The world's most famous sled dog race is feeling squeezed by the poor economy.

Organizers of the Iditarod Trail Sled Dog Race said Monday they've lost nearly $1 million in funding over the past year and that is forcing them to cut the prize money for the 2010 race by $100,000.

Stan Hooley, executive director of the Iditarod Trail Committee, said figures are still being worked out but he estimated the total purse will be about $525,000 _ down from a high of $925,000 in 2008. The new purse is far below the $610,000 initially promised to the 75 mushers signed up for the 1,100-mile trek to Nome.

"We have to meet as staff and work on amendments like that, unless we're able to see new revenues," Hooley said.

The prize for the winner has been $69,000 in past years, but that amount will drop as well, according to Hooley. He said an exact amount has not been determined.

Mushers were reeling over the cut, said Lance Mackey, the three-time defending Iditarod champion, who is seeking his fourth consecutive win in next year's race. The event is scheduled to kick off March 6 with a ceremonial start in Anchorage.

It takes a lot of money and time to train dog teams for the event, said Mackey, also a four-time winner of the 1,000-mile Yukon Quest International Sled Dog Race. Even though the Iditarod purse is shrinking, the price of dog food and other expenses are likely to remain the same or even increase. Any cuts in prize money will be keenly felt and could drive many mushers away, Mackey said.

"Ultimately, it's taking money out of my kids' mouths," he said. "This is a huge, huge blow, not only to mushers but to the sport in general. There's a lot of us who have pretty much devoted our lives to making a career of racing dogs."

Organizers said they are facing a reduction of $455,000 in revenues after losing a media partnership and two sponsorship deals in the past month.

They lost another media sponsorship as well as a significant cut in sponsorship money in late 2008 that reduced coffers by $485,000. That meant a $300,000 reduction in prize money for this year's race.

The latest sponsorship losses mean salary cuts of roughly 20 percent for committee staffers, who also are losing their health insurance. The affected staffers include Hooley, who earned $110,719 in 2007, according to the committee's filing with the Internal Revenue Service. Top earner that year was the organization's development director, Greg Bill, who collected a salary of $133,314.

Despite the latest losses, the entry fee remains at $4,000. The fee was raised from $3,000 for this year's race, which took place in March.

Cushioning the cuts somewhat, Exxon Mobil has pledged $250,000 annually in a five-year deal, Hooley said. The race also retains a few dozen other supporters.

"Without them, this would be a much worse situation, but this is pain enough to experience," Hooley said.

Copyright 2009 The Associated Press. All rights reserved. This material may not be published, broadcast, rewritten or redistributed.