A GROWING THREAT TO THE AMERICAN RACING ENTERPRISE: REAL ESTATE VALUES

If one were to look solely at sales figures from leading Thoroughbred auction houses Keeneland and Fasig-Tipton, the conclusion would be that the American horse racing enterprise is buoyant.  Expand the view to include the retail side of racing and the outlook is cautionary.  While the bloodstock segment of the racing business is indeed healthy, the retail or racetrack segment is imperiled…and a major reason is that real estate values have soared for the land on which most racetracks sit.

A diminishing number of racetracks means, of course, that there will be fewer and fewer places to race horses.  In addition, live racing is how new fans tend to be cultivated. 

The sale of Arlington Park to the Chicago Bears and cessation of racing there leaves the nation’s third-largest city with a single racetrack.  Other racetracks that reside on land more valuable for development than racing encompass, among others, Santa Anita Park, Aqueduct, Gulfstream Park, and Golden Gate.  In Florida, the 2022 closing of Pompano Park leaves harness racing with no presence in the state.  The same fate could happen to Florida’s Thoroughbred tracks, Tampa Bay Downs and Gulfstream Park.

In Great Britain, the Jockey Club owns 15 racecourses, such as prominent tracks like Epsom Downs and Cheltenham.  It also owns 5,000 acres, mostly at Newmarket, that are used for training and racing.  By contrast, the vast majority of the racetracks in the United States are owned by corporations that have little or no connection to the bloodstock side of the racing industry (Keeneland is the obvious exception).  With the approaching sale of Frank Stronach’s breeding operation, Adena Springs, the Stronach Group’s Thoroughbred racetracks–Santa Anita Park, Golden Gate, Gulfstream Park, Laurel Park, and Pimlico—will no longer have a significant family connection to the breeding side of racing.

When older American racetracks were built, they were structured to accommodate the large on-track crowds of the day–long before remote wagering–and were located in areas then untouched by urban sprawl.  Now huge grandstands are largely unneeded and expensive to maintain.  And, with the relentless expansion of cities to the suburbs, tracks are often worth far more for commercial uses and housing than for racetracks.

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JOCKEYS: INDEPENDENT CONTRACTORS IN A HIGH-RISK BUSINESS

Avid bettors on horse racing know how to get the best Grand National or Kentucky Derby odds but may not know how the jockeys who pilot the horses are compensated or how much they earn.

Jockeys are independent contractors and don’t receive a salary, similar to professional golfers and tennis players.  In this respect, they are one-person businesses.  A jockey must pay his or her agent, who is responsible for obtaining mounts, as well as pay a valet…and also has outlays for expensive health insurance, taxes, and incidentals.

A jockey gets a modest fee for riding a horse (between $30 and $100 in North America) and receives additional cash if the horse finishes in the money.  For instance, when jockey Sonny Leon recently won the 2022 Kentucky Derby aboard Rich Strike, he earned 10% of the winning owner’s share of the total purse.  The Kentucky Derby purse was $3 million and the winning owner grossed 62% of this amount, or $1.186 million.  Leon received 10%, or $186,000, for his ride.  After paying his agent 25% and his valet 5%, he netted about $130,000 pretax.  The jockeys on the second and third-placed horses received, respectively, 5% of $600,000 (20% of the $3 million purse) and 5% of $300,000 (10% of the $3 million purse).

This was the biggest payday ever for Leon, as he had never before won a graded stake, which are the most lucrative races.  Leon’s career has been spent mostly at racetracks that don’t offer many graded stakes, if any at all, where jockeys ply their hazardous trade out of the spotlight.

Premier jockeys like Mike Smith and Irad Ortiz are in high demand for graded stakes and have the opportunity to earn large sums.  But the vast majority of jockeys don’t get mounts in top-flight races.  According to Career Trend, average annual earnings for jockeys in the United States are between $30,000 and $40,000, which is a range skewed to the high side by the million-dollar-plus earnings of the best jockeys.   

More realistically, Career Trend estimates that half of the jockeys in North America earn less than $12,000 annually.  Betting USA puts the figure at less than $20,000 per year.  Either way, most jockeys are in a dangerous occupation and earn very little for the risks they incur. 

Copyright © 2022 Horse Racing Business

PILLARS OF RACEHORSE AFTERCARE: HANOVER SHOE FARMS AND OLD FRIENDS

Preakness week is a time of excitement in the world of American horse racing, as leg two of the Triple Crown showcase approaches.  It is also an appropriate time to recognize the out-of-the spotlight organizations that do such humane work with retired racehorses, often saving them from grim fates and finding them new homes and occupations as sport or pleasure horses.  Take a look at two of them that have exemplary records of achievement, one from the world of Standardbred racing and the other from Thoroughbreds.

Hanover Shoe Farms in Hanover, Pennsylvania, is the longtime leader in breeding trotters and pacers, living up to its motto of “the greatest name in harness racing.”  The farm’s stallion portfolio traditionally includes some of the premier studs, its broodmare band is always top flight, and their progeny perennially win some of the biggest races.  What the farm is less known for is the exemplary way it treats its horses that are too old to be productive as breeding stock.  As of February 2022, for example, it had 126 retired mares in its care, and each mare receives lifetime retirement at the farm regardless of whether she earned $300 or $300,000.  Hanover Shoe Farms even lists each of its retired mares on its website. See their names by clicking here.

On the Thoroughbred front, Old Friends farm in Georgetown, Kentucky, is one of many homes for retired racehorses. Old Friends specializes in taking in horses with notable achievements. During Kentucky Derby week 2022, Chuck Culpepper of the Washington Post wrote an article about the farm and its 19-year history.  In its early days, its founder Michael Blowen had lots of farm debt and scarce cash contributions to cover it.  He relates the story of how, in this time of need, a couple from North Dakota visited the farm and said they wanted to make a donation but forgot their checkbook.  Blowen said he had heard this before.  Several weeks later, the couple sent Blowen a check…for $500,000. Culpepper’s article can be read by clicking here.

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The Thoroughbred Aftercare Alliance has accredited 82 organizations, listed here.

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