Why Horse Racing Needs to Care About Building a Successful Sponsorship Business and What it Can Learn From Other Professional Sports
Rachel Jacobson
Rachel Jacobson, Former SVP Global Partnerships, NBA

Stuart S. Janney III:

Corporations spend billions of dollars each year on sports sponsorships. It's a proven method of connecting with their consumers and improving their bottom line. Today we're going to hear from someone who played a key role in the development of those programs and generated nearly a billion dollars of corporate sponsorships with Fortune 500 brands during her time at the NBA.

As you will hear, Rachel Jacobson knows her way around a racetrack. We're grateful to have Rachel with us today. So thank you, Rachel.

Rachel Jacobson:

Good morning. I'm thrilled to be here today, and many thanks for the gracious invitation by Stuart and Jim and The Jockey Club board for asking me to speak at your Round Table Conference this year.

As you'll soon find out, I'm not just a fan of horse racing, I've also tried to be an ambassador and strategic advisor where I can help grow the sport, given how passionate I am about the tremendous opportunity I believe horse racing has for future global growth.

So what makes me so confident about growing the sport? Let me share with you a bit about my professional background and what I will review in today's presentation.

I recently left my job at the NBA, but was so fortunate to have spent the past 20 years working for Commissioners David Stern and Adam Silver. I was hired at the NBA right out of college after I graduated from Cornell's hotel and business management school. Over my tenure, I spent time in the NBA's global merchandising group, working with our licensees and retail partners, building national promotions, and then moved to our global partnerships group in 2000 to manage our USA Basketball sponsorships for the Sydney Olympics.

From there I managed day-to-day partnerships with some of our top sponsors, and then eventually, after running our big events, coming up with the ideas to sell partners, I moved over to the NBA's business development group and was responsible, as Stuart mentioned, for generating close to a billion dollars in corporate sponsorships.

Knowing how integral the right companies are to building not only a fan base but an engaged fan base, along with tapping into their love for a sport, are some of the themes I will speak about today. So let me digress for a quick moment and share some personal background on where my professional and personal life have intersected, resulting in my love for horse racing.

I wasn't born into a historic horse racing family; rather, it happened by chance and has defined to this day so much of my personal and professional life. You see, it was a client that offered to pay my grandfather, who was a lawyer, half his legal bill by giving him half a horse. Sure, just what a small-town practice needed to pay the bills, right?

That horse turned out to be Craftiness, who won the Diana right here in Saratoga in 1961. My father, many of you know him as Ed Rosen, was 16 at the time and never the same. He became entrenched in learning how to read a racing form, pedigrees, and of course what 16-year-old knows better than the trainer what the next spot to run the horse would be.

My grandfather and father continued to breed and race horses that ran locally at Monmouth Park and the NYRA tracks.

Enter me. My earliest memories were family trips to our local track, beautiful Monmouth Park, to cheering on Lord Avie with my first trip to Saratoga, to telling Bobby Kuhlina he was going to hire me for a summer internship at Monmouth Park. It was there that I saw firsthand the operations and management of a racetrack. I loved every minute of four summers during my college years working in the publicity office. That's where I met Jim, by the way, as he was also working at Monmouth at the time.

Since my father has remained very involved in the sport as a pedigree advisor, it's been family trips to big races, watching at home, cheering on our favorite owners, many of which are in this room, trainers and jockeys, and of course our special summers in Saratoga. Thanks to Chris Kay for that new Fox Sports deal and NYRA app. Now we don't miss a beat with the Spa racing this summer. My kids thank you, too. A perfect complement to their afternoon activities, coming home from camp and getting their daily fix of the afternoon races.

So here's what I wanted to talk about today and why I'm so bullish on the future of horse racing. The sponsorship landscape. What spending looks like across the industry. Why sponsorship works. How companies have used successful partnerships to build and accelerate business goals. How important it is to prioritize sponsorships with the right companies that will help horse racing grow, given how successful this has been for other sports properties. How to find the right companies.

I will share examples of how these partnerships have worked and who are the companies spending the most against sports partnerships. I've also put together some recommended categories of focus for horse racing to pursue.

Beyond these points, the fact that my seven-year-old twins grew up in a household with a mom that worked at the NBA, yet the earliest athletes they rooted for were Johnny Velazquez, Javier Castellano, and Tonalist. Even before they started wearing Steph Curry and LeBron jerseys, these were their favorites. So there is living proof that I don't need a data point to support that we can build a new generation of fans with the sport we've all grown up with.

While I'm an eternal optimist and I've been around this sport long enough to hear the naysayers, I'm hopeful that horse racing will embrace change, seeing the success of other sports properties. The business of sports is evolving, and there are amazing technology advancements to bring fans closer to the game. Horse racing has all the right assets to appeal to a much broader fan base and take advantage of these opportunities.

So here's a look at the sponsorship landscape prepared by ESP/IEG research. The good news is the dollars are growing year over year, which presents a significant opportunity to get a larger piece of the spending if you prioritize having a sales team out cultivating relationships and staying top of mind when dollars become available from companies to invest in sports and entertainment. But it has to be a priority, and you have to spend time and resources in this area with partnerships taking months and even years to come to fruition.

We did tremendous amounts of research around the demographics of NBA fans, their interest and attitudes, top spenders in sports, economic trends and countless other types of research. To be able to go out and generate partnerships, you need to be very targeted in your approach.

I want to show a video that highlights the NBA's key attributes. It's a global sport, appeals to a diverse audience, it's inclusive and progressive. This was part of last year's marketing campaign, and you get a sense of the key selling points of the league. I would use this positioning and our research when speaking with prospective partners in order to better educate them on the opportunities to partner with the NBA. I've already told Jim to get this prepared for horse racing, so the tracks, Breeders' Cup, and other entities can use this. I love the saying "high tide raises all boats," and horse racing can take advantage of any positive momentum around the business. Take a look.

(Video played.)

There are many parallels to what I just shared for horse racing, and it would be great to have a rallying cry and united marketing campaign to promote this sport. So let's talk about why sponsorships are so important to any sports property and I know will help exponentially scale the marketing of horse racing.

Sponsorships are endemic to successful sports properties as this is a key indicator of the health of the sport. The more demand, the more popular the sport. The higher the sponsorship fees to align with the sport, the more selective a property can be with choosing who to align with. What I've learned over the years is it doesn't matter how much demand you have for a property, the ways to bring in more fans and get national and global exposure is to go out and find the right companies. There are a number of reasons for a company to sponsor a sport -- enhancing image; shaping consumer attitudes; driving sales; creating positive publicity and heightening visibility; differentiating from competitors; enhancing business, consumer, and VIP relations. Finding a company that falls into these buckets is the first place to start.

Let me give you an example of one of my favorite NBA partnerships that I worked on. One of the first deals I did was in the wireless category. We had a partner up for renewal who was No. 1 in market share in the wireless category and aligned with all of the other professional sports leagues. So they had a lot already in their portfolio. I needed to find someone else in the category that needed to build market share, get national brand exposure, and would market the NBA as their No. 1 priority.

I brought in T-Mobile, and at the time they were doing nothing in sports. We had them partner up with Dwyane Wade and Charles Barkley, and they started running national TV spots, ran promotions in-store at their thousands of locations, and they went from No. 5 to No. 1 in consideration of NBA fans now to use them as a category, with all metrics listed throughout the tenure of the partnership.

Another great example is a recent partnership that I worked on with ExxonMobil. They had been aligned with motorsports as the cars use their fuel, so it was a natural fit. Yet they still needed to worry about growing as a business, getting new customers, and appealing to a more diverse audience.

I kept pitching them on the NBA as I knew we had a different audience than motorsports and if they kept speaking to the same fans, they wouldn't grow. We could get them in front of a younger and more diverse audience and build a story around performance of their products, juxtapositioned around the great performances of our players.

This is the type of alignment companies are looking for, and horse racing offers so many great parallels and the key assets companies look for as they invest their dollars.

Having the right assets is usually the biggest hurdle for some sports. They are seasonal, only appeal to certain demographics, players aren't accessible, and you could never attend anything live.

This is not the case for horse racing. You have all of the right ingredients.

You have a low cost of entry. 99.9% of the population may never attend a live event of the top sports properties. While I know some argue admission should be free at racetracks, that doesn't seem to be a barrier for a family having a great day at any of your racetracks.

Accessibility of athletes: You are a sport that the athletes don't wear masks, and they are out in the public, very accessible for fans to get up-close exposure. That matters and builds lifelong fans if they feel connected.

Thrilling moments. You have racetracks around the world, and every few minutes there are thrilling moments. This is very uncommon, as most sports are seasonal.

Fertile ground. You are a sport that is underexposed, with many new companies to entice and promotions to try out with fans.

And, finally, you have so many owners that are involved in other businesses. I would always look close to home when I was researching companies to pitch at the NBA. For me it was did they go to Cornell and are they involved in horse racing. It was a jackpot most of the time. With the new crop of owners and those that have been in the game, there are countless opportunities to get their businesses outside of racing involved in being part of racing.

As evidenced by the graph of top sports vendors, there are many industries out spending in sports. I've prioritized the below as they have significant retail footprints, thousands of customers, and are looking for the assets horse racing has to offer.

Apparel: The top apparel manufacturers -- Under Armour, Nike, adidas -- are all aligned with the professional sports leagues and athletes. They have the right technology in their clothing for athletes to perform better and know how to market to their millions of customers. While preserving owners’ silks, which I know are sacred, there can still be an official apparel partner who can manufacture and promote the fact that they outfit all jockeys.

Spirits: Celebrations are essential to horse racing, and spirits companies are always looking to be the official toast or celebration partner. While I know there have been track-based partnerships in this category, how about a national promotion to tune into races to win special experiences at the top tracks throughout the year.

Technology: There are so many companies looking to use virtual reality and artificial intelligence products to bring fans closer to the game. These are areas that could bring so many new fans to racetracks once they are able to experience firsthand what a day at the races could look like. There are also so many wearable products to put on horses and jockeys to track every statistic imaginable, which fans love as they consume more data about sports and athletes they love.

Restaurants: What do people like to do at the races? Eat, drink, bet. This is a communal sport, and why not have restaurants across the country be a destination for you to go watch the best races if you can't attend live.

Finally, service industries. From cell phones to insurance companies and emerging categories like Uber, Airbnb, and Amazon Prime, there is so much potential to appeal to their customers and ease the experience for horse racing fans as they plan their trips to tracks around the country. Kudos to NYRA for the new Uber partnership this year.

So here are some final thoughts to leave with you. Partnerships will absolutely scale the visibility of horse racing to a global audience, with thousands of restaurants and stores, along with companies running national TV spots and promoting horse racing, this will be a critical component to growing the sport.

Providing centralized assets that give national exposure. Companies don't want to negotiate with several entities. They want a package of assets that can be turnkey, which will require tracks to work together along with your broadcast partners to provide larger partnership opportunities for companies to invest.

Research your fans and then sell against what companies need. Defining the core and casual horse racing fans will help prioritize the right companies you can go out and pitch.

It would also be a top priority to invest in expanding business development resources to have people out pitching year around. You should have people who head up sponsorships at industry conferences, cultivating relationships and very visible. When I worked at the NBA, you knew exactly who to speak with about partnerships, and horse racing should have this too.

Promote the sport. Everyone is an ambassador, from tellers to owners and everyone who can promote their experiences and fandom of racing. My twins are doing their fair share, and my family will continue to bring in new fans wherever we can. With over $60 billion up for grabs, the timing is now to be out getting horse racing their fair share.

Thank you very much for inviting me to speak today, and best of luck for future success. Good luck at the races.

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