Every year the average American sports fan cares about horse racing for a maximum of five weeks. The interest begins at the Kentucky Derby continues through the Preakness and then either ends or grows through the Belmont Stakes, depending upon whether there is a horse with a chance at winning the Triple Crown.
This year California Chrome entered the Belmont with a chance to become the first horse to claim the title since Affirmed in 1978. The possibility of that has traditionally brought huge television ratings and a much larger paying attendance at the track. This year was no exception as Comcast's (NASDAQ:CMCSA) NBC averaged 21.3 million viewers during the race, according to The Hollywood Reporter. Viewership in the Belmont the last five years, with no Triple Crown at stake has ranged between 4.9 and 7.7 million, according to Nielsen.
The total handle (amount bet) on the Belmont Stakes was $90.3 million, according to the NYRA, 32.7% better than the record of $68 million set in 2004 when Smarty Jones failed to take the Triple Crown. The total handle on the card was $150.3 million, according to NYRA, beating the previous 2004 full-card record by $39.3 million.
That's all a nice one-day boon that may create a few new race fans and draw a little extra business to tracks around the country over the summer racing season, but a failed attempt to win the Triple Crown does nothing to change the long-term economics of horse racing. The question that remains is whether a successful bid would turn the sport from a three-times-a-year (at most) novelty to a more mainstream sport that holds the public's attention outside three races.
A celebrity horse can draw interest
Horse racing makes its money from fans coming out to the track, paying to get in, and betting on the races. A small amount of horse races are broadcast on television and when they are networks, of course, make their money selling ads, which are priced based on how many people are expected to be watching. NBC has not released any figures for the Belmont on how many ads it had pre-sold and how many it sold (likely at much higher prices) after the Preakness. But the network basically doubled the amount of hours devoted to covering the race.
Still, even if California Chrome had won, it seems unlikely that the sport would gain any significant long-term traction. Yes, there would be a publicity boost and more eyes on the sport than usual, but star horses over the last few decades have not built sustained interest.
One recent example was Cigar -- a horse that went on a stunning 16-race winning streak beginning in 1994. As the wins piled up so did interest in the horse, bringing large crowds wherever he raced as well as television deals for races that otherwise would have gone unaired. Cigar was a star that crossed over into mainstream recognition. But once the streak ended and the horse retired, horse racing quickly returned to what it was.
The same thing happened in 2004 with Smarty Jones, a popular horse that couldn't sew up the Triple Crown at the Belmont. After Smarty-mania died, interest in horse racing receded to its standard level.
Can this be changed?
The right horse can captivate America's attention and make horse racing matter for a short time. But star horses are rare and the sport lacks a mechanism to create them. One way to change that would be to alter the structure of the Triple Crown in the way California Chrome's owner suggested after his horse lost. In what many took as a bitter rant, co-owner Steve Coburn fumed that his horse was unfairly picked off by an opponent who had rested while California Chrome was earning his victories.
"Triple Crown, that means three — not one, not two — triple means three," he said. "If you don't realize that maybe you need to go back to school and figure this out. Triple means three. If something isn't done I will never see a Triple Crown winner again. I'm 61 years old."
Coburn is right, but it's about marketing, not fairness. Part of the reason NASCAR can attract around $3 billion a year in sponsorship dollars is that people know the drivers. In horse racing the horses are the potential stars but the current setup makes it so only one horse can break out each year.
Horse racing should start the run-up to the Triple Crown the year before with potentially contending two-year-olds racing for points and slots in the showcase trio of races. Much like UFC does with its Ultimate Fighter reality show, this would build recognition of potential stars. Once the Derby arrives, a field would be set that would be locked into competing in all three races (barring injury). If people know the horses (and their jockeys to a lesser extent) the potential for rivalries and multiple stars would exist.
If that happens -- even if no Triple Crown winner emerges -- every year would create a group of new horses that people could care about. As those new stars race as four and five-year-olds they would compete with previous and next-year stars, making for more interesting races.
It's a long shot
The biggest problem for horse racing has been that owners are all out for themselves. Horses sit out the Derby and the Preakness to ruin a potential Triple Crown run because the winner of the Belmont gets an $800,000 purse. Racing horses is expensive. In New York State the cost to own and condition a thoroughbred race horse runs about $46,000 per year, Andy Schweigardt, director of industry relations and development at the Thoroughbred Owners and Breeders Association told Fox Business. That doesn't factor in that buying a race horse can cost from $1,000 to over $1 million depending on its lineage.
To grow horse racing the sport needs recognizable horses. Creating those means changing the rules so the sports stops being a free-for-all and starts operating as a cohesive whole. That's a monster task. It would require getting owners, race tracks, and television networks who are used to acting only in their own best interests all on the same page.
If the Triple Crown races all featured the same horses we likely would see a horse claim the crown. Even if that didn't happen, we would at least create multiple star horses that could match up for a few years, giving more name attractions to races beyond the big three.
It's unlikely horse racing can ever approach NASCAR dollars -- race car drivers can have careers that last 30-plus years while horses are lucky to race for four or five. Still, if horse racing borrows liberally from auto racing, it could be much bigger than it is ... even without a Triple Crown winner.
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Daniel Kline has no position in any stocks mentioned. He is an avid horse racing fan. The Motley Fool has no position in any of the stocks mentioned. Try any of our Foolish newsletter services free for 30 days. We Fools may not all hold the same opinions, but we all believe that considering a diverse range of insights makes us better investors. The Motley Fool has a disclosure policy.