Monday, April 04, 2011
(CHICAGO, IL – April 4, 2011) A suggestion’s importance is determined in proportion to the influence of the individual who offers it. The same is true of an idea, an opinion and a decision. People automatically connect value to source when it comes to subjectivity. Many people with excellent input never have it acknowledged because they themselves are not noticed as experts. It has always been this way since the age of the idea began.
Recently, The Blood-Horse Magazine asked 29 people for their suggestions on how to improve horse racing. It was the kind of question for which answers have been given time and again and, consequently, very few of the suggestions were original. The dearth of ingenuity expressed may be owed to the ease with which the people who were questioned were able to dispense with an answer by reprocessing suggestions that others, specifically those not invited to participate, had already given. The source, in this case, was suspicious.
“The Blood-Horse recently cast a wide net into the pool of Thoroughbred industry participants” was how Eric Mitchell, Editorial Director and Editor-in-Chief, began his March 26 “What’s Going on Here” column. What’s going on here, indeed, when the industry’s most influential publication doesn’t include the industry’s most influential people in a survey that was taken to identify process.
Not one high-ranking representative of the Breeders’ Cup, National Thoroughbred Racing Association or The Jockey Club, or any of the organizations that are supposedly at the center of power, was asked. Neither, for that matter, was the media.
“We wanted to hear from people who are actually out there in the industry making a living, or more actively involved in some aspect,” Mitchell explained, after noting that industry leaders which his magazine neglected have a standing forum for ideas. As for the slight to the media, Mitchell indicated that after some deliberation his staff believed that it had selected the right people without them. Yes, he admitted that the chosen respondents might have offered nothing different. But that they were asked seemed sufficient to him.
The Blood-Horse divided its survey’s respondents into eight different categories. But the three individuals represented as Horseplayers/Fans were professional gamblers, thus suggesting that a third group was not included. Horse racing has a sizable following of non-bettors or casual bettors that crave an improvement for the sport. On the totem pole of influence, however, these faces are almost invisible, having neither money nor clout.
“Because horse racing is kind of a small enough sport and it still has a lot of intimacy, the media interacts with the fans. Many of the media are horse racing fans themselves,” noted Tom Law, president of the National Turf Writers and Broadcasters. “I do look at the media as having a position to speak for the fans,” Law admitted, stressing that journalists who are doing their jobs properly have to mingle with all segments involved.
“Every member of the media has the responsibility to his readers to point out things that aren’t working and point out things that are working. That’s the role – to report the news, but also to put it into perspective and to point out what it means and how it affects the industry,” Law believes. Nevertheless, except for the rare exception, even the most conscientious turf writers haven’t influenced the sport to operate in many ways for its own good. They, like the survey’s respondents, seem to have their ideas entertained, rarely acted upon.
So, what was the purpose? Mitchell said that the survey was research. Aside from contributing eight pages of content to a wafer-thin 48-page publication, the article enabled people, accomplished in industry specialties but not often heard from, to sound off on issues. In addition, the survey revealed a consensus. Never mind that it’s unclear of who might have stated the ways to fix horse racing first, there was general agreement among 29 people. That, in itself, is unusual.
Although The Blood-Horse determined that the respondents settled on five ways to fix horse racing, there were really only four in the conclusion. Numbers four and five – both addressing the need for medication policy reform - were so decidedly intertwined that they’re hardly separable. If there was a long shot in the bunch, it was the recommendation that the sport should appoint a commissioner and organize nationally. It, too, was eerily similar to another suggestion; that suggestion was to market the sport widely and aggressively.
Ironically, in one sense, all five recommendations are nothing new. Horses ran drug-free before the expansion of racing dates. With Tim Smith directing the activities of the NTRA as a de facto commissioner, handle and attendance grew handsomely. Less is more was the principle that safe-guarded churn and guaranteed that the sport appeared precious. The emergence of endless horse racing burst the bubble. Greed put an end to the common sense that existed.
Now, regardless of how advisable reversing the clock is, temperance seems almost hopeless. The changes required won’t arise from the obvious. The sport has fallen too far, become mainstream irrelevant and dependent on competitors that bring no positive bearing on its value prop. The uniquely American love of money poses a persistent confusion. Considering its position, the business should behave as a start-up. Instead, it is harvesting revenues.
Managed properly, a start-up will prosper eventually. But who in horse racing has the patience? Moreover, who has the vision? What The Blood-Horse’s cover story substantiated is that the sport finds itself in the unenviable bind of adhering to presumptions that nobody can prove because nobody can implement. Characterize the survey’s respondents however you wish. Just don’t interpret their conventional wisdom as advice that can solve anything.
Vic Zast has been a contributor to The Blood-Horse for nearly a dozen years. He writes Vic Zast's Saratoga Diary for bloodhorse.com each summer.
Written by Vic Zast
Sunday, March 27, 2011
(CHICAGO, IL – March 28, 2001) It seems inconceivable that anyone who witnessed the $26 million spectacle at Meydan this past Saturday could have watched the lavish proceedings on television without reflecting, at least for a brief moment, on the incongruity between them and the manner in which most people live.
As Japan’s Victoire Pisa was earning $47,619 a second for his billionaire owners in the $10 million Dubai World Cup, revolutions were occurring in nearby Syria, Bahrain, Kuwait, Yemen and Libya where folks had their fill of self-appointed despots. Meanwhile, the USA was borrowing feverishly to finance the new insurrections while neglecting to repair its infrastructure, looking askance at climate change, firing teachers and public workers, letting pensions disappear in thin air and allowing millions of unemployed to fend for themselves as the greatest recession in 80 years persisted.
Never mind that 81,000 devout Maktoum family beneficiaries jammed the grandstand and cheered as Godolphin triumphed three times before the night was out. At latest count, nearly 14 million Americans are jobless. Those that have work are working for practically the same pay they received 30 years ago. The richest 10 percent received 100 percent of the average income growth in the years 2000 to 2007. The richest five percent claims nearly 65 percent of the nation’s wealth; the bottom 80 percent, merely 13 percent. Are the same out-of-whack circumstances bearing their weight on the purse structures at racetracks?
Well, the good news is that horse racing, at least on this continent, is considerably more equal-minded than life elsewhere. Although 18.5 percent of all purses were won by the top 100 owners in 2010 – up from 17.3 percent in 2009, the distribution of wealth remains reasonable. The top 10 owners in 2010 shared more than $37 million in comparison to slightly more than $50 million in 2009. But there were 81 owners that earned more than $1 million in last year and 87 owners the previous year. Being counter-cultural, alas, is a blessing.
Granted, the accounting may be flawed because several of the top 100 earning owners participate in partnerships. But the leader board reveals clearly that dominating the sport economically has a serendipitous component. The 2010 leader Winstar Farm, for example, won over $5.1 million, almost $1.4 million shy of Michael Gill’s ill-gotten 2009 total. Gill and the other two owners in the top three - Juddmonte Farms and Zayat Stables - each earned more than $6 million. Furthermore, Gill’s operations were severely curtailed in 2010, causing him to disappear from the list entirely. Juddmonte fell to sixteenth, earning 40 percent of what it earned when finishing second to Gill, and Midwest Thoroughbreds leapt the same distance Juddmonte fell, jumping from fifteenth to second.
“Everybody’s trying to buy a horse that can compete in the big races,” said Joe Santanna, the national president of the Horsemen’s Benevolent and Protective Association, indicating that optimism runs high in all barns, no matter how fancy they’re decorated. “There will always be a dilemma for how you allocate purses for stakes races versus the overnight program,” Santanna added, noting that the bulk of the people who populate the stalls on the backside of a racetrack depend on the latter. “But I don’t believe tens of thousands of owners, initially, or even after a while, believe winning a stakes race is elusive,” he added.
Santanna, in free market sync, believes that the biggest rewards should go to those who become deeply invested. He cited Mike Repole (number five on the 2010 list with earnings of $3.75 million) and Bobby Flay (number 90 at $970,000) as representative of new names in the game that were able to find success amid the establishment because of commitment. Despite his reluctance to accept that purses have suffered least as a category in the sport’s recent economic downturn, they have stayed at nearly the same level throughout the century’s first decade – making it good for all parties.
At just over $1 billion in 2010, purses were off less than $100,000 from 2000. In comparison, overall handle has fallen nearly $3 billion or 20 percent from $14.3 billion to $11.4 billion. Nevertheless, if the money earned by all starters was divided by the number of starts, each start would be worth $15. Ninety-five PGA golfers, averaging fewer than 22 tour starts, made more money than the top 81 horse owners last year, averaging more than 198 races.
“Every racetrack should have allocated from its purse account an amount that goes to the stakes program to attract better horses for the sake of the fans and for the sake of marketing the product nationally and for the sake of having the opportunity to attend live racing instead of staying at home and watching it on your TV or computer,” said Santanna, in contrast to what you’d expect from a guy whose primary responsibility is to the many instead of the few.
This opinion conflicts with the problem that too many old stakes worth six figures attract fields of a half dozen horses or less, of a caliber far below those that should have been in them, had not they retired prematurely. An owner could work his way up the earnings list by keeping a fast runner in training instead of sending him to the breeding shed. Yet, the math doesn’t favor that decision. Horse racing’s sport and breeding is business. At least, that’s the sum of it.
Lest readers think that any owner seeks fiscal equality, consider the structure of the business. A nation of horse owners with similar wealth would be as anti-American as communism. “I don’t begrudge the guy who spends $10 million on horses because he’s helping our breeding industry. He’s helping those folks in Kentucky with continuing to price their stallions at reasonable fees,” said Santanna, a right-minded, wide-eyed and unrealistic capitalist elected to serve by the democratic process.
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Written by Vic Zast
Monday, March 21, 2011
Ennui Over Racetrack Afterlife
(CHICAGO, IL – March 21, 2011) Very few stories by horse racing writers result in impromptu news teleconferences. But the Thoroughbred Retirement Foundation, with the help of the National Thoroughbred Racing Association, invited the media to a party line only hours after Joe Drape’s scathing exposé was published in Thursday’s New York Times.
Drape implicated the TRF in equine cruelty by declaring that the charity neglected to pay farmers on their contracts to oversee retired horses. His article’s headline – “Ex-Racehorses Starve as Charity Fails in Mission to Care for Them” - guaranteed that the piece would be flammable. If the need to maintain industry friendships doesn’t get in his path, the Eclipse Award-winning journalist could wind up winning a Pulitzer Prize with work of this fervor.
Readers are entitled to draw their own conclusions about what was written. But Drape wrote a news story, reported without editorial embellishment. He confirmed his objectivity by implication when calling in on the conference connection to ask Tom Ludt, the TRF’s chairman, and George Grayson, the group’s president, with which of his points they found fault. Although the three men expressed disagreement, the dialogue was cordial. Was there interest among others in that which was spoken? Hardly. Only four media representatives asked questions.
“The TRF – a national charitable organization – asked for our help,” said Eric Wing, Sr. Director of Media Relations, when asked to explain why the NTRA hosted the presentation. To most people, where the NTRA’s charter begins and what it includes are unclear. Nevertheless, it is good that the sport’s most effective news clearing house realizes that sweeping dirt under the rug will result in an untidy living room. “If an issue of national significance pops up, one that directly affects our members and one that requires timely action, then we’re happy to help out,” Wing remarked.
Drape’s provocations didn’t lay open the important question about who really should pay for keeping horses no longer productive alive, but they certainly prompted it. In most consumer businesses, the manufacturer accepts the return of products that don’t live up to their promise or funds the process with a markdown allowance or damages fee. Many people believe that the industry, even without a commissioner, could enact a requirement that holds breeders and owners accountable for providing the horses a racetrack afterlife.
“In the final analysis, racing has to decide what it’s going to do about this,” commented Michael Blowen, the founder of Old Friends, which cares for about only a tenth the number of horses in the care of the TRF, but maintains a roster of former stars such as Marquetry, Tinner’s Way, Gulch and Sunshine Forever. “It’s a solvable problem, and it doesn’t even take that much money,” Blowen argued. “We have horses here that have generated $75 million in their careers, and they have no Social Security and no 401-k. It’s the fans that are taking care of them,” he noted.
Blowen believes equine retirement homes should be supported by the industry in the same manner as waste management companies are supported by garbage producers. As for the TRF’s finances, Grayson acknowledged an operating budget of $2.7 million, explaining that five percent of a $7 million trust established upon the death of Paul Mellon represents 13 percent of the total. Given reasonable administrative costs, this amount seems sufficient to care for the 1000 horses on the TRF’s farms, although it didn’t appear adequate last year.
In regard to investigative ennui, there are several reasons that explain why many turf writers are indifferent to controversial issues. In the first place, there aren’t many outlets for horse racing news, let alone news that is costly and hard to gather. The beat isn't sweet any longer. A writer with talent and ambition will do better by investing his time eslewhere. The few turf writers still on the payrolls of magazines and newspapers are asked to wear several hats. Their employers give them little time and money to produce work on a topic deserving of little coverage. One is only as good in his job as his opportunity allows.
As for those who do choose the sport, the knack for knowing on which side of the bread you'll find butter is attained quickly. Many writers learn that the people they cover are also a source of psychic income. An invisible line’s often drawn that becomes hard to cross when a subject reflects poorly on the benefactors. Harboring a love for the sport that’s extraordinary, some writers become star struck with trainers and jockeys. In addition, it pays not to bite the hand that feeds you. There have been notable cases in which racetracks have punished an individual for following the requirements of his trade by denying him access, ignoring his calls, making him feel like an outcast or cutting him off from free coffee.
Lastly, because only trade members support the sport's media with ad money, pressure is placed on trade press editors by publishers to watch out for what’s being published. Even the most successful Internet sites, including the biggest aggregator, owe their existence to the racecourses, farms and betting sites. Publications that run articles that reflect poorly on customers often lose the support of those customers. Outlets such as the Times have a broad-based, diversified advertising base to compensate when revenues are held back in protest by advertisers offended by editorial content.
When stories like Drape's hit, the industry's shocked by their impact and candor. People bristle. They affect damage control. Ludt concluded the teleconference by exaggerating to Ron Mitchell of bloodhorse.com that the story might serve as a blessing. He intimated that the TRF was receiving new donations as a result of what Drape had written. If that is true, a reaction came quickly.
In any case, defending yourself from a negligence charge is a strange way to fund-raise. Come to think of it, relying solely on charity to care for the horses' retirement is strange.
Drape reported on Friday that the New York Attorney General’s Charities Bureau will review the complaints about fiscal irresponsibility and shoddy horse care that have been leveled against the TRF, a Saratoga Springs, NY institution. Wing will be pressed into duty again if the Bureau finds impropriety.
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Written by Vic Zast