Ticket sales for the infield at the Preakness Stakes — the state’s biggest single-day event — are down 30 percent compared to this time last year, even as organizers are facing an Under Armour-sized gap in their lineup of corporate partners.
After years of hosting a finish-line hospitality tent emblazoned with the Under Armour logo and inviting top athletes and other celebrities to the May race, the Baltimore athletic brand pulled the plug on its Preakness party this year.
The decision, tied to Under Armour’s struggling sales and stock price, leaves a sizable hole in the hospitality village at Pimlico Race Course for the second leg of horse racing’s Triple Crown. And it’s not the only issue handicapping the Maryland Jockey Club, which owns Pimlico, the race’s 148-year-old home.
“I’m down 4 percent in the building and 30 percent in the infield,” said Sal Sinatra, the Jockey Club’s president and general manager.
Yet Sinatra remained optimistic because the music acts for the infield, which holds “upwards of” 50,000, won’t be announced until next week, and the race typically “gets a lot more sales in April” as anticipation builds over horses that may contend for the Kentucky Derby and the Preakness.
But losing Under Armour hurts.
The company’s big corporate tent and logo were prominent in the infield and offered prime finish-line viewing. The brand had long turned the Preakness into an extended weekend for clients, celebrities and other guests.
Under Armour, which has endured slower growth in U.S. sales and marked stock price declines since the end of 2016, said it was focusing on “becoming a more operationally efficient company” and would devote this year’s Preakness weekend to community service.
A company such as Under Armour might pay “a few hundred-thousand dollars” to rent a prime Preakness spot, Sinatra said.
Losing Under Armour’s tent “is definitely a loss in a lot of ways,” Sinatra acknowledged. “It’s not just financial. I think the biggest loss will be not seeing that logo in the infield.”
The brand’s oversized presence at the nationally-televised race helped raise Baltimore’s profile, said Howe Burch, president of TBC Advertising.
“It was the who’s who of celebrities in sports and entertainment,” Burch said. “You would walk through the tent… and it was always interesting to see who was going to show up at the Preakness at the Under Armour tent.”
Under Armour’s “parade of celebrity athletes” helped attract more race attendees, said Marie Yeh, assistant professor of marketing at Loyola University Maryland’s Sellinger School of Business
“That will be hard to replace,” Yeh said.
Under Armour’s celebrity guests have included NFL quarterbacks Tom Brady and Cam Newton, NBA star Stephen Curry and Olympic swimmer and Baltimore native Michael Phelps. Plank also has hosted retired boxer Mike Tyson, broadcaster Tom Brokaw, actor Kevin Spacey and former Secretary of State Colin Powell.
Such celebrities and other high-profile guests, who might not have otherwise attended the Preakness, added to the economic impact of the event, said Anirban Basu, an economist and CEO of Sage Policy Group.
“It’s good for hotels… good for the Maryland Jockey Club, and it’s good for overall economic impact generated by the Preakness,” Basu said. “The downsizing of the corporate tent population isn’t going to help… This is going to be quite a void.”
Preakness revenues are critical for the Jockey Club, netting about $7 million to $9 million. Last year, the event drew a record crowd of 140,327.
“It carries the year,” Sinatra said. “Our high was 2016 when we netted around $9 million.”
The Jockey Cub also owns Laurel Park, which could become the home of the Preakness one day if the aging and increasingly decrepit Pimlico is not rebuilt or replaced.
Preserving Pimlico likely would require rebuilding the track at a cost of $300 million to $500 million, according to its owner — which has no plans to foot the bill. Simply renovating the track wouldn’t elevate it to the necessary standards, says The Stronach Group, the Canadian horse racing conglomerate that is the Jockey Club’s parent company.
Gov. Larry Hogan has said he wants to keep the Preakness in Baltimore, although lawmakers say it would be difficult to win approval of a sizable investment for the track.
Under Armour isn’t completely removing itself from Preakness weekend. Sinatra said Under Armour CEO Kevin Plank “is still sponsoring horses” and a race on the Friday before the Preakness.
In the company’s absence in the infield, Sinatra said a chalet s being constructed “that will sit there all year. They’ll use it for moon rides and other events.” He called the chalets “semi-permanent” structures of metal and glass that can be moved..
This year, Stronach will occupy the most visible chalet and use it as a prototype for future years, hoping that — like a model home — it will entice other companies to lease similar structures in future years.
“The chalets will be more hard structures than tents, to try and give a better experience,” Sinatra said.
The thinking is, he said, that more business can be attracted “by giving them more amenities.”
But Basu said Pimlico’s condition means the race annually falls short of its potential as the second leg of the Triple Crown.
“To really have the impact that we want the Preakness to have requires much more than a tent or even a group of new corporate tents,” he said.
The loss of Under Armour could add to the argument for moving the race to the Laurel track, a spot more closely aligned with the Washington region, Basu said.
A race in Laurel would be better positioned to draw international horse racing fans and others traveling through Washington Dulles International Airport as well as to engage the Washington-area business community, Basu said.
Sinatra said the argument over Pimlico’s fate won’t be influenced by the degree to which this year’s Preakness manages to attract corporate sponsors.
“One doesn’t play off the other,” he said.
Even without Under Armour, Sinatra said the Preakness is not hurting for corporate business.
“We’re able to compensate. There are always people looking,” he said.
The corporate village “is pretty much sold out,” he added.
Corporate partners include Budweiser, the sponsor of the InfieldFest; Maker’s Mark, the bourbon whiskey maker; DeKuyper, which makes spirits and liqueurs; BMW; and Pepsi.
Under Armour’s decision to scale back on Preakness party-hosting makes sense for the brand at a time when shareholders are more closely scrutinizing corporate expenses and even the appearance of lavish spending, said T.J. Brightman, president of A. Bright Idea, a public relations and marketing firm with offices in Bel Air and California.
“In my experience, there will be other companies that will likely step up and want to have that beachfront property,” for entertaining clients during races, Brightman siad. “It’s not the right year for Under Armour.”