In conversation with Jim Lawson - Mr Woodbine

  IN CONVERSATION WITH Jim Lawson - Mr Woodbine      Jim Lawson has literally grown up with Woodbine Racetrack, he was born in the same year that the track opened in 1956. Today Lawson assumes the roles of CEO of Woodbine Entertainment Group, Chairman of Ontario Racing, as well as chairing the board of governors of the Canadian Football League. He recently sat down with Giles Anderson to discuss the future direction and goals for racing and the Woodbine facility in the years to come.      It would be fair to say that you came to racing through a sporting injury and looking back your career may have well evolved on ice.      Yes, I played US College Hockey at Brown University in Rhode Island. By 1978 I was drafted by the Montreal Canadiens. I left school early, I had enough credits to graduate but had an injury-prone two and a half years in their organisation, with many issues. Ultimately, I retired and went to law school, and when I went to law school, like a lot of people, I thought ‘wouldn't it be great if I could do sports law, or be a player agent, or whatever?’ And of course you soon realise that you need that foundation of law and legal contracts, so I ended up doing commercial law for the most part.     So here I am, 30 years later, being in a position where I am with the Canadian Football League. Even though I was a hockey player, I always had a passion regarding football and horse racing. My dad had Thoroughbred horses from the time I was six or seven years old, so I used to come out here 1965, 1966, when I was 10 years old. He ran a modest stable, but a successful stable. He was a great student of the game and I think he won 67 stakes races here with a very modest stable over the years and he's in the Canadian Horse Racing Hall of Fame.     So I spent my early years around Woodbine and also studying bloodlines.      So how did you end up working for Woodbine?      Mostly because of the clients through my work at a major downtown Toronto law firm and as I'd spent a lot time around Woodbine, the board was aware of me. They initially asked me to come on the board to look after the 700 acres of land that they had here. So I joined the board and then I evolved into being chairman of the board in 2012.     Then in 2015, when the CEO stepped down, the board asked me to step in and, here I am. I've gone from chairman to CEO here now, but I have a big background, as I said, in horse racing and a big part of what we're doing today is real estate development.      How many teams make up the Canadian Football League?      There are nine teams. We're looking to expand it, Halifax to be a tenth team, but there are currently five teams in the west and four teams in the east. Montreal, and Toronto, and Hamilton and Ottawa and as I said, potentially an expansion team in Halifax, so a lot of teams across the country.      Why do you think has there not been as much expansion in the last five years as much as there has been of teams in soccer?      Well, that's a good question. In football, the biggest, I think, single achievement is the renewal of capital investment in the stadiums, which has been a big plus. There's been a completely renovated stadium in Toronto, a brand new stadium in Hamilton, a completely renovated stadium in Ottawa, a new stadium in Saskatchewan, a new stadium in Winnipeg. So the biggest achievement, I think, is the reinvestment of capital to keep the league in good shape in the sense that it's very much a gate-driven league as opposed to many other sports, which are television revenue driven. We do have the television contract with TSN and we have good ratings on the sports network, which is a Bell Globe Media property. But I think the biggest thing that the league has done is reinvested itself and set itself up for a strong future.      Do you see a big crossover from what you’ve learned about football into racing?      The biggest challenge we have is two-fold and they're related. And that is an ageing demographic in both sports. Our core customer is probably that 50-year-old to 70-year-old male. I think we're doing a good job in horse racing because of our food and beverage experience and the cost of having a good experience here. We're making great strides in bringing up that younger customer. But our real core wagering customer fits in that 50 to 70-year-old demographic.     The same is true in the Canadian Football League, it may well be true in the golf world and the tennis world, and so that is a real challenge to see and it is actually of interest for me to see how both organizations from the marketing partnerships approach that. And then secondly the challenge in both sports has been the consumption of the sport and what I mean is that the Canadian Football League is a gate-driven league, while in order to get people interested in horseracing, you really need to get them here and see the horses and feel the horses and just the excitement.     In both cases now, in a large part on the football side the evolution, it's not just overnight, it's the last 15, 20, 25 years depending on your measure of the large screen TVs that sit in everyone's den or family room. People want to consume sports in luxury, and television has done a great job with production, with slow motion and replays and analysis and making that television experience so great, so that a lot of people would rather than sitting out in colder weather, they'd rather sit in home in the comforts of their den or family room, watching television on a big screen TV. The same thing for horse racing, really. We have, for business purposes, made it very accessible to wager on horse racing through the internet. People don't have to come out here any more and that's a challenge.     So we've got a couple of sports there where, because of technological advances and just raising the level the game of how we distribute our content in both cases, you're challenged in terms of getting people interested. People are only going to invest in horses if they are out here and they get the excitement of the game. We need new owners, we need new breeders and you're not going to get that from people who are gambling over the internet, you're going to get that from people who come out here and say, "Wow, I love this, wouldn't it be fun to own a horse."     And the same with football, you need to get them out to the game to experience it and meet the players and see the players. One of the challenges with football, especially in Canada with so many sports coming - soccer has grown huge, or European football, shall we say - I think that one of the things we need to do with football is to get youth playing it and the likelihood of that happening is if they can get out to the games and feel the excitement, and watch it and meet the players.      Every jurisdiction needs more owners and more breeders. What do you feel as a racetrack that you could do to help promote ownership, or promote breeding in the sport?      Attracting new owners is going to have to come from the racetracks because we're the ones to benefit from it. So, we accept that responsibility. If there aren't horses, if there aren't owners, then there's nothing to wager on and the very fundamental core of the business breaks down and we're seeing some of that, of course, right?     I think we all have to understand, it's going to take a great deal of effort in terms of creating those new owners and breeders to sustain the sport in order for it to do so. In terms of racetracks, I think we need to accept that responsibility and that is, in large part, not an easy puzzle. Many racetracks, including ourselves, have worked and supported syndications and partnerships of ownerships of horse races and racing clubs, as part of our our whole focus of bringing new people and improving the food and beverage experience, for example, and we're working on making wagering much simpler. We're doing a lot of things to expose this sport to the new demographic.     At the end of the day, I mean, a lot of those things are loss leaders from an economic standpoint in the short term, but hopefully over the long term, exposing a whole new generation of people to racing and hopefully people who will want to own horses and be part of the sport. That's the way we're looking at things and we need to, because if we don't do it, no one else is really doing it, right? So there is a lot of onus and responsibility on the racetracks. Balanced against, these racetracks for the most part are struggling just to operate. So it's a challenge.      How much does your marketing budget centralize on demographics and getting customer feedback?      Oh, substantial. I mean we're becoming increasingly more sophisticated in terms of analytics and data. It's primarily, again, through the wagering data. We're doing everything we can when we offer that food and beverage experience to get people back here and to get them interested, giving them racing tours, like we're very focused on, and becoming much more sophisticated. Not only in terms of how we treat our wagering product and how we make money and doing the analytics on that, but also the analytics on our customers and where they come from and how we market to that younger group.     It's fairly easy - I said this many times - for racetracks to get people out to Royal Ascot Week, to get them to come to the Arc, to get them to come to the Kentucky Derby, to get them to come to the Queen's Plate. The real challenge we have is that we run 133 days of Thoroughbred racing here and it's to get people to come out on the other times of the week and show some interest and how do you get them out here? You might be able to get them to wager over the internet if you do a good job getting them interested and showing them how easy it is to wager on horses.     But back to the earlier concern about marketing and interesting that younger demographic, it's a case of getting them back out here to experience it. So we are very focused, and I would say what is becoming part of our brand promise at Woodbine is the food beverage experience.     When we've rebranded ourselves, and we come out with our new brand, our brand promise is really to create those experiences for the customer and the large part of that is our food and beverage experience. No admission, no parking charge, come and enjoy sports and have a great food and beverage experience, and that's how, I think, we can compete in a very competitive sports and entertainment market. There's major league sports in Toronto as there are in New York, as there are in Chicago, and other, and Los Angeles, and so we're in a very competitive environment and we have to find ways to make ourselves attractive relative.     It's not just sports, it's entertainment, it's theatre, it's music, it's everything. So here we have a 5000-seat music center scheduled to come in and an entertainment district. We're very much excited about that and being able to cross-sell those people. There's about seven million people that come to the Woodbine property today and we are expecting that there'll be anywhere from 12 to 15 million people coming to the site in the next three to five years and we're going to take the opportunity and seize the opportunity to cross-sell and bring people and expose them to horse racing.      Is your profit margin greater from the food or from the wagering?      From the food, our margins are higher. I can compare somewhat to the United States, but our parimutuel model is a very, very difficult model in Canada, so our margins are thin. Our margins on the restaurant side are, probably, market relative to the cost of food, and services, and hospitality, and hence that's why people are in the restaurant business. It is a tough business, of course, but there's no business tougher than running a parimutuel racetrack, and trying to pay purses at the same time.      What for you would be the ideal simulcast model if you could rewrite the script?      Well, I think it really comes down to the regulatory environment, and the tax environment on parimutuel tax dollars. We do not get paid for putting on the content, and it's just a model that has evolved and the margins are extremely thin, and no racetrack, certainly in this country, can afford to exist clearly on just parimutuel wagering. Hence we've had to rely on our relationship, which is now a private commercial relationship with the gaming provider here, and otherwise find ways to generate revenue through our real estate. But, the parimutuel model does not work.     In an ideal world, it would be changing the tax model, the tax on the wagering the parimutuel dollar to give more to the racetracks to pay them for the content that they're putting on. That's just not happening, and I think not only in Canada but I'll say in North America and probably internationally, the racetracks have to do a much better job of showing the economic impact that the racing industry has.     It's a very labor-intensive industry, and I don't think people appreciate how labor-intensive it is. We currently employ about 2.1 people per horse on our backstretch. So, the numbers are huge for live racing, and the economic impact it has, when you think of all the support services, whether it be trucking or fuel or feed providers, hay providers, in addition to the thousands of people that would work on them. We have 2000 horses on our backstretch today, while we have based on my numbers and they work out, we have over 3000 people working there everyday and then all the support services. So I think that we can't afford to sustain that based on the parimutuel tax model that we have today. So, whether it's a simulcast model or other, at the core the problem is we can't afford to do it and pay enough in purses to sustain this.      Fixed odds or parimutuel odds?      Well, I think there's an argument for both. I mean, I like both models. We're clearly parimutuel, and there's the fixed odds have had success in other jurisdictions of the world and I hope and think, especially single game sports betting is illegal in Canada today. As that comes on, I hope not only that horse racing can play a role in single game sports betting in the sense that we're logical hosts to it with our infrastructure, with our tote systems, with our back office. We could run single game sports betting, but also it segues into the competition of fixed odds betting, which also, I think, we need ultimately to offer in order to compete with single game sports betting.     So, it's both. We have to be careful, especially given my comment about a labor-intensive industry that we do not get cannibalised by single game sports betting in Canada. Secondly, consistent with that, we're allowed to offer new products in order to compete with single game sports betting. You've seen slowly in the United States certain jurisdictions take up the cause and involve horse racing. You see the type of products that are being offered in New Jersey now, and I hope and think that's the future in Canada. That people who are implementing single game sports betting will recognise that given the importance of horse racing to our economy and to our rural economies that they don't shut us out, and further cannibalise a business which has trouble today because it employs so many people.      You run 133 days racing currently, but would you ever consider a model where you ran 80 days, or increase to say 150 days?      It's directly tied to horse supply of course. If we had 3000 horses on that backstretch, I'd be happy to increase the 133 days. So part of the problem is horse supply and having to run that often, required to run by our licence 133 days, we're running a lot of days with small fields. That’s not healthy for anyone. What we really need to examine, is what would it would look like if we went to 80 days? It's a slippery slope in a couple of ways. No question in my mind that that substantially decreases your wagering revenue.     Also, the other slippery slope is one of the strengths of Woodbine as a racetrack relative to other racetracks in North America is that 133 days is a lot of days at racing. Trainers can come here and park here, have their employees here, find an apartment year round. That eight months is a real strength of what we've got here. So, I would be very reluctant to go down too much, because it would be giving up on one of our biggest strengths, which is pretty much year round Thoroughbred racing. When I say year round, 133 days through eight months really lets some big trainers come and park here and establish an employee base and it's also nice for the horses. They're not moving jurisdiction to jurisdiction and no one could argue that moving that moving horses 500 miles is healthy for them. It's nice for the horses, and it's nice for the trainers and that's why I think Woodbine is an attractive destination for trainers, because they can just come and park here for eight months.      What about your relationship with Fort Erie and the other Canadian tracks? Do you support those tracks?      We do, it's an interesting challenge right now. First of all, a little-known fact, outside of Woodbine and maybe Ontario racing people, is Woodbine currently runs the back office for three quarters of the race tracks in this province. So we run their whole wagering system, we collect the money for their wagering system, we actually pay out all their purses to the owners, we manage everything for the other race tracks. We don't manage their operations.That model may well increase under the new long-term funding arrangement that's been entered in with the government that we will increase that back office for them. We have a good relationship, because of our wagering network, and all of the racetracks in Canada work with us.     The biggest challenge we've had, and you mention Fort Erie, is simply horse supply. We're actually competing with them for horses right now, and it's difficult for them, and it's difficult for us. If we had another 600 or 800 horses between the two racetracks there wouldn't be an issue, but right now we are struggling for horse supply. Our horse supply and our field sizes, and we have worked extremely hard this year, greater focus on it than ever in terms of incentivizing owners, recruiting owners, doing all sorts of things. We're down under eight horses, average for field size.     So that has put us in some conflict or competition with Fort Erie, but we do have a good relationship with them, I think what's put pressure on and strained the relationship is horse supply and that's somewhat true of the Standardbred tracks too.     My only wish is that we had more horses and that this wouldn't be an issue at all. But, given the demographics of the sport and the economics of running a racetrack these days, harken back to my commentary about parimutuel wagering. The racetracks are struggling and part of the reason they're struggling is the field size and horse supply. So, we're all fighting over it and every race track in North America right now is fighting and struggling for field size.      Where do you see Woodbine internationally now?      Some great horses over the years have raced here, both in the international and the mile. I think from an international standpoint, our product is being recognized. I think that we've long done a good job with some of the top European trainers have come here for the Mile and the International.      Next year will see the addition of a new turf course…      Our turf course is becoming more renowned in terms of we've had an opportunity to certainly market it more and it's a mile and a half course. We're adding next year a seven-furlong inner course with state-of-the-art drainage, which will be fun because much like I think they have at Happy Valley, they can get a pretty strong rainstorm and it drains so well and that's the kind of surface that we've set up here at Woodbine for next year. That it's a sand base with fibre in it. It'll drain right through it.     So we're planning on running six turf races every race card next year, making Woodbine kind of  the  turf destination. We'll have turf days, I think we'll be converting some of our stakes races to turf stakes races. We'd like to see ourselves as the turf destination in North America and in part start to not only attract European horses for our big events, which I think we do as good a job as anyone. Maybe a better job than anyone other than the Breeders’ Cup. Potentially with a view to having some European outfits, particularly the English and Irish interest coming in and bringing a small group of horses here for the summer as a lead-in to those fall races.     So we think we're gaining momentum. We can only measure it by wagering but our wagering is increasing substantially in Australia, certainly in the United States we're gaining market share. I think it's a recognition of the quality of our product. I think we have a good reputation as an honest brand of racing, quality racing, safe racing and I think we're in a good position to move forward and I think that second turf course will even help more. And we're hopeful because I think that's where the growth is internationally.      Do you see yourself expanding the schedule of international races?      You know, we would like to. It really comes down to looking at the competition and what they're offering and it's an interesting challenge. You know we have a couple of Group 2 races on the grass, three or four of them, actually, and what would it take to make them Group 1 races? And as we look around, there are races in New York, there are races in Kentucky, and it's a competitive environment right now for the best horses. There just aren't enough good ones right now.      How are you developing the Woodbine signal internationally?      It's developing well but I'm always amazed at the amount of red tape, for lack of a better term, that exists in other jurisdictions. I mean, hats off to what they achieved in Japan but it's very hard to penetrate that in terms of what they allow there in terms of racing. We have a great relationship with the Japan Racing Association and we like them and we're sharing more things we sponsor to race there. They're bringing a large delegation over for Mile Weekend. But whether it's in France or whether it's in Sweden on the harness side, the middle men in these wagering relationships are difficult to overcome.     We would like to find ways to work closely with the Hong Kong Jockey Club, with Japan. France is another one, the PMU group there. We think that's a way to go and we're very focused on that and I think the Woodbine product, both on the Thoroughbred and the Standardbred side is gaining acceptance and we're starting to see that. And I think it's, as I said, because of the quality of our productions and so we're confident we're making strides there for sure. And I hope, and with the quality of people here, I think it will continue.      Woodbine being open 24/7 for its casino side of the business and the development plans you have, it has always struck me as a business that never stands still. If I come back to Woodbine in say five years’ time, what am I going to see that's different from the Woodbine today?      Well you will see a very vibrant community. I think you will see an entertainment district which will include a music auditorium, having 135 shows per year. I think you'll be able to get here by public transportation. Complimentary to the entertainment experience and the expanded gaming and table games that we'll have, there will be all the quality food and beverages which I hope will continue to build on what we have today.

By Giles Anderson

Jim Lawson has literally grown up with Woodbine Racetrack, he was born in the same year that the track opened in 1956. Today Lawson assumes the roles of CEO of Woodbine Entertainment Group, Chairman of Ontario Racing, as well as chairing the board of governors of the Canadian Football League. He recently sat down with Giles Anderson to discuss the future direction and goals for racing and the Woodbine facility in the years to come.

It would be fair to say that you came to racing through a sporting injury and looking back your career may have well evolved on ice.

Yes, I played US College Hockey at Brown University in Rhode Island. By 1978 I was drafted by the Montreal Canadiens. I left school early, I had enough credits to graduate but had an injury-prone two and a half years in their organisation, with many issues. Ultimately, I retired and went to law school, and when I went to law school, like a lot of people, I thought ‘wouldn't it be great if I could do sports law, or be a player agent, or whatever?’ And of course you soon realise that you need that foundation of law and legal contracts, so I ended up  doing commercial law for the most part.

So here I am, 30 years later, being in a position where I am with the Canadian Football League. Even though I was a hockey player, I always had a passion regarding football and horse racing. My dad had Thoroughbred horses from the time I was six or seven years old, so I used to come out here 1965, 1966, when I was 10 years old. He ran a modest stable, but a successful stable. He was a great student of the game and I think he won 67 stakes races here with a very modest stable over the years and he's in the Canadian Horse Racing Hall of Fame.

So I spent my early years around Woodbine and also studying bloodlines.

So how did you end up working for Woodbine?

Mostly because of the clients through my work at a major downtown Toronto law firm and as I'd spent a lot time around Woodbine, the board was aware of me. They initially asked me to come on the board to look after the 700 acres of land that they had here. So I joined the board and then I evolved into being chairman of the board in 2012.

Then in 2015, when the CEO stepped down, the board asked me to step in and, here I am. I've gone from chairman to CEO here now, but I have a big background, as I said, in horse racing and a big part of what we're doing today is real estate development.

How many teams make up the Canadian Football League?

There are nine teams. We're looking to expand it, Halifax to be a tenth team, but there are currently five teams in the west and four teams in the east. Montreal, and Toronto, and Hamilton and Ottawa and as I said, potentially an expansion team in Halifax, so a lot of teams across the country.

“THE BIGGEST CHALLENGE WE HAVE IS TWO-FOLD AND THEY’RE RELATED. AND THAT IS AN AGEING DEMOGRAPHIC IN BOTH SPORTS.”

Why do you think has there not been as much expansion in the last five years as much as there has been of teams in soccer?

Well, that's a good question. In football, the biggest, I think, single achievement is the renewal of capital investment in the stadiums, which has been a big plus. There's been a completely renovated stadium in Toronto, a brand new stadium in Hamilton, a completely renovated stadium in Ottawa, a new stadium in Saskatchewan, a new stadium in Winnipeg. So the biggest achievement, I think, is the reinvestment of capital to keep the league in good shape in the sense that it's very much a gate-driven league as opposed to many other sports, which are television revenue driven. We do have the television contract with TSN and we have good ratings on the sports network, which is a Bell Globe Media property. But I think the biggest thing that the league has done is reinvested itself and set itself up for a strong future.

Do you see a big crossover from what you’ve learned about football into racing?

The biggest challenge we have is two-fold and they're related. And that is an ageing demographic in both sports. Our core customer is probably that 50-year-old to 70-year-old male. I think we're doing a good job in horse racing because of our food and beverage experience and the cost of having a good experience here. We're making great strides in bringing up that younger customer. But our real core wagering customer fits in that 50 to 70-year-old demographic.

Woodbine’s vision for the future

The same is true in the Canadian Football League, it may well be true in the golf world and the tennis world, and so that is a real challenge to see and it is actually of interest for me to see how both organizations from the marketing partnerships approach that. And then secondly the challenge in both sports has been the consumption of the sport and what I mean is that the Canadian Football League is a gate-driven league, while in order to get people interested in horseracing, you really need to get them here and see the horses and feel the horses and just the excitement.

In both cases now, in a large part on the football side the evolution, it's not just overnight, it's the last 15, 20, 25 years depending on your measure of the large screen TVs that sit in everyone's den or family room. People want to consume sports in luxury, and television has done a great job with production, with slow motion and replays and analysis and making that television experience so great, so that a lot of people would rather than sitting out in colder weather, they'd rather sit in home in the comforts of their den or family room, watching television on a big screen TV. The same thing for horse racing, really. We have, for business purposes, made it very accessible to wager on horse racing through the internet. People don't have to come out here any more and that's a challenge.

So we've got a couple of sports there where, because of technological advances and just raising the level the game of how we distribute our content in both cases, you're challenged in terms of getting people interested. People are only going to invest in horses if they are out here and they get the excitement of the game. We need new owners, we need new breeders and you're not going to get that from people who are gambling over the internet, you're going to get that from people who come out here and say, "Wow, I love this, wouldn't it be fun to own a horse."

And the same with football, you need to get them out to the game to experience it and meet the players and see the players. One of the challenges with football, especially in Canada with so many sports coming - soccer has grown huge, or European football, shall we say - I think that one of the things we need to do with football is to get youth playing it and the likelihood of that happening is if they can get out to the games and feel the excitement, and watch it and meet the players.

TO READ MORE —

BUY THIS ISSUE IN PRINT OR DOWNLOAD -

Breeders’ Cup 2018, issue 50 (PRINT)

$6.95

Pre Breeders’ Cup 2018, issue 50 (DOWNLOAD)

$3.99

WHY NOT SUBSCRIBE?

DON'T MISS OUT AND SUBSCRIBE TO RECEIVE THE NEXT FOUR ISSUES!

Print & Online Subscription

$24.95

Osteochondrosis - genetic causes and early diagnosis

0