ESPN Bets on the Breeders’ Cup

This past Saturday a 50-1 shot won the Kentucky Derby. ESPN is pretty sure its odds of successfully marketing the Breeders’ Cup are better than that.

“We are reviving and recommitting to horse racing,” Len DeLuca, ESPN’s senior vice president of program strategy, insisted several days after the cable network had copped television rights starting in 2006 for the day of racing known as the Breeders’ Cup World Thoroughbred Championship. “We think it’s a growth sport that has experienced a renaissance in the last four years.”

The problem is, the Breeders’ Cup is about as well known to most Americans as the Cartier World Cup (that’s a polo event, by the way).

NBC has broadcast the Breeders’ Cup since its inception in 1984, and the ratings have sharply declined over the past two decades. The five-hour marathon telecast goes a long way toward determining the champions in racing’s myriad divisions.

Contrast the Breeders’ Cup to this past Saturday’s Kentucky Derby, one of the most watched events of the year, which has averaged about a 7.0 Nielsen household rating – 7% of all homes with TVs were tuned in – from 2001 to 2004. That’s five times the number of households that tuned in to last year’s Breeders’ Cup. It’s even higher than most NBA playoff games. And when there is a potential Triple Crown winner, the Belmont Stakes has lured 11 million homes in recent years.

ESPN plans to expand the Breeders’ Cup to seven hours and, with sister network ESPN2, throw on 130 additional hours of racing telecasts to help promote the race.

“ESPN has the ability to extend [coverage] and televise any number of hours they think is practical surrounding an event,” notes Mike Trager, a sports marketing consultant and former chairman of the TV division of Clear Channel Entertainment. That’s one reason that some in the racing industry feel that the Breeder’s Cup—and racing as a whole—might get a boost from appearing on ESPN, even though NBC is seen in about 20 million more homes.

ESPN is counting on its usual cross-platform juggernaut to create a groundswell for racing as it did for poker. Besides its popular Website, the network owns a radio network, a magazine and sports bars with which it can put the Breeders’ Cup right into mainstream America’s face. The Disney-controlled company can also leverage its new ESPN Desportes, a Spanish-language network, as well as ESPN News.

Moreover, starting in 2006 sister network ABC has swiped the rights for the Belmont Stakes and ESPN will likely televise races leading up to the marquee event that day. And ABC has hinted it could even move the Belmont over to ESPN by 2008.

Nonetheless, ESPN has quite a challenge. Total wagering on the horses fell by 1% in 2004, while other forms of popular gaming, such as casinos, lotteries, and poker are gaining in popularity. And the racing audience is an old one compared to most other sports on TV, according to a research report from Magna Global USA,

DeLuca said ESPN isn’t looking at those numbers, though, but rather on the estimated $5 billion in revenue derived annually from Internet wagering as well as the network’s growing presence overseas where horse racing remains popular. Not that ESPN is about to take bets. Its business is content, DeLuca said, and few fans devour statistics and other data online more feverishly than racing buffs, who often sift through mountains of information while wagering from the comfort of their homes.

But some racing experts warn that ESPN needs to update the sport’s marketing strategy. Ray Paulick, editor of the industry publication “The Blood-Horse,” notes that poker has thrived largely because of the Runyonesque gallery of rogues portrayed each week on cable.

Paulick says that racetracks have tended to deemphasize the gambling aspects of the sport in its marketing strategies. The National Thoroughbred Racing Association, a group formed in the 1990s to market the sport, created the slogan “Go Baby Go” to promote racing and originally used a coterie of minor celebrities such as actors Lori Petty and Rip Torn in its ads.

Many involved in the sport thought the campaign weak. But the National Thoroughbred Racing Association says the promotion raised racing’s profile and popularity. The group points to an ESPN Sports Poll released March 21 that shows fan interest in the sport has grown for five straight years. According to the survey, conducted by TNS Sport, 37.4% of the 18-and-over population are at least “a little bit interested” compared with 31.4% in 1999, putting it ninth among the 29 sports the poll measured.

But Paulick believes that racing must take a page out of poker’s book in order to grab the public’s imagination: “If they have a guy who figured out how this horse was going to win and won a couple of hundred thousand dollars, people can identify with that.”