Carter Carnegie | Horse Racing Free Tips

The Sports Business Furlong: Michael Behrens, Founder and CEO of MyRacehorse

Michael Behrens is synonymous with innovation in the racing industry, having brought the concept of microshares into everyday conversation. His MyRacehorse struck gold early–and almost immediately–when Authentic (Into Mischief) won the 2020 GI Kentucky Derby and GI Breeders' Cup Classic en route to Horse of the Year honors just months after buying in. Carter Carnegie recently had a conversation with Behrens, who remains in the news with other high-profile investments, including a recently announced partnership in two-time champion Monomoy Girl (Tapizar).

CC: Please share your favorite racing memories.

MB: That one is easy. It was the first Saturday in September 2020, and it was when Authentic turned back Tiz the Law [Constitution] and won the Kentucky Derby. For me personally, as an entrepreneur, it was a combination of years of getting this idea off the ground and getting the business going and the hard work of a lot of people to help me get it to that point. Two, it was the first time ever you had over 5,000 people that had the same vested interest. And third, it was in partnership with Mr. [B. Wayne] Hughes, who has been such a tremendous partner on this journey. So, there's definitely nothing close to it. That's been the pinnacle for me in racing.

CC: Can you share a brief history of your professional career?

MB: It's not in racing. Racing has been my joy and my place of decompression and to let loose after a tough week at the office, but the reality is I spend most of my time in e-commerce, ad tech, and marketing.

CC: What was your motivation to explore microshares?

MB: As a marketer, my obsession was how brands are built and how categories are created. As a fan of racing, I had been searching for the reasons that were holding racing back from a prominent place in the sports entertainment landscape in America, and came to the conclusion that the sport was very difficult for people to try to experience. [I thought] the best possible way to do that was to experience it through the lens of ownership. This is a sport that has really struggled with attracting new fans and educating fans how to experience the sport. Microshares became what I believe to be the perfect product to meet that need.

CC: What similarities do you see between what Casper Mattress did to the mattress industry during your time as chief marketing officer and what you are doing with MyRacehorse in the Thoroughbred industry?

MB: You wouldn't think there's a lot of similarities, but there's a common trait as both industries were stale and lacked the desire to promote innovation. Prior to Casper, the mattress industry provided a terrible buying experience. [Casper] proved to be ridiculously disruptive to the mattress industry because it offered the consumer a better product and a better experience.

The same thing is true in racing. It's been done the same way for decades, and people have either not thought of or had the wherewithal to bring a lot of disruptions to its business model. My obsession is to understand the consumer, what their wants are, what the desires are, where they find frustrations in each industry. In the case of racing, it was unlocking a way to make a fan participatory without just focusing on betting.

CC: What are some of the key results that you believe have benefited the Thoroughbred industry through microshare participation?

MB: A lot of people will think the obvious: that MyRacehorse in a very short period of time has come in and bought a lot of bloodstock. As a new player, the amount of bloodstock we have been able to purchase benefits a lot of people whose livelihood relies on raising, training, or caring for Thoroughbreds, but I think that's just a small fraction of the influence that MyRacehorse and the community that we have develop has had. These fans are bringing in new fans. These new fans are spending time in racing content, on racing media websites, and hopefully–after COVID–returning to the track. They are also very active wagering as our horses' odds definitely indicate compared to the morning line. Therefore, more than our bloodstock acquisitions, I think what's

exponentially bigger is the amount of people that we've re-energized or newly captured and brought them into the entire ecosystem.

CC: With such a large community, how do you manage/balance the natural restrictions of providing real-world experiences while keeping the microowners engaged and participatory in their investment?

MB: Like most brands, it is being able to give a rewarding digital experience by providing unique content and experiences within the digital platform. And then balancing that with being opportunistic and how you can have the physical experiences we've been able to deliver. Prior to the pandemic, outside of a few big days, the racetracks have a lot of capacity. We don't have to shy away from the fact that racing is widely enjoyed and really appreciated when you're in the physical environments of the game. Some racetracks have really embraced this concept, Santa Anita specifically, who has been a big supporter of ours early on and did a lot to get our fans to come out and enjoy racing. I expect that's going to be a huge part of 2021 and beyond as we're seeing a lot of demand to attend the racetrack. But the digital side supports the largest percent of our owners and we have great online communities which are very vibrant as well.

CC: Do you think MyRacehorse is a powerful marketing platform for the sport?

MB: It's becoming a very significant channel. Our customers are becoming brand ambassadors that are sharing their visits to their horses, the race results they've had, and their connection with the other stakeholders. Our community is very active in sharing that kind of content in their own personal networks. I think that's how categories like racing can achieve scales. When you think about the size of our community and how socially-centric they are and how socially active they are, the fact that with their good experiences, they're going back out and they're sharing that. The numbers are pretty tremendous in terms of how much scale you get by just the network effect of the racehorse owners that we've created.

CC: What can stakeholders do to help in your efforts?

MB: I think that there have been those that have been more helpful than others. And I get it. It's new. It's not defined. There's not a lot of precedent for it. But the reality is that if you take a step back as any stakeholder in industry and realize that there's just a lot of passionate, excited people that are now involved in racing, what we need to do is enrich and cultivate that collectively. We need to harness it. I think the fact that whatever we can do to allow these people to experience everything that racing has to offer. Right now, I think we're approaching a situation where with the pandemic restrictions hopefully lifting in the next three to four months, we're going to really turn to the tracks and we're going to look for their support as we want to be able to bring out this community and be able to enjoy the races live and with friends and with family, and have them bring new people out to the races.

CC: Do you see your category having an impact on wagering?

MB: Absolutely. You can see it in each race that we have, how much money are into the pools, how disproportionately our horses are relative to the morning-line odds. I think over time, we'll do a lot more work on being able to measure this. But the reality is that when you get connected to the sport, there is a direct correlation to your participation in pari-mutuel. We'll see it more and more and it won't even be so directly correlated to the horses that we have racing, but just the size of the community that is now better educated, and that education is going to manifest itself in much more significant handle because they have become more confident with the product.

CC: Can you address how significantly the support of B. Wayne Hughes has impacted your success?

MB: I'm not sure I can totally put it into words. It's been something that I couldn't even have imagined that I'd have a partner with this type of support, this type of commitment, this type of passion for seeing something be done differently and be able to catalyze real change. There's just innovation. There's creativity. As a business partner, there's a lot of accountability, but the reality is that his commitment and passion and love of the sport has been a benefit to us. We wouldn't have the success that we've had in such a short period of time without his support.

CC: You just announced Monomoy Girl on your platform. Why are purchase of shares limited and what is your goal with this offering?

MB: We want people to be able to experience every part of this game. One part of this game is competing at the highest level. I think there's not much of a higher level than Monomoy Girl. She is the definition of a champion. We want as many people to participate and go on this journey as possible. The financials, as people will see, are very, very attractive. They're very shareholder-friendly. This is not about having a few people come in and take up a lion's share of it. We want as many people as possible to experience this. So, there'll be very aggressive limits on how much one person can participate.

CC: What is more important, financial success or a positive experience for your investor?

MB: It's both. I don't think you're in a positive experience if you're basically not having financial success, but no one does this because they're selling their 401(k) and deciding this is going to be the wave of their future investment. So, at the end of the day, we live in a world in which we have to be fiscally responsible. We have to make sure we get people into horses that provide them a great experience. We have to then take that experience and we have to deliver great content and digital and physical experiences that matched the joys and the thrills of what it is to own a racehorse, but we also want to be good stewards of other investments.

CC: Can you share some of the other plans you have for MyRacehorse in 2021?

MB: Our focus now is really going to be to continue to scale. One of the challenges the business has faced in the last couple of months is to keep up with the amount of demand that we've had by new people coming in. People who've had a good experience are telling friends. We're super happy they're signed up. They're downloading the app. They're registering for investments. We've actually only had horses on the website for a handful of days in the last couple of months, just because the overwhelming demand. So, what we focus on aggressively is building out infrastructure and we are committed to making sure that we have more inventory to meet the demand. We are also going to go explore expansion in international markets. The two international markets that we are focused on right now are Australia, which will be launching in the next month or so, and then we'll be going into the UK and Ireland shortly thereafter.

CC: What does success look like?

MB: According to a survey that I saw a few years back, there's over nine million people that have a curiosity of horse racing. There's no doubt that we've been losing market share overall to other sport. Success will be when we basically start seeing tremendous growth overall in the industry. Obviously, we want to build a good business and we want to be able to build a big base of customers. But overall, I think the ultimate success is going to be that we bring a real growth trajectory back to racing.

CC: What are the unique traits in horse racing that need to be exploited by stakeholders to deliver a greater interest from owners and race fans?

MB: I think racing has a very unique combination of the ability to have competition at the highest level centered around this majestic animal and the equine athlete and the Thoroughbred and the gaming components. The intersection of those makes it very, very compelling when you think about what you're competing against in terms of mind share for consumer attention. We have to continue to be able to embrace the fact that it's the intersection that's so important. It's not one or the other. It's not just about the experiential component, which is great. It's not just about the gaming component and it's not just about the athlete and the sport. It really is about bringing it all together. Overall, we need to do a better job of making it available. We've got to make it easy to participate in all those things. We have to make it more digestible. It seems to focus on the audiences that are already known. When you expand and you bring them into a world that maybe isn't the easiest to understand, you've got to change. I think that's really what we have to do is get to understand what makes us unique and different. We have to accept the fact that maybe it's not simple and that's okay, but we just got to be able to change the way that we engage and change the way we message and share it, change the way we market to be able to get that message out there. Because once the message is appreciated, once the sport is really understood, it's beautiful and it's going to capture a lot of people.

CC: What's the best professional advice you've received as a marketer?

MB: I think the best thing is to ask why, an intellectual curiosity, the ability to question everything. It's really what I wake up every single day and I challenge: why did we do what we did yesterday? Was that the best possible result we could achieve? How could we have done it better? Why did this cause frustration? Why can't we do it differently? Why can't we emulate another role model from a brand or a category that we like? I'm sure my staff will attest to the fact that it can get tiring if you're questioning everything, but that's the best way to be a marketer, to have this pursuit of always doing better. You question why can't we do it better.

CC: Is there a business mistake that you try to avoid at all costs?

MB: I think one of the biggest mistakes is being afraid to fail. Early in my career, I was and I think a lot of people are. But the reality is that experimentation, testing, and learning is part of the natural evolution of any business of any category and you've got to embrace it. You've always got to celebrate failure. I think when you really do create a culture, be it in your professional career, be it in your business, be it in the industry, that you embrace trial, you embrace experimentation, you embrace failure, you learn from it, you enjoy it. It's something that Mr. Hughes is as adamant [about] as I am. It's very liberating to have a culture, to have a business philosophy that embraces failure, celebrates failure. If you're not failing, then you're really not trying.

Carter Carnegie is president of Metrical Consulting and has over 30 years of experience as a sports business professional both in racing and working with sports leagues/events such as the NBA, NFL, and Olympics. Metrical offers marketing solutions and business strategics to brands as well as sports properties.

The post The Sports Business Furlong: Michael Behrens, Founder and CEO of MyRacehorse appeared first on TDN | Thoroughbred Daily News | Horse Racing News, Results and Video | Thoroughbred Breeding and Auctions.

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The Sports Business Furlong: Paul Bittar, General Manager of Sports Partnerships at Sportsbet

Growing up in New South Wales, Paul Bittar had an education and background in accounting and economics before spending 15 years focused on the governance and regulatory side of racing. After time as Chief Executive of New Zealand Thoroughbred Racing and on the executive team at Racing Victoria, he eventually landed in England as the Chief Executive of British Horseracing Authority. Bittar is now back in Australia as the general manager of sports partnerships at Sportsbet.

CC: What is one of your favorite racing memories?

PB: I am certainly fond of my first memory of being on course at Randwick with my grandfather and father, both of whom were really keen punters, and racing fans. Randwick in those days, when I was really little, just seemed so immense, so grand, and the race day was hugely interesting. Clearly, I got my love of racing from those first experiences.

CC: You have an interesting background, having worked both as a regulator and also a sports betting marketer.

PB: The past few years, I’ve been lucky enough to work on the wagering and commercial side of horse racing which has given me a different perspective. Although, I’d like to think that as a regulator that I took a fairly pragmatic and commercial view of the world and always seen racing, or certainly the economics of racing, through the eyes of the punter and consumer, which maybe not all regulators do.

I feel with both my domestic and the international experience, working as a regulator and marketer, that I’ve got a pretty well-rounded view of racing globally, and the economics of the sport in particular.

CC: Having worked and seen racing from so many different jurisdictions, what are any major differences that you can identify between the racing industry in Australia versus other countries?

PB: Australia kind of sits somewhere between those highly regulated, vertically integrated, monopoly betting markets, like a Hong Kong and Singapore, versus a completely deregulated market that has very little or virtually no tote market like Britain. Australia fits somewhere neatly in the middle, which, in lots of ways, makes it one of the most vibrant betting markets in the world because you have this real mix between the tote and fixed-odds markets.

CC: Going back to your regulator days, what are some of the important areas of control oversight for a governing body to be successful in regulating racing successfully?

PB: The role of the regulator is to not be seeking to catch people out, but it is to actually educate and inform them along the way, and be engaged with those that you license or regulate to actually ensure that people avoid breaches of the rules.

As a regulator you need to be fiercely independent, so having representatives of those that you actually regulate on regulatory boards has never made sense to me, but I think engagement with those stakeholders, and those that you regulate or license is really important. But I would definitely make the distinction between having direct representation onto boards.

CC: The U.S. market does not have a central body. Can you identify some of the key factors for having a central body govern racing?

PB: I think there would unquestionably be an efficiency dividend in not having all of the individual structures at a state level. So, if you could ever get to the point where you had a genuine central body running the sport, then there would undoubtedly be cost savings, and efficiency dividend there.

Consistency of rules, consistency of regulation, consistency of disciplinary procedures, consistency of penalty structures, a consistency of the treatment of prohibited substances, or the use of medication, all of those sorts of consistencies have to be a benefit to the participant. Consistency of betting rules, really important for the punter. So, I think just greater consistency would make sense from a rules and regulatory perspective.

CC: What are some of the biggest challenges you face when you head a racing regulatory organization?

PB: The key challenges that you have to overcome, or you have to accept, is that you’re just not going to please most of the people most of the time because the nature of your role means that you will, from time-to-time, end up in conflict or disagreement with those that you’re regulating. Challenges play out most pointedly because individual stakeholders see the world through a certain prism. And all of those are on the producer side of the sport.

As a regulator, one of the things you’re predominantly dealing with [is] the producer side of the sport, yet you’re actually trying to deliver a sport that needs to be attractive for consumers, and that really plays out mostly with the fixture list, and how you schedule fixtures, how many fixtures you run on the types of races that you run. So, it’s very easy to end up in conflict with taking a consumer view of the world, and how you try and grow wagering revenue, which really funds the sport, versus those that deliver the sport on the producer side, and how they see the world.

CC: Is it hard to please all the stakeholders and remain impartial?

PB: I don’t think it’s that hard to remain impartial. I think it’s near impossible to please all of the stakeholders.

CC: How important is it to separate the competitive integrity of horse racing from the gambling activities associated with the game?

PB: I think that racing is a bespoke betting sport. Its fixture list is designed largely around maximizing revenue from the sport. It’s not like other sports that are not funded by gambling. So, if you’re the AFL in Australia, then wagering is an important revenue stream to you, but it’s tiny in comparison to what you receive from broadcast rights and ticket sales through the year. Whereas racing should not hide from that because I think it’s actually one of the things that makes it unique and special.

However, I think if you look at the racetracks, they have a really consumer focused view of the world. I think there’s a real balance there between genuinely consulting, and taking their views, and actually having them specifically involved in decision making related to policy and rules. I think the racetracks and the horsemen are hugely important inputs into policy making, and integrity, and regulation, but I don’t think they should have the power over integrity and regulatory policies.

CC: You talked about earlier about having both a pari-mutuel as well a fixed-odd environment. How do those two coexist, and does one cannibalize the other?

PB: Betmakers in Australia run reasonably healthy margins, and not dissimilar to the margins that run on the tote for win and place. There has been this very significant growth in fixed-odds wagering on racing, and there has been a slow decline in the tote. But the overall market for racing has grown exponentially, and the revenues into racing have grown exponentially. It is really interesting in that sense that pari-mutuel, while it’s on a slow decline, continues to be pretty healthy, and the fixed-odds market, while it’s taken a big chunk of market share, has unquestionably driven huge market expansion because of product expansion. So, does one cannibalize the other, yes. To a very small extent in Australia that has happened, but overall the market has just grown exponentially, and racing and the punters are so much better off as a results.

CC: How important is data for punters, or access to data for betting purposes?

PB: Great question, and incredibly important. In Australia you’re really lucky because getting access to racing vision is really easy. Then the next benefit is how that vision is complemented with data, and whether that’s data that’s part of the broadcast, or whether that data is delivered via your Sportsbet app, and all of the wagering operators, or data that’s delivered elsewhere. Racing’s a really data-rich sport, but it can be quite complex data. So, the way you turn that into data points that are easily digestible for the customer is hugely important.

CC: How important is syndication to the health of racing in Australia?

PB: Very. Australia has a huge number of owners as a proportion of the general population, so much more significant than other countries. Australians are prepared to invest in horse ownership, but they often do via a syndicate, or increasingly through micro-ownership. One of the great things that we know about horse ownership, is that even if you own .1%, you still refer to it as your horse. Australian racing bodies have done a really good job of encouraging that type of ownership, reducing the costs for people, and putting in place rules and regulations that encourages syndicates.

CC: How are young people getting connected to the game in Australia as you seem to have a very young demographic compared to other countries?

PB: Racing has done a good job in creating new events and wagering operators, particularly digital operators who naturally tend to attract younger customers, have done a very good job of converting them into racing fans. Australian racing now recognizes that the best marketers of racing in Australia are actually the wagering companies because they’re the ones that actually have the direct interface with the customer.

CC: Any suggestions on steps racing in the U.S. can take to improve its image, and attract a new audience?

PB: I think racing in the U.S. has very much a participant-driven view of the sport. The horsemen hold an incredible amount of power. You have a tote-only model, which is not hugely consumer focused, and you have a sport that’s regulated on a state-by-state basis. While U.S. racing has some incredible racing events, I think the learnings from Australia are that the more that you can take a consumer view of the economics of racing, and build out the economic model, and grow the economic model, then those benefits will flow to the participants. Whereas, it’s strikes me that U.S. racing very much has a participant-driven model reluctant around fixed odds, reluctant around product expansion, terrible adherence to race times, and off times.

CC: What are some unique traits that horse racing has that should be exploited by stakeholders to generate greater interest from fans and punters?

PB: One of the unique things about racing, and taking American given the scale of the industry there, is that if you actually get greater coordination between the key racing bodies, adherence to race times, and product expansion through fixed odds or other, then there’s actually this massive opportunity to put in front of sports customers a race every few minutes in a really scheduled and organized way with centralized broadcast, and centralized off times. That, in itself, would deliver a huge economic benefit for U.S. racing.

CC: What’s the best professional advice you received, and who shared it?

PB: It came from Greg Nichols when I was working at British Horseracing when he was Chief Executive at the time. He recommended to me that I go and work in New Zealand, and one of his main reasons for suggesting that was because New Zealand had no money as an industry. He said to me, “It’ll force you to be really creative, and it’ll force you to be really disciplined about your decision making, and it’ll really benefit you in the long-term by working somewhere that isn’t flush with cash.” I realized on reflection that was a really, really good piece of advice.

CC: Lastly, if you were in charge for a day of running a central body of racing in the U.S., what would be the first action item you would do to improve the business financial side of the sport?

PB: I would do two things simultaneously. I would embrace fixed odds, and I would ensure an adherence, and a coordination of race times.

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The Sports Business Furlong: Frank Nakano, Managing Director of Sports and Entertainment at JPMorgan Chase

Usually held the first weekend in May, the Kentucky Derby has been viewed as the unofficial start of the summer season and the U.S. Open on Labor Day weekend has been a fitting bookend to this season. This year, due to COVID, sports fans will have the opportunity to enjoy these events which transcend their respective sport at the same time. Both mainstream cultural phenomena will be held with zero spectators this year, however the U.S. Open made the decision early on to go spectator free and their partners have planned accordingly.

Fifteen years ago, I first met today’s interviewee, Frank Nakano, while pitching the Breeders’ Cup as the perfect sponsorship for his client, American Express. Needless to say, that partnership never came to fruition, but a good friendship ensued. Over the years, Frank has been a valuable resource willing to share his professional perspective on understanding the motivations of a brand for wanting to engage with sports and lifestyle investment as a business platform since he has worked both for various brands and agencies as well as different sports properties (NHL and NBA).

Frank Nakano is currently the Managing Director of the Sports and Entertainment team at JP Morgan Chase who is responsible for working to cross firms aligning with the Chase brand with sports, entertainment and culturally-relevant properties that reflect the passion of customers. His team maintains a particular focus on the business outcomes of sponsorship and integrating various lines of business as appropriate for each relationship.

The JPMC portfolio is primarily focused on multi-purpose venues that attract fans 200+ times a year. Anchored by the longstanding partnership with the U.S. Open (USTA), the Madison Square Garden Company (Radio City Music Hall, Chicago Theater, Beacon Theatre and the Forum in Los Angeles), JP Morgan Corporate Challenge, Chase Field, Amelie Arena / Tampa Bay Lightning and the newly opened Chase Center that made its long-awaited debut in September of 2019), JPMorgan Chase was named Sponsor of the Year in 2017 by the Sports Business Journal.

Prior to joining JPMC, Frank was Vice President of Marketing Partnerships at the National Basketball Association managing development and relationships with national brands including Nike, HP, Cisco, Taco Bell, Southwest Airlines and others in addition to overseeing the League’s partnership strategy and sales of the U.S. National Team program leading up to the 2008 Beijing Olympics. Prior to his role at the NBA, he served as the Vice President at Momentum Worldwide working as agency partner for American Express and Verizon Wireless after having worked nine years with the National Hockey League in the International Business Development Group.

CC: Do you have a favorite horse racing memory?

FN: Six years ago, we were somewhere outside of Dallas and a bunch of the guys I grew up with just happened to be in town. We went to the track because one of my friends enjoyed racing. The rest of us had no idea what we were doing. I asked what the most significant payout would be and they said, “You’ve got to pick the trifecta.” I picked based on favorite numbers and the names of the horses. I put 20 bucks down, and then didn’t pay attention as the race came up. As the horses finished, unbelievably, it came up in that sequence. So I won the trifecta for about four seconds, and then there was an announcement that there was an inquiry on the track. I asked my friend what that meant and he said,”that means you’re not going to win.”

CC: Why do you think sponsorship of venues, events and sports are an important element to a company’s marketing portfolio?

FN: For JPMorgan, sponsorship is really about being able to engage with customers in moments of passion. It’s a main reason as to why we focus on venues as they are the location where the memories happen. A lot of our competitors have developed terrific access programs at the point of sale, like the first to buy ticketing. Although we’ve done some of that, our premise is that we want to be present at that moment when you can experience and are engaged with your passion point.

Through this multipurpose venue strategy, we also learn a lot about our customers because every time they swipe their card, we know what kinds of events they were attending and what engages them with our brand, and we can hopefully eventually push the right kind of offer moving forward that is tied to their interests.

CC: Are there other benefits to being a sponsor that you don’t have with other forms of branding or traditional media efforts?

FN: Yes, definitely. I think sponsorship allows you to get deeper. Although it’s not as wide as advertising, you can go deeper into the personalization where your customer can immerse themselves between your brand and what engages them. This is very valuable as a brand, especially for us as a financial services institution, because it creates an emotional connection between us and our customers. It really gives us an opportunity to change a customer’s interaction with Chase and make their relationship not so transactional, because frankly, financial service is a fairly utilitarian product, but through these moments, we can give it some context, which is our ultimate goal.

CC: How many proposals do you receive in a year and what would be some of the key attributes you look for when you’re choosing a sports property or venue to sponsor?

FN: Our department receives and evaluates over 300 proposals a year. It’s certainly a cross between an art and a science, but since we’ve landed on this venue strategy because of the year-round opportunities, we then factor in key markets. Like any business, we want to present our brand either where it is not as present or prevalent, or where it is a growing business and looks to continue to sustain that momentum. We also look to enhance our sponsorships with elements that drive our community efforts. So every partnership that we engage has to have a component that gives back, because our bank is there and we want to be good citizens to that community.

CC: What’s the most outlandish proposal you have been pitched?

FN: Since we are not just in sports but also other entertainment spaces like culinary and musical categories, one of my favorites was from a music tour by an artist whose tour I will not name. It was essentially a song about–sorry for this word, but along the lines of “B**ch Better Have My Money” and the organizers of this tour thought it was appropriate to prepare a proposal because “Presented by Chase” would be a terrific tie due to the lyrics. It took a little while to try to understand the logic on that, but I got a good kick out of that one.

CC: What is a key mistake often repeated by rights holders?

FN: I think it is overestimating media value within the partnership. In most deals, the media elements are a component of the integrated package, but as a sponsor our core focus is really about the engagement with customers. We are certainly seeing that play out now in this abnormal period where there are no fans and no opportunity to engage. If our focus was to be on media, there are many more efficient ways to purchase those opportunities without having to partner with the rights holder.

CC: A current change in sports is the growing trend of legalized betting. As a financial institution, how does this new category marry up with your brand, and do you want to associate with venues or teams that would have sports betting partners?

FN: I think I’d separate how we think about it. We wouldn’t necessarily not do a deal with a venue partner because they have a sports betting component. We realize that that is certainly a trend moving forward. We ourselves aren’t getting involved in that medium and are not crazy about it. I feel there’s a certain drag on a property if they get too heavily invested in it, but we realistically understand where the industry is going and we would make sure that we are not in the middle of that association.

CC: With the U.S. Open taking place on Labor Day, what is your opinion of the event without fans?

FN: If you had asked me this four months ago, I would have said it would have been one of the worst things possible to think about, because it is such a grand event in what it represents in terms of fan engagement. In many ways, it is a core part of the magic of that event. In many ways, the U.S. Open is not even about tennis. It’s an end-of-the-summer-season event, it’s summertime in New York, it’s a global event. But now looking forward, I think it will be interesting and I think it will be a terrific symbol for New York and the sports world to be played without fans.

I think it will be interesting from a marketer’s perspective to see how we translate what’s so great about that event. Now we’re challenged with how do we bring it to an at-home experience? How do we engage people in the social aspect of it while they’re home with the celebrity factor? The goal is now focused on how do you get that energy to come through the screen? We’re excited to bring our experience to a fan-less U.S. Open and translate it to the at-home experience.

(Click here for JPMorgan Chase’s Activations for a spectator-free U.S. Open)

CC: Based on your knowledge of the game, if you were a stakeholder in racing, what would you exploit to try to generate more interest from sponsors and advertisers?

FN: The beauty of the in-person experience. Until you see it up close, you can’t comprehend what great athletes the horses and the jockeys are and that there’s more to it than what appears to the layman. Then it’s the overall experience. I think that’s why people love the pageantry of the Kentucky Derby with its decades of tradition and festivities beyond the actual race itself. I would say that’s a great way to market it— as an experience. Similarly, Saratoga has built that tradition and there’s a destination element as well as a focus on racing. Focus on tradition and the pageantry of the sport.

CC: What’s the best sponsorship advice you have received and who gave it to you?

FN: I think it comes from my former boss, the guy that started the division I’m working in now. He had a very analytic approach to sponsorship. He said we’re never going to take away the emotion of it. That’s what it’s based on, but it has to be moved closer to a science than an art. I think the industry has traditionally been too loose in terms of not measuring itself and setting out goals. He emphasized a focus on the science behind it, especially in sponsorship where we did not want to be known as a company that went to games and fancy dinners. It should not be about us, but we should look at it from the customer perspective. How does sponsorship drive revenue? How does it bring people together? How does this strengthen the brand, and then most importantly, how do we prove that out?

CC: Is there a business mistake that you try to avoid at all costs?

FN: There’s a lot to them. I think you never want to take the emotion out of how you’re selecting, but I think you really want to make sure you’re doing your homework, looking at everything from not only the brand that you’re associating with, but the people that are going to be involved with it. Making sure that there’s enough flexibility within agreements, because the beauty of sponsorship is that it needs to evolve as you go along. You need to have enough structure in the agreement to protect your rights and get a set vision of what assets you are going to get. But you also need to be able to call an audible and adjust accordingly because things change so quickly and it’s not a commentary necessarily on the platform, but you just need to be able to pivot quickly. That entails some flexibility from the partner you’re choosing as well. As much as you can, have that understood up front.

The post The Sports Business Furlong: Frank Nakano, Managing Director of Sports and Entertainment at JPMorgan Chase appeared first on TDN | Thoroughbred Daily News | Horse Racing News, Results and Video | Thoroughbred Breeding and Auctions.

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The Sports Business Furlong with Alex Riethmiller, VP of Communications NFL Media

This month’s column focuses on messaging and the importance of a clear communication strategy as a crucial element to successfully promote and grow a sport. In the U.S., the NFL sits atop the sports apex and, similar to racing, the league has had to address a variety of controversial issues that challenged the integrity and popularity of the sport.

After graduating from the University of Virginia, my roommate, Alex Riethmiller, and I decided to embark on careers in Sports Business. While my first job was producing events for the NBA, Alex began a career in PR working for the newest franchise in the NFL, The Jacksonville Jaguars. From there, Alex went on to work with the Atlanta Hawks and then ran communications for the sports, news and entertainment brands of CBS Interactive.

Currently, Alex is a VP in the NFL’s Communications department. Based out of the League’s offices and studios in Los Angeles, he oversees all communications for NFL Media, including NFL Network, NFL Digital and NFL Films. Additionally, Alex also handles the communications for the League’s Broadcasting and Media Strategy group as well as its Sponsorship and Consumer Products divisions.

CC: What is your favorite racing memory?

AR: I would have to say attending my first live racing experience, the 1999 Breeders’ Cup with you and your family. In the last race, the Classic, I picked the winner, Cat Thief, who was ridden by Pat Day and took a nice little price. I took my winnings and bought a Breeders’ Cup poster that I still have hanging on my wall in my house.

CC: Briefly explain why the NFL owns a network and the advantages of having one when the sport is already so well covered through other channels?

AR: I think for some other sports, it might make more sense as a marketing tool. And it certainly is a marketing tool for the NFL as well, but going all the way back to 2002 when the NFL decided to start their own network, they were really trying to extend their footprint into the off season and make the NFL 365 days a year. Basically, bridge the gap between everything that happens between the Super Bowl and the next time the regular season kicks off. The Scouting Combine is a perfect example of the type of off-season event the NFL has built using NFL Network.

CC: A change in the sports landscape is the advent of legalized betting. How does NFL Network plan on addressing the growth of legalized betting on its platform?

AR: For a very, very longtime the league had a pretty strong stance against gambling to protect the integrity of the game. And to be sure, that stance on protecting the integrity of the game hasn’t changed. At the same time, obviously the reality is that the landscape is changing in the United States towards sports betting and of course, we need to adapt to that. Clearly a lot of our media partners are asking us how comfortable we are with them talking about things like point spreads. I’d say it’s an ongoing evolution.

CC: Speaking of changes, what do you see as major trends outside of legalized betting that would affect the television landscape?

AR: Obviously we’re in the midst of the COVID pandemic, and that’s changed so many things. To me, the best example of something that could have a long-lasting change is how we had to adapt for the NFL Draft, which for the first time ever had to be done completely remotely. The Commissioner was in his basement and all the coaches and Gms around the league were at home. There was definitely some trepidation about whether we were going to be able to pull it off, not only from a technological standpoint, but if fans would enjoy it. We found that it worked extremely well. We had very few issues on the technological side and the feedback was that fans enjoyed seeing people in their homes in this type of presentation. From a production standpoint I think that’s going to change a lot of how things are done across the entertainment industry in general.

CC: How has COVID changed your business and operations at NFL Network?

AR: I think that we’re going to find various efficiencies in the way that we do business because of this experience, and there will probably be permanent changes in the way that media is produced. Now that we’ve gone through this whole experience, there’s going to be some major changes for the better, and certainly that are going to be cost-effective changes going forward.

CC: I’m sure everyone is asking, but obviously you have a season coming upon you pretty quickly. How do you control that message with the uncertainty around how the season will be conducted?

AR: I think the NFL has been fortunate on the timing of this because we’ve been able to see how others ports that needed to go before us have reacted. We’re a couple weeks away from training camps opening. All along Commissioner Goodell has been very solid about, “Hey, we’re going to start the season.” We’re going to obviously listen to all the medical experts and we’re going to adjust as we need to, but we still feel very confident about having the season. There may just be a few wrinkles along the way.

The big question is really how many fans are going to be able to attend some of these games. I think some of that is going to be determined by different state regulations. I know some news is already starting to come out in places like Kansas City, where they’ve already said that they’re not going to have full stadiums. I think probably some places will be empty, and some places you’ll have partial fans. It remains to be seen.

Alex with son, Christian | NFL Photo

CC: The NFL, like many other sports, has challenging issues to address, whether it be about health issues with concussions, violence with domestic abuse and cultural revolutions like the BLM movement. Do you have a philosophy or best practice on how to address challenging issues?

AR: When big issues come up, the NFL and Commissioner Goodell often look at it as an opportunity to take a leadership position in society and make some very positive change. Sometimes we’re directly involved in it, for instance the Ray Rice domestic violence issue that obviously brought the problem of domestic abuse to the forefront. I think we’ve tried to be very thoughtful about how we respond to it.

The best thing you can do is try to stick to your values. Although the NFL has caught a lot of criticism for things, I do honestly believe that they have a good set of values and priorities. And when we get to these issues that bubble up, I sincerely think that we try to do the right thing and try to convey that through our communications practices. If there’s issues that need to be addressed and fixed, we try to do that as quickly and fairly as possible.

CC: How do you manage covering negative stories about the sport or league when you own the network?

AR: That is a question that we get all the time, and there is definitely a balance between strictly being a PR mouthpiece for the League and then being a Hard News organization. I can tell you that a lot of folks that work for NFL Network and our digital properties in Los Angeles are long-time journalists that have broken a lot of big stories at other outlets and they certainly aren’t here just to be regurgitating press releases from the NFL. At the same time, I think everybody understands that we are owned and operated by the NFL. The general line that we try to stay on is we will report the news- both the good, the bad and the ugly. I think if you look at some other outlets dealing with negative news, they will go on for hours speculating about it. NFL Network is going to report the news as long as it’s relevant and as long as there are confirmed facts, but we’re going to stay very factual. We’re not going to speculate and obsess for hours.

CC: Horse racing has had its fair share of negative coverage in the last few years. If you were running the PR strategy for the sport, what would your suggestions be on how to address these matters?

AR: I don’t have a vast depth of knowledge of the sport, but being in Los Angeles and close to Santa Anita I have heard a lot about the health and safety issues the sport has faced. I don’t know if you can draw any parallels to the issues that the NFL has had on the player health and safety front with concussions, but I know for Commissioner Goodell and everybody on down, our number one priority, no matter what we’re talking about, is the health and safety of our players. I can’t speak to if that has been mare the number one priority in horse racing in terms of not only the horse, but the jockeys as well.

From my standpoint, you really need to make sure that these tracks have the latest state-of-the-art safety measures. There need to be regulations in terms of medications these horses are being given. I think making the health and safety of the horses and their riders a priority has got to be something that is at the forefront of every decision that’s made in the industry.

CC: What are the unique traits about the sport of horse racing that need to be exploited by stakeholders to promote and introduce their sport to a larger audience?

AR: I don’t think it’s any secret that the sport of horse racing is tightly intertwined with sports gambling, and it does have the benefit of being something that is available pretty much every day at any time. So as sports gambling continues to become more prominent across the United States, there is an opportunity for the horse racing industry to piggyback off of the increased popularity in sports betting and see if the rising tide of that can help lift their boat as well, so to speak.

CC: Is there a business mistake that you try to avoid at all costs?

AR: A lot of what I do is constant communication with the media- whether that’s texting with reporters, phone calls or trading emails with them. Those relationships can be harmed pretty seriously if you’re not up front with them, or if you don’t deal with them in a way that is fair. I’ve probably made that mistake over the years and I’ve definitely learned from it.

You’re not going to always be able to tell the media everything that they want to know, but if you’re honest and you let them know the reasons why you can’t speak to a certain thing or that you need to avoid the subject, I think you’ll always have their trust. Having that trust, transparency and honesty with the media is something that’s not only important to me, but it’s something that can be translated into other industries and relationships that people have in business.

CC: What’s the best advice you have received on how to be good at PR-related issues?

AR: It was from a former boss who used to say, “If you have to eat-” well, let’s just call it horse manure. “If you have to eat horse manure, don’t nibble.” And what he meant by that is if you have some bad news, don’t try to downplay it or put a little of it out there at a time. Instead, just go ahead and rip the band-aid off, get it all out there at once. The quicker you get out there and the quicker you own up to it, if that’s what the case is, the sooner that you can start to move forward and not suffer a death by a thousand cuts.

CC: If you were the commissioner of horse racing, what would you look to change to improve the image or perception of the sport to reach a new audience?

AR: Well look, I don’t pretend to know all the distribution and media deals that racing has. I do see racing on NBC Sports and FS1. Of course there are networks like TVG that focus on the product seven days a week, but they’re also owned by a third party. It is unfortunate that the sport does not have its own platform to generate content focused on fan development and a channel to entertain avid fans not exclusively through the lens of wagering, but the story-telling side of the game.

I know in this environment were there are a million different ways to consume content, it can be a challenge to cut through the clutter. But I think for horse racing, if it’s going to continue to grow and be more popular, it’s not only the sports gambling angle on it, but they really need to increase their distribution on all forms of media platforms and have better control of its message and the content that is being disseminated.

If you look at the horse racing fan base, it’s considered a sport that attracts an older generation. A big challenge for horse racing stakeholders is how are they going to develop that new generation of fans? Which is going to be important and frankly, something that we face at the NFL. When you look at kids now, they have so many options. So how can we get in front of that younger generation and get them interested in what our sport is or what our entertainment is? When we think about that as the NFL, we think a lot about our presence on social media.

So, what is horse racing doing about social media? Because let’s be honest, that’s the way a lot of kids consume content these days. I think some of the older generation is a little dismissive of those social media platforms, but they are important for getting in front of a younger generation, which again is the first step towards building fans for the future. Media distribution, control of content platforms like a network and a vibrant presence on social media are all important things that horse racing needs to lean into, with the overarching value of never compromising on the health and safety of equine and human athletes at the forefront of it all.

Carter Carnegie is President of Metrical Consulting and has over 30 years of experience as a sports business professional both in racing and working with sports leagues/events such as the NBA, NFL and Olympics. Metrical offers marketing solutions and business strategics to brands as well as sports properties.

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