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Financial Statements 2001-2002 NTRA Annual Report to the Membership Commissioner’s Message n unprecedented combination World Thoroughbred Championships; of events—the tragedy of building greater industry consensus ASeptember 11, a shrinking on key economic policy issues; and national economy, the loss of necessary steps to strengthen the Kentucky foals to Mare Reproductive organization itself. Loss Syndrome and a downswing in Already, we have made progress the Thoroughbred sales market after a on those goals. long run of increases—created, under- After consolidating operations standably, a mood of uncertainty in with Breeders’ Cup Limited, we are the Thoroughbred industry in 2001. stronger operating as one virtual Still, there were positive develop- enterprise and thus much better ments: record pari-mutuel handle and equipped to fulfill our shared mission: purses for the eighth year in a row, improving the popularity of horse- another year of growth in fan interest racing and enhancing economic condi- in our sport, and impressive new tions in our industry. momentum for our sport’s signature The first product of the combina- events, the VISA Triple Crown and the tion was a program to re-brand both Breeders’ Cup. the Breeders’ Cup and the divisional For the NTRA, the year also races leading to it that help to deter- included a period of review and self- mine our sport’s annual champions. study, the result of which is a revised The goal: to make our most important business and strategic plan that day more understandable and accessi- should make our organization and our ble to the public and to sponsors. industry stronger for years to come. Re-branding the Breeders’ Cup as As outlined in its Revised Business the World Thoroughbred Champion- Plan for 2002-2005, the NTRA brings ships and the preceding graded stakes renewed focus to five key areas: core as the Road to the World Thorough- marketing programs; enhanced leg- bred Championships elicited positive islative and political capabilities; brand reaction from both consumers and development for the Breeders’ Cup sponsors. Three major marketing The 2001 Breeders’ Cup World Thoroughbred Championships at Belmont Park was dedicat- ed to the families of the New York police, firefighters, Port Authority workers, EMS per- sonnel and other victims of September 11. 2001-2002 Annual Report partners were recruited under included the passage of legisla- to the Membership the new strategy: Bessemer tion for MRLS relief and the TABLE OF CONTENTS Trust (Juvenile), Penske Auto recent passage of economic Commissioner’s Message Centers (Sprint) and John stimulus legislation that pro- Deere (Turf). vides positive tax benefits for 2001 World Thoroughbred Championships .........................2 An additional benefit—and horse owners via increased Financial Highlights ....................4 driver—of the re-branding depreciation rates for horses. 2002 Board of Directors ...............6 program was the extension of Atop our list of legislative Marketing & Advertising .............8 our television contracts. The priorities for 2002 are federal Breeders’ Cup NBC contract legislation recognizing horses Promotions & New Media...........10 has been renewed through as livestock that, if passed, Television.....................................12 2005, with increases in related would make horse owners and Sponsorship ...............................14 programming and promotion breeders eligible for low-inter- Legislative & Regulatory...........16 and a recapturing of the inter- est loans and other government Industry Programs .....................18 national distribution rights, economic relief in the event of Organizational Structure ...........20 which we believe will be highly any future catastrophic losses; A Final Word...............................22 beneficial to the NTRA as we and proposed legislation to Financial Statements ..................23 seek to market the World eliminate the 30 percent with- Thoroughbred Championships holding on foreign wagering internationally in future years. into U.S. pari-mutuel pools that are critical to our collective We have also forged an agree- that, if passed, would increase growth. ment with ESPN, extending domestic handle. The manner in which our our Road to the World We also have established industry met its recent chal- Thoroughbred Championships the Horse Caucus, a long-term lenges—and there were many in and Triple Crown program- program to educate members 2001—should, in fact, produce ming through 2008. of Congress about our industry optimism about horseracing’s In tandem with efforts to and the $34 billion agribusiness future. We are stronger and promote our sport’s top-caliber it supports. more focused on achieving events, the NTRA has updated We have created an common goals than ever. As its national and co-op advertis- improved group purchasing the NTRA moves into “Phase ing, significantly increased program to deliver to our Two,” we hope that you will consumer promotions for the members substantial savings continue to share your views, coming year and improved our on products and services from advice and support. use of the Internet for player nationally recognized vendors, development. Much of this including our marketing Sincerely, re-energized marketing effort partner John Deere. NTRA is directed at those nearly 20 Purchasing enables the NTRA million casual or “light” fans to diversify its revenue sources who enjoy horseracing but while adding to its member Tim Smith attend the races only once or benefits. Commissioner twice a year. Throughout 2001, Lastly, we have worked we engaged in in-depth, attitu- diligently to gain industry dinal research to uncover ways input—and, wherever possible, in which we can encourage this policy consensus—on alterna- very large and important target tive gaming, account wagering, audience to attend the track economic deregulation, tax more frequently. reform, drug testing, medica- Legislative highlights tion policies and other issues 1 2001 World Thoroughbred Championships The emergence of the Breeders’ Cup World Thoroughbred Championships was both a logical step for the event, one The Breeders’ Cup has of the world’s premier days of racing, and an extension of steadily progressed as an the tradition of Thoroughbred racing, a global sport since international event since its its founding in the 17th century. founding in 1984, growth made possible by a global infrastructure of racetracks, n October 27, the newly training centers and breeding branded $13 million farms and a worldwide audi- OBreeders’ Cup World ence of horseracing fans. With Thoroughbred Championships a presence in 53 countries, brought a record crowd of Thoroughbred racing attracts 53,000 to New York for the $100 billion in annual wagers. area’s first major international To continue that growth, championship after the NTRA and Breeders’ Cup are September 11 attack on the working this year to build World Trade Center. Thoroughbred racing’s world Dedicated to those lost on media presence with more 9/11 and their families, the internationally televised races, World Thoroughbred Champion- foreign sponsorship extensions, ships day alone raised more The strongest-ever fields published rankings for leading than $2 million for relief efforts of U.S. and international run- domestic and international from horseracing’s international ners assembled, their brilliance horses pointing to the World community. Owners, trainers underscored by record on-track Thoroughbred Championships, and jockeys from the United handle of $13 million and total extended simulcasting and States, Dubai, Ireland, Saudi handle of more than $104 improved free television Arabia, England and India million. Three of the eight coverage of the event in key pledged purse earnings from Championship races, each foreign markets. the event, including 100 percent featuring horses with interna- by the Godolphin Stable of tional connections, were won Sheikh Mohammed al Maktoum. by European-based runners. Thoroughbred racing has its origins in international trade. The Thoroughbred breed began in the 17th century, when stallions from the Middle East were imported to England and bred to local mares. 2 Kentucky Derby winner Zev defeated Epsom Derby winner Papyrus in a $100,000 match race at Belmont Park on October 20, 1923. The race, the International Special, marked the first time an English champion had been sent to the U.S. to race. Public interest in the race was so great that it was broadcast on the radio—a first. Within two days, films of the race were distributed at movie theaters in New York City and, eventu- ally, across the nation. 3 Financial Highlights Priorities for 2002 include renewed emphasis on core marketing programs, augmented by a one-time, $1.5 million cash infusion from 2001 net operating revenues, designed to stimulate incremental attendance and pari- mutuel handle during 2002 at NTRA member facilities. The figures represent budget- ed projections for the calen- Operating Revenues 2002 Budget* 2001 Actual dar year 2002 and do not include Subsidiaries. Revenues from BCL $31,150,000 $32,968,777 Consolidated Financial Membership dues 18,431,000 19,110,737 Statements for National Thoroughbred Racing Television, sponsorship & promotions 7,320,000 4,853,662 Association, Inc. and Drug Testing Task Force 534,000 530,445 Subsidiaries are attached as Other revenues — 188,838 an appendix to this report. Total operating revenues 57,435,000 57,122,014 Operating Expenses Television 6,874,000 7,396,185 Sponsorship 2,963,000
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