The Green Bay Packers of the National Football League recently tendered 250,000 additional shares of common stock for the purpose of expanding venerable Lambeau Field. Each share sold for $250 plus a $25 handling fee. However, contrary to typical stock transactions, the purchasers have absolutely no prospect of making money on their investment because the shares will never go up in value and pay no dividend. This was the deal that eager buyers were willing to take for the quid pro quo of calling themselves a team owner and receiving an invitation to the annual shareholders meeting.

The Green Bay franchise is unique in that it is the only one in the NFL that is owned by the public. Moreover, it is located in a small city in which the Packers are the only major professional team. Nonetheless, the Packers cultivation of fan loyalty is still plenty amazing.

Such a one-sided financial transaction as the Green Bay stock offering epitomizes the power of rooting interest. Fans so much want to identify with their team that they are willing to give it $275 for a monetarily worthless share of stock. The same kind of sporting proposition attracts people to horse-racing partnerships, most of which lose money.

Horse racing occasionally has a runner come along that stirs passion among fans and intrigues even casual observers. Thus the argument is put forth that racing would benefit if top-flight Thoroughbreds were left in training longer so they could develop a following. Zenyatta showed this to be a valid point when she raced as a six-year-old.

Yet rooting interest in horse racing that is built around a star performer is a fragile and transient phenomenon; racehorses have a relatively short shelf life, whereas an elite NFL quarterback like Aaron Rogers can last more than a decade. Television ratings for the 2011 Breeders’ Cup plummeted because the equine celebrity from the previous year was down on the farm.

In horse racing, enduring fan interest must be cultivated and perpetuated more by revered events and desirable racetracks than by super racehorses that emerge ever so often. The Triple Crown races are a sporting/social tradition and attract on-track attendees and television viewers who are not year-round fans of horse racing. Churchill Downs is able to extract seat license fees from people who want to immerse themselves in the Kentucky Derby experience, regardless of what horses happen to be running. Similarly, racetracks like Del Mar, Keeneland, and Saratoga offer distinctive lifestyle experiences, coupled with high-quality racing, that keep people coming back year after year.

Racetracks with a long-term future must offer customers something compelling. It may be an event or an ambience or attractive races to bet on. From time to time, a charismatic horse will come on the scene to add pizzazz to the recipe.

Copyright © 2012 Horse Racing Business

Originally published in the Blood-Horse. Used with permission.