At this time of year, the Del Mar Fairgrounds is usually bustling with guests from the San Diego County Fair, an event that provides an estimated 58% of the Fairground's annual revenue.
With the Fair canceled due to the coronavirus pandemic, this week the 22nd District Agricultural Association, the fair's operating body, announced it's reducing staffing by 58%.
The 22nd DAA fears even more cuts could be necessary unless revenues somehow increase. This is where the summer racing season at the Del Mar Thoroughbred Club becomes so crucial.
"This is going to be a very difficult year for us. It's been a difficult year for the Fairgrounds in general with no San Diego County Fair and our revenues being down," says Joe Harper, CEO of the Del Mar Thoroughbred Club. "We have to make some money here and pay a little rent to make this place financially feasible, which I think we will."
The summer racing season will begin early, on July 10, but will do so without people in the stands. That is a major hit for revenues at any sporting event and the DMTC is not exempt.
"Probably about $15 million for a summer race meet without patrons," says Harper.
Much of that money also goes to operating costs of the Fairgrounds in general. Del Mar has instituted strict health guidelines for anyone and everyone involved with horse racing (not even horse owners will be allowed on site) because it knows the financial health of the site could hinge on people spending a whole lot of money on races without ever walking through the turnstiles.
"The interesting thing about racing is, for us at Del Mar, 90% of our betting handle every day is off-track," says Harper. "So, while we love having 20,000 to 30,000 people in here, there's still more money off-track through different racing sites, online, that type of thing. So I think our handle should be fairly good."
The handle is the total amount of money wagered on races. Each track gets to hold on to a certain percentage of that. Last year Del Mar set a track record for its fall racing season with nearly $12 million over just 13 days of racing.
"It's a major source of our income and it will be primarily our only source of income," says Harper.
If betting at other tracks is an indication it could, amazingly, be enough to keep the Fairgrounds afloat. Horse Racing Nation looked at five tracks that kept racing, without fans, during the early stages of the COVID-19 outbreak. They took the first two weeks of April and compared it to the first two weeks of April 2019.
During just two weeks, those five tracks saw an average handle increase of $51 million and the numbers could be even bigger for Del Mar.
Typically the Triple Crown races have already run by the time our summer season begins. This year only the Belmont Stakes (which you can watch Saturday at 11:45 a.m. PDT on NBC 7) will have been completed so that opens Del Mar to a situation it's never had before.
The fields here have always been extremely good but now that the Kentucky Derby will be run in September with the Preakness Stakes set for October, Del Mar becomes an immensely important training ground.
"With the placement now of the Triple Crown races we can adjust our stakes to be more of a prep race for the Triple Crown races, for the Derby especially," says Harper.
Also, the last weekend of racing at the DMTC will coincide with the Run for the Roses, a potential financial windfall for Del Mar and the Fairgrounds.
"That means a good percentage of the money that's bet in California on the Kentucky Derby will benefit us. Those kinds of things are benefits that we haven't had before," says Harper.
This is going to be the most financially trying summer in Del Mar Fairgrounds history but it could get by with a strong run down the stretch.
"It's going to be fine," says Harper. "We'll do as well as we can. There'll be a little rent check and next year is going to start over all-new, hopefully."