Ogden Mills Phipps: At this time, we're going to have a continued progress report on the NTRA by D.G. Van Clief, the commissioner and CEO. D.G…

D.G. Van Clief, Jr.: Thank you, Dinny.

Last year at this conference, the NTRA previewed an ambitious agenda for the coming year. As anticipated, it has proven more than just a challenging time - in fact, I would characterize the past 12 months as the most critical year for this young organization since its launch.

We've spent the lion's share of the past year in developing and communicating a new strategic plan for the NTRA for the five-year period beginning next year.

The first step in this process was a detailed review of the NTRA's activities with the goal of identifying which programs have worked, which haven't, and what we've learned in the process.

The next step was an assessment of where the industry as a whole stands today, which, with industry consolidation - mainly in the form of Churchill Downs Inc. and Magna - and the dramatic growth of Internet-driven entertainment products, is remarkably different from when the NTRA was announced at The Jockey Club Round Table in 1997.

The results of these efforts are set forth in the new strategic plan that is included in your materials. It envisions a newly focused organization where all programs are tied directly to quantifiable results. The plan calls for us to execute on a number of fronts. Some key goals are:

• To leverage our brand new, landmark eight-year ESPN - ABC contract as the launching pad to grow the Breeders' Cup and market major racing days domestically and internationally with a level of frequency and creativity unprecedented in horse racing. ESPN and NTRA have initiated production of a series of televised races and race days leading up to the Breeders' Cup that will be characterized by much-improved presentation quality, from story lines to camera angles, along with much higher levels and frequency of promotion. We had a great meeting with Mark Shapiro and his team in New York this week;
  
  
• To reinforce the credibility of racing both as a sport and a gaming product by the creation of a strong national Office of Racing Integrity, and by ensuring that our image - whether it involves the care of our horses or the care of our customers - is considered first-class by any standard;
  
  
• To strengthen an ever-growing political power base at both the state and federal level with a proactive legislative agenda;
  
  
• To expand the industry's relationship with marketing partners such as Emirates Airline, Dodge, John Deere and Federal Express, and continue to strengthen the value that all parties receive from our sport's association with major global corporate brands;
  
  
• And finally, to build on the NTRA's capabilities as a spokesman for our industry, and, more importantly, as a forum for developing the solutions and strategies necessary to ensure our future well-being and growth.

To implement this plan, the NTRA will refocus many of its current resources and add some important new talent, especially in those areas that will enable us to get the most out of our new relationship with ESPN.

We believe that the 2006 to 2010 strategic plan is flexible enough to meet the threats and capitalize on the opportunities that lie ahead.

We urge you to study it carefully and we do welcome your input on any and all aspects of the plan.

With the limited time I have this morning, rather than review the plan recommendations and conclusions in any further detail, I would like to take a few minutes to share with you some candid personal observations about the challenges and opportunities that, I believe, lie ahead for the NTRA and the Thoroughbred industry as a whole.

As I mentioned earlier, 2005 is an absolutely critical year for the NTRA. We face renewal of every membership contract - we're making great progress but we're not there yet - and we also face renewal of many of our most important marketing partners.

It is, perhaps, just as important a year for the industry as a whole. We continue to face serious challenges on a number of fronts:

As you heard from both Dinny and Dan Fick this morning, our wagering technology - including our aging tote system - is lacking in state-of-the-art efficiencies. This limits our ability to expand our customer base; it leaves us vulnerable to activities that threaten the integrity of our wagering pools; and ultimately it threatens the viability of our relationship with racing's most important constituencies: our customer, our marketing partners, and government.

While overall interest in the sport is up, this year our core economic indicators are flat or down. Through the first half of the year, wagering handle for the country as a whole is down approximately four percent.

And our product needs attention. Field size is decreasing nationwide, which obviously has a negative impact on handle.

When you add to these challenges the fact that competition in the entertainment and gaming world only gets stronger with the addition of new product each year, it becomes absolutely apparent that we must aggressively seek ways to upgrade the quality of our racing product and the way in which it is priced, packaged and sold - whether on site, through account wagering systems, via television or on the Internet.

If we do not collectively embrace available and emerging technologies as vehicles for growth, we risk losing a generation of new customers, just as we did in the '50s when television was cutting-edge and we ignored it then.

Here again, I think our relationship with ESPN is going to provide some immediate benefits. For example, the broadcaster will deliver next year NFL Monday Night Football to a growing audience on ESPN 360 and ESPN Mobile. ESPN 360 provides customized sports content via broadband Internet while ESPN Mobile, a joint venture with Sprint, will deliver sports and breaking news to your cell phone. Both applications will carry the 2006 Breeders' Cup to a younger, techno-savvy customer base.

As we assess how the industry can compete in this environment, the lesson that repeatedly jumps out at me - and this is a theme you've heard throughout this morning - is that we continue to be at our best only when we work together.

If the NTRA has demonstrated anything in its first seven years, it is what can be accomplished when all segments of the industry - racetracks, owners, breeders, horsemen and regulators - pull in the same direction. Look at the areas where we have acted in unison and what we have accomplished:

After three years of hard work and effective fund raising, the NTRA, as you've seen this morning, is now recognized and has real influence on Capitol Hill. Federal legislative advocacy has preserved our sport's position as the only legal Internet betting activity in the United States and has obtained, or is on the brink of obtaining, important tax relief for tracks, owners and breeders. Continued funding and work in this area is an absolute and ongoing necessity.

We have attracted a number of new corporate partners to our sport by combining our industry's considerable buying power with major events. In just over four years, we've attracted companies such as Dodge, John Deere, Emirates Airline, Bessemer Trust, NetJets, Guinness, Century 21, Grey Goose and others, none of which were associated with Thoroughbred racing just four years ago.

In 1997, when the NTRA was still in the planning stages, the industry's concern was that horse racing was not even on the public's radar screen. Eight years later, horse racing is the only sport that has enjoyed five consecutive years of popularity growth among U.S. citizens 18 years of age and older. And in 2004, racing posted the largest single gain in popularity among the general population, a jump of 5.1 percent.

And even in these areas where we have achieved success, we've all learned repeatedly that change is difficult and progress comes slowly. But we have shown that progress does occur when we work together.

Going forward, we will focus our efforts on the areas where we believe we can make critically important contributions, and it is my hope that the National Thoroughbred Racing Association will become much stronger and more effective as a unifying, energizing, creative, solutions-oriented organization.

I am certain that it can be all of these things. The tools are available. All it takes is the faith and the will to subordinate our parochial agendas in favor of growth.

In closing, I am going to leave you with the NTRA's vision statement...and I'll paraphrase. Our vision is that:

• Racing continues to be a Top 10 sport; we're there already;
  
  
• There will be measurable growth in our economic indicators led by the promotion of major racing days;
  
  
• We will capitalize on account wagering's growth potential, which is immense;
  
  
• Our bloodstock markets remain vibrant and reflect strong demand;
  
  
• Every aspect of our sport is viewed as having the highest level of integrity, no matter what yardstick you apply;
  
  
• And finally, that we have an ever-growing presence and power base on Capitol Hill and in state houses.

These are ambitious goals, but with your support, we know absolutely that they can be achieved.

Thank you.

Ogden Mills Phipps: Thank you, D.G. D.G. is to be commended for the exceptional job he has done as Commissioner and CEO.