Q&A: Breeders’ Cup CEO Fleming Reflects On Challenging Year

Drew Fleming was named CEO of Breeders’ Cup Ltd., in November 2019 after serving three and a half years with the organization, first as senior vice president of development and administration and later as chief operating officer. A graduate of Washington and Lee University and the University of Kentucky law school, Fleming came to the Breeders’ Cup from Lexington-based Stoll Keenon Ogden, where he focused on corporate law with an emphasis on equine transactions, mergers and acquisitions and venture capital. Stoll Keenon Ogden serves as legal counsel to the Breeders’ Cup.

Three months into his tenure as CEO, the coronavirus pandemic hit, causing global economic havoc on many businesses, including sports leagues and organizations, which were forced to cancel, downsize or reschedule events. While focusing on planning for the two-day world championships that will take place at Keeneland in Lexington, Ky., on Nov. 6-7, Fleming also played a significant role in the creation of the Thoroughbred Safety Coalition and the advancement of federal legislation, the Horseracing Integrity and Safety Act, that had been at a stalemate.

Fleming was interviewed by Paulick Report publisher Ray Paulick.

Paulick: In the midst of the coronavirus pandemic, what’s been the biggest challenge to staging this year’s Breeders’ Cup?

Fleming: The world as a whole is grasping with COVID-19, including major sporting events. Back in March, when the world was essentially shut down, Breeders’ Cup looked at every single aspect of our world championships and had to reevaluate, reassess and in some cases change what we were doing. We’ve taken extensive time and attention to make sure that the safety is consistent with CDC guidelines. We will always put the health and safety of our fans first and foremost. We’ve come up with safe protocols that have been applied that will make sure safety will be dealt with.

It’s been a complete team effort by many, many people: health officials, including the former head of infectious diseases for the University of Kentucky, local government officials, state officials. Countless people were involved just in being able to pull the Breeders’ Cup off. It’s been an honor to be involved in the process. It’s been an awakening to me to see how resilient our industry is and how we all come together in times of crisis.

What do you anticipate the total number of people that will be on-site each day, including essential personnel and the connections of the participating horses?

We made the sad decision to not permit fans to attend, which was a difficult decision but we made it when we did because we knew fans would normally come from all over the United States and the world. We wanted to be fair to them and give them due notice. We are limited to participants: owners, breeders, jockeys, trainers and a very limited number of sponsors. I don’t know the specific number yet.

What kind of hoops did you have to jump through to secure any exemptions for international travel? The international participation this year is robust – the second-highest number ever.

I think that’s a testament to racing and our board to keep our purses and awards at $31 million, and we thank the breeders for letting us be in a position of strength to do that. We’ve been working closely with the Department of Homeland Security, and back in May President Trump made a “major sporting event” exemption. We’ve been working with our local legislators and the Department of Homeland Security to make sure we meet the criteria for a “major sporting event.” We’ve been having daily, if not more frequent, dialogue with them for quite a while to make sure the athletes and their essential team members can come over to compete.

Coming off a record year – $174 million in handle for the two days at Santa Anita –  what are your expectations from a wagering standpoint, given the declines we’ve seen in the rescheduled Triple Crown races?

It’s really an unknown, but there are a couple of factors we’ve been closely evaluating. One, the amount of on-track wagering will be severely reduced, and betting at off-track facilities will be significantly reduced, both as a direct result of COVID-19. But we’ve seen a significant increase in ADW wagering. One of the questions will be what percentage of both on-track and OTB wagering will convert to ADW wagering. I know you mentioned Triple Crown races had declined, but there were smaller field sizes and non-traditional dates. Fortunately for us, we’ve had the second highest pre-entries in the history of the Breeders’ Cup, including as you mentioned the second highest number of international horses. We are having very, very strong fields. The racing will be world class without question. We are hopeful and energetic that our fans, though they can’t be here in person, will see the great product out there and have fun placing a bet.

To make sure that they have that true at-home experience and want to connect with the Breeders’ Cup, we’ve done two things. First, we’ve done an awareness campaign. This was planned pre-COVID. While one might think it’s easy to cut expenses and not have an awareness campaign like this, we felt it was important for racing and our industry to go forward with it. It’s a campaign focused on general horse racing fans and sports fans, to show them the beauty of the athlete, the passion for horse racing, how great our sport is, and hope that they tune in on Nov. 6-7 to watch the world’s best horses compete.

Second to that, back in February and March, when we started to learn more about COVID, we came up with many different scenarios. One that we obviously didn’t want to have was that we wouldn’t be able to have fans in person at the track. We wanted to make sure they had the best at-home experience possible. We’ve done a lot of great work with TVG and NBC, and this will be the most robust on-site production ever for a horse racing event. We’ll have access to more than 80 cameras on-site, including two jockey cams and the “batcam,” which is a high speed camera on cables that moves down the backstretch. In addition to the television broadcast, we’re having a second screen, which is digital for phones and iPads. Part of that is the new Contenders Cam, where fans can watch a specific horse or more than one specific horse from the time that horse enters the paddock until it goes into the starting gate. That’s really geared toward bettors. We spent a lot of time and effort and made a significant investment. I think everyone’s going to be blown away at how cool the technology is.

You mentioned maintaining purse levels. There were planned increases for 2020, which you obviously held off on. Were there discussions about cutting purses?

Given the financial uncertainty, we were looking at it from all different angles, but it was a very unanimous decision from our board that we are in a position of strength, thanks to the breeder support for many years, and while we are in that position of strength we felt it was important to give back in order to show the strength of the Thoroughbred industry and to highlight the world-class racing and world-class purses. So, yes it was discussed, but it was very brief, and everybody was very supportive of keeping purses and awards what they were in 2019.

Because the Breeders’ Cup has significant cash reserves, you can afford to do that. How much of a hit are you taking from the loss of ticket sales and, possibly, sponsorships?

It’s a little too early to have actuals, but the last time we were at Keeneland in 2015, we sold $15-$16 million in tickets. Obviously, we’ll be nowhere near that. We are very fortunate, though, to have great corporate partners, and they’ve seen and are very excited about the new ways we will be highlighting the Breeders’ Cup, are on-board with our awareness campaign, and are very supporting with the technology and innovation we’ve been doing for the at-home experience. It’s definitely a challenging year from a financial standpoint, but that’s why the reserves are there. We are still going to do everything we can to promote the Thoroughbred industry, even in difficult times.

Between anticipated losses on the event and likely declines in 2021 revenue from lower stud fees, do you expect Breeders’ Cup will have to undergo some belt tightening?

I don’t want to speculate at this point. One thing I’m proud about with the Breeders’ Cup, is we publish our financials. We are an open book, we are transparent. Obviously, it’s a moving target, but we are in a great position of strength and I think, despite some financial things we wouldn’t like or anticipate this year,  we are going to have a great Breeders’ Cup with world-class racing, and we are very proud of that.

From my perspective, the Challenge Series really seems to have caught on. How do you feel it’s been embraced by the horsemen?

Horsemen around the world love it. We had 86 different Challenge races this year, I believe in 12 countries. We’ve had 48 Challenge Series winners pre-enter the Breeders’ Cup, which is a testament to its success. It does a couple things: one, it keeps Breeders’ Cup top of mind all year long, and two, it’s a great thank you to our breeders that we are able to offer these Challenge Series races so that horses automatically qualify for the Breeders’ Cup and their entries are paid for. We absolutely love it. It’s been a tremendous success and we are going to continue to have many Challenge races.

What’s different from an on-track safety and integrity standpoint this year?

As always, we are putting the safety of our athletes and the integrity of our sport as a top priority. We’ve been working with the Thoroughbred Safety Coalition as well as Dr. Larry Bramlage on a number of reforms, but Breeders’ Cup will always have the best veterinary team on site, 72-hour surveillance, out-of-competition testing, medication protocols, in addition to six new recommendations that will be in place this year.

No one in American racing is more high profile than Bob Baffert. He’s now named in four separate medication violations in three states this year, in addition to the 2018 Justify case that’s been reopened by the California Horse Racing Board. Is his right to participate in the the Breeders’ Cup in jeopardy because of policies that were adopted a few years ago?

The situation is challenging, but until these most recent charges are adjudicated, Mr. Baffert is not under suspension in any jurisdiction in the United States, particularly not in violation of any Kentucky regulation or any existing Breeders’ Cup rule. As of now, he is not prohibited from participating in the world championships. But like all Breeders’ Cup participants, his horses will be subject to the same stringent medication restrictions, testing protocols – including out-of-competition testing – surveillance and pre-race veterinary exams. As I mentioned earlier, we will always put the safety and integrity of our races first and foremost.

Similar to that, Breeders’ Cup is going to continue to advocate zealously for passage of the Horseracing Integrity and Safety Act. We believe its passage will create uniformity across the United States in the 38 fragmented states, offer transparency and hopefully have timely solutions moving forward.

What role did you play in bringing Churchill Downs Inc. and The Jockey Club together in support of this legislation? It’s well known these two organizations were not working in concert with one another, and my understanding is you played a significant role in bringing the two parties together.

I think it’s important that everyone gets credit for this, because it was a true team effort. Thanks to The Jockey Club, thanks to Churchill Downs for working with the Breeders’ Cup, The Stronach Group, New York Racing Association and many other racing organizations that see the need and passion to move forward with federal legislation. We were presented with a unique opportunity to act as a facilitator, similar to what we did with the Thoroughbred Safety Coalition, and we were able to have good dialogue among many parties to bring the industry together. It was a first step, but it was a very important first step. The Horseracing Integrity and Safety Act has passed the House of Representatives, it’s currently in front of the Senate and we are very hopeful for its passage because it will be a watershed moment for our industry.

Senate Majority Leader Mitch McConnell of Kentucky, who is now a co-sponsor of the bill, had hoped to get it passed by the Senate before the election. That didn’t happen. Where do things stand now?

We’ve been working with a number of officials in Washington, D.C., and it remains a top priority for many. It’s important that it’s a bipartisan bill supported by Sen. McConnell and Sen. Gillibrand (of New York), among others. I think everybody is still intent on moving forward and getting this passed.

The post Q&A: Breeders’ Cup CEO Fleming Reflects On Challenging Year appeared first on Horse Racing News | Paulick Report.

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