Lower projected turnout and revenue weigh on Sonoma County Fair

The agency that runs the Sonoma County Fair and manages the fairgrounds reported a nearly 90% drop in its profit in 2019, recording a revenue loss of $1.37 million, and officials expect another blow to the bottom line this year when the fair shifts to a new schedule that will conflict with the start of the school year.

The loss, accounting for more than 10% of the fairgrounds’ annual budget, was largely driven by the end of one-time revenue from FEMA, which paid $1 million to the fairgrounds in 2018 to store emergency trailers that housed victims of the 2017 firestorm.

But longer-term financial struggles associated with decreased fair attendance, a horse racing program that barely breaks even and rising costs continue to put pressure on the agency’s solvency, according to county documents.

The losses come on top of a six-year slide in paid attendance at the fair - the largest source of annual revenue and costs for the fairgrounds, which has now seen revenue drop every year for more than a decade.

“What we’re experiencing here is really the challenge with horse racing,” Bartling said, noting losses in track revenue statewide. “That used to be a significant portion of our revenue. That’s where we’re seeing the biggest decline.”

The forecast losses in 2020 are driven by a forced racing schedule change this year that’s expected to translate to fewer paid visitors and less retail revenue, according to county documents, plus a sharp drop-off in revenue from horse racing and increased labor expenses tied to a $3 increase in the city minimum wage, to $15 per hour.

Fair leaders fought the schedule change, which pushed the fair to Aug 5-16, one week later than normal and overlapped with the start of school. Their appeal was overruled by the California Horse Racing Board during its December meeting.

Bartling previously predicted a $500,000 drop in revenue if the schedule change took effect. New documents show officials are now projecting a smaller loss of about $200,000, with predicted attendance dropping 5.7%, to 118,538, which would mark another low point in attendance.

The biggest factor, fair officials said, is the schedule change forced upon the fair by the state board overseeing horse racing.

Max Mickelsen, board chairman of the Sonoma County Fair, said it’s hard to quantify how much money is spent by people who come to the fair for horse racing.

It’s long existed as one of the most popular draws, but is on the wane as a revenue engine amid a precipitous drop in betting revenue and attendance, a national trend.

Bartling said that means less purse money, which in turn means fewer people are raising and training race horses.

“It’s kind of a spiral that happens with all of it,” she said.

Fair officials have discussed ending horse racing and transforming the track site, but they’re loath to give up on a timeworn tradition that still generates revenue for the fair, albeit a shrinking amount.

This year, the fair board predicts it will earn $1,441,000 from horse racing and satellite wagering, compared to $2.2 million in 2008.

Horse racing turned a profit of $75,000 last year. This year, it is not expected to be profitable.

“Our feeling is that if we were to drop horse racing and not have it at all, that’s a huge group of people that otherwise wouldn’t be coming in,” Mickelsen said.

The fair already plans to spend $600,000 from its $4.9 million in reserves to balance its 2020 budget.

“We think we’re pretty solid on our projections,” Bartling said. “We certainly hope that (the fair) ends up better than projected.”

The fair plans to increase ticket prices and rental rates for event space to offset losses, but those moves could backfire, officials acknowledge, and deepen the fairgrounds’ economic woes, which have coincided with a nationwide slip in fair attendance and offerings.

Fair leaders said they are working to overcome the demographic shifts and general decline in interest that they see as the root of the problem.

“The older demographic that grew up with horse racing are moving on, passing on, and the younger demographic is more oriented toward different types of activities,” Bartling said.

Bartling and Mickelsen pointed to special, discounted days, including the $2 opening day and free Thursdays for kids 12 and younger and free Fridays for seniors, as factors that could offset some losses.

And Mickelsen said the price increases aren’t that bad compared to other costly family destinations.

“Look around at what they’ve done on Disneyland prices. These ticket price increases are not significant,” Mickelsen said.

Ticket prices this year will go up $3 for adults and youth, marking the first increase since 2017, when the price hike coincided with a drop in the fair length, from 15 days to 11 days.

Nearly 60% of fairgrounds revenue comes from the annual county fair and horse racing, according to the 2020 budget. About 5% is covered by reserves and the other 36% will come from the 325-plus events hosted year-round, a slate that in 2019 brought in 1 million visitors.

The fairgrounds lost about $150,000 as a result of event cancellations last year during the Kincade fire, but those losses were offset because Cal Fire paid $270,000 to have its command base at the fairgrounds during the disaster.

Bartling said her organization provided space but also helped with services, including maintenance and operation of the site.

“A lot goes on with it,” she said. “Cal Fire reimburses us for revenue lost ... they pay to rent your facility.”

You can reach Staff Writer Tyler Silvy at 707-526-8667 or at tyler.silvy@pressdemocrat.com