlook is cautionary.  While the bloodstock segment of the racing business is indeed healthy, the retail or racetrack segment is imperiled…and a major reason is that real estate values have soared for the land on which most racetracks sit.

A diminishing number of racetracks means, of course, that there will be fewer and fewer places to race horses.  In addition, live racing is how new fans tend to be cultivated. 

The sale of Arlington Park to the Chicago Bears and cessation of racing there leaves the nation’s third-largest city with a single racetrack.  Other racetracks that reside on land more valuable for development than racing encompass, among others, Santa Anita Park, Aqueduct, Gulfstream Park, and Golden Gate.  In Florida, the 2022 closing of Pompano Park leaves harness racing with no presence in the state.  The same fate could happen to Florida’s Thoroughbred tracks, Tampa Bay Downs and Gulfstream Park.

In Great Britain, the Jockey Club owns 15 racecourses, such as prominent tracks like Epsom Downs and Cheltenham.  It also owns 5,000 acres, mostly at Newmarket, that are used for training and racing.  By contrast, the vast majority of the racetracks in the United States are owned by corporations that have little or no connection to the bloodstock side of the racing industry (Keeneland is the obvious exception).  With the approaching sale of Frank Stronach’s breeding operation, Adena Springs, the Stronach Group’s Thoroughbred racetracks–Santa Anita Park, Golden Gate, Gulfstream Park, Laurel Park, and Pimlico—will no longer have a significant family connection to the breeding side of racing.

When older American racetracks were built, they were structured to accommodate the large on-track crowds of the day–long before remote wagering–and were located in areas then untouched by urban sprawl.  Now huge grandstands are largely unneeded and expensive to maintain.  And, with the relentless expansion of cities to the suburbs, tracks are often worth far more for commercial uses and housing than for racetracks.

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Avid bettors on horse racing know how to get the best Grand National or Kentucky Derby odds but may not know how the jockeys who pilot the horses are compensated or how much they earn.

Jockeys are independent contractors and don’t receive a salary, similar to professional golfers and tennis players.  In this respect, they are one-person businesses.  A jockey must pay his or her agent, who is responsible for obtaining mounts, as well as pay a valet…and also has outlays for expensive health insurance, taxes, and incidentals.

A jockey gets a modest fee for riding a horse (between $30 and $100 in North America) and receives additional cash if the horse finishes in the money.  For instance, when jockey Sonny Leon recently won the 2022 Kentucky Derby aboard Rich Strike, he earned 10% of the winning owner’s share of the total purse.  The Kentucky Derby purse was $3 million and the winning owner grossed 62% of this amount, or $1.186 million.  Leon received 10%, or $186,000, for his ride.  After paying his agent 25% and his valet 5%, he netted about $130,000 pretax.  The jockeys on the second and third-placed horses received, respectively, 5% of $600,000 (20% of the $3 million purse) and 5% of $300,000 (10% of the $3 million purse).

This was the biggest payday ever for Leon, as he had never before won a graded stake, which are the most lucrative races.  Leon’s career has been spent mostly at racetracks that don’t offer many graded stakes, if any at all, where jockeys ply their hazardous trade out of the spotlight.

Premier jockeys like Mike Smith and Irad Ortiz are in high demand for graded stakes and have the opportunity to earn large sums.  But the vast majority of jockeys don’t get mounts in top-flight races.  According to Career Trend, average annual earnings for jockeys in the United States are between $30,000 and $40,000, which is a range skewed to the high side by the million-dollar-plus earnings of the best jockeys.   

More realistically, Career Trend estimates that half of the jockeys in North America earn less than $12,000 annually.  Betting USA puts the figure at less than $20,000 per year.  Either way, most jockeys are in a dangerous occupation and earn very little for the risks they incur. 

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