BELMONT STAKES

1.  The Belmont Stakes traditionally has been called the “test of the champion.”  That appellation is more appropriate for the Epsom Derby in that a distance of 1 ½ miles is more common and more valued in Europe than it is in the United States.  Even in Europe, however, the superstar and undefeated Frankel never ran in a race beyond 10 furlongs and most of his starts came at a mile.

In America, the overwhelming majority of racehorses never run a race of 12 furlongs and most of the horses that compete in the Belmont don’t run the distance again.  The Eclipse Awards denoting champions are populated with horses that never ran 12 furlongs, as is the list of leading sires.

“Test of the champion” has a noble ring to it, but it is not factually true.

2.  Following are the average times for the Belmont Stakes in the decades since 1960:

1960-1969:  2 minutes 28.86 seconds

1970-1979:  2 28.78

1980-1989:  2 27.94

1990-1999:  2 28.51

2000-2009:  2 28.58

2010-2016:  2 29.61

To be really precise, the years when the Belmont was run on off tracks should be eliminated from the calculations.  Nonetheless, the figures are sufficiently representative to conclude that race times have not improved over the last 57 years.  On the other hand, the 21st century American-bred 3-year-old racehorse appears just as capable of running 12 furlongs as his ancestors from over a half century ago.  (This view is subject to change, however, if the average time for the decade 2010 through 2019 turns out to be about a second slower than previous decades.)

3.  Without the possibility of a Triple Crown winner, the on-track and television audiences for the Belmont are likely to be mediocre.  In fact, neither the winner of the Kentucky Derby winner nor Preakness winner will be in the race.

Copyright © 2017 Horse Racing Business

238th ENGLISH DERBY

The Investec Epsom Derby (the English Derby) bills itself as “the greatest flat race in the world.”  It certainly is the most famous and prestigious turf race.  The 238th edition will be run on Saturday June 3, 2017, at 4:30 PM (British time).  The race covers 1 mile 4 furlongs and 10 yards and has a purse of £1,625,000, the richest race ever in Great Britain.

The 20-entry field is dominated by three interests.  Coolmore Stud and its trainer Aidan O’Brien have seven horses entered; Godolphin has three entries; and trainer John Gosden trains five entries for various owners.  Thus these three account for 75% of the entries.  If that is not enough, Aidan O’Brien’s oldest son, Joseph, a two-time winner of the Epsom Derby as a jockey, trains another entry, though one not owned by Coolmore.

Aidan O’Brien and John Gosden have trained four of the last five winners of the Epsom Derby and Coolmore (and its partner Michael Tabor) are the all-time leading owners with six wins.

The chances for another victory by Aidan O’Brien or John Gosden are favorable, given they together train 60% of the field.  Currently, the Gosden-trained Cracksman is the favorite and the O’Brien-trained Cliffs of Moher is the second favorite.  Cracksman is a tepid choice and there is an opportunity in the large field for unexpected results.

The Epsom Derby is an elegant event on turf with the Queen always in attendance, and is always worth watching.

Copyright © 2017 Horse Racing Business

SHORTAGE OF UNSKILLED LABOR ON THE BACKSTRETCH AND FARM

The current problem for U. S. racehorse businesses (and all employers of unskilled labor) in finding and retaining employees has at least five causes:

  • The economy is at virtually full employment.
  • The labor-force participation rate has been declining for a decade and hovers close to a multi-decade low.
  • There is fierce competition among employers for U. S. Labor Department-issued H 2-B visas for seasonal unskilled workers.
  • Stricter federal policy on border security and illegals in the country is having an effect.  The Obama administration stepped up deportations and the Trump administration is accelerating the effort.  The number of illegals leaving the United States now exceeds the number coming in.
  • It is increasingly difficult to find employees who can pass a drug test as the pool of available workers declines.

The April 2017 unemployment rate in the United States stood at 4.4%, which is essentially full employment when people moving between and among jobs is allowed for.  However, the labor-force participation rate, defined as the percentage of working-age Americans who are either employed or looking for a job, is only 62.9 percent.  The labor-force participation rate declined from 66.4% in January 2007 to 62.9% in April 2017…and the multi-decade low was 62.4 percent in Setember 2015.

If more potential workers could be enticed back into the workforce, the labor-force participation rate would increase and the labor shortage of unskilled workers would be alleviated to an extent.  In the absence of this happening in a significant way, the competition for workers should eventually drive up wages.

The horse-racing business is already under pressure from stagnant revenues (i.e., pari-mutuel wagering and purses), so hefty increases in costs owing to higher wages would exacerbate the problem.

Even if the federal government were to significantly increase the number of H 2-B visas, horse-racing businesses would have to compete against a plethora of other employers of unskilled workers for the visas.  In addition, horse-racing businesses need full-year workers rather than seasonal.

The alternative is, of course, for employers to continue to hire illegals.  The Wall Street Journal recently wrote in “Crackdown Causes Unease on the Backstretch”:  “At racetracks around the country, many of the grooms, exercise riders, and stablehands have green cards or full citizenship, but a greater number are in the country illegally, according to immigration lawyers and trainers.  Other workers come and go on temporary visas.”

Thus the low-skill workforce in the horse-racing industry is predominately illegal, which is precarious, owing to ethical issues and possible fines and adverse publicity.

Whereas manufacturers can move plants to low-wage countries and service companies–like accounting and computer services–can outsource work offshore via the Internet, restaurants, landscaping firms, and horse-racing businesses on the backstretch and farm mostly cannot.  To the extent possible, the answer is to automate labor-intensive processes and to make the pay more attractive.  Barring that, some businesses will continue to run the risk of hiring illegals and others will downsize or cease operations.

Copyright © 2017 Horse Racing Business