Archives for September 2010

WHAT TO DO ABOUT RACHEL

Two weeks ago, on August 21, my article on Horse Racing Business was titled “If I Owned Rachel Alexandra or Zenyatta.” This was posted eight days before Rachel Alexandra was caught late in the Personal Ensign Stakes at Saratoga in which she finished a game second.

Jess Jackson now has three reasonable options for his popular filly Rachel Alexandra and two longer shot options, as follows:

1. Retire the filly immediately. This is a defensible course of action if trainer Steve Asmussen is convinced that Rachel will not return close to her 3-year-old form. Unless she does, she certainly has little business in the Breeders’ Cup Classic and will be challenged in the Breeders’ Cup Ladies’ Classic by the likes of Blind Luck and Devil May Care.

2. Run Rachel Alexandra in an upcoming race in early October and evaluate how well she does. Use this barometer as the key in deciding whether to take Rachel Alexandra on to the Breeders’ Cup Ladies’ Classic or retire her. She would need a convincing win to proceed on to Churchill Downs in early November.

3. Train her up to the Breeders’ Cup Ladies’ Classic without another race. This decision would give the reigning Horse of the Year a chance to notch a Breeders’ Cup win before her retirement. There is little downside to doing so, as even if she were to be defeated, she would still be remembered for her stellar 3-year-old campaign, especially her win in the Preakness.

Lower-Probability Options

4. Go for the big prize and run Rachel Alexandra in the Breeders’ Cup Classic. This would require her to last a mile and a quarter with Quality Road (and others) putting the pressure on early and Blame, Zenyatta and others coming late. It is difficult to see how Rachel Alexandra could win such a race, given that she could not hold off the aptly named filly Persistently in the Personal Ensign Stakes after putting away Life at Ten. This, in my view, is the worst option on the board.

5. Enter Rachel Alexandra in the Breeders’ Cup Mile. How she would do against premier European runners on the turf is problematic. It would be quite a feat if Rachel Alexandra could win this race, but trying her on the grass against top-class milers is really a roll of the dice. The distance is right, but the racing surface transition and the level of competition are formidable. However, if Asmussen knows that Rachel Alexandra has trained very well on the turf, then this might be a bold gamble worth taking…particularly at the distance of a mile.

The decision that makes the most sense from my perspective is to give Rachel Alexandra another race in early October and then decide what to do about the Ladies’ Classic. Yet the Breeders’ Cup Mile is appealing; if she could win this race, it would redeem her tarnished star.

Copyright © 2010 Horse Racing Business

ADVISORY BOARDS FOR SMALL EQUINE BUSINESSES

Reproduced by permission from The Blood-Horse

The vast majority of businesses in the Thoroughbred racing and breeding industry are privately held and many are family-owned. Most are classified by the U. S. government as “small.”

Unlike big public companies with deep pockets, small firms normally cannot afford to employ the most sought-after executives or to retain the services of preeminent professionals and technical specialists. Moreover, a proprietor or partner of a small business has fewer experts outside the firm to confer with confidentially about matters that he or she may not want to discuss with employees. Whereas the chairman of a large company has independent directors on the board to turn to, and the pick of consultants, the average small business owner does not.

Business advisory boards are popular among small businesses because they provide some of the human-resource advantages of a sizeable company and do so without the corresponding costs. An advisory board is typically comprised of four or five members, with everyone except the business owner or president coming from outside the company. A racing-related board, for example, might consist of the company owner, plus four outsiders with different skills sets, such as in finance, law, marketing, and veterinary medicine. All of the members do not need to have a background in the racing industry; one of the potential strengths of advisory boards is that people with assorted perspectives are apt to formulate superior solutions to problems. The company owner or president sets the board’s agenda and normally presides over a 3 ½-4 hour meeting on a quarterly basis.

Advisory boards can often attract people who otherwise might be reluctant to serve on a conventional corporate board of directors out of concern for legal liability. Since members of advisory boards have no official standing as directors, they are not accountable for acts of the company.

Small business owners are able to entice some surprisingly high-powered managers and professionals to serve on advisory boards for a per-meeting stipend in the range of $600-$1,000 for each member. Retired executives and currently working independent contractors are productive sources for recruitment. Thus for a total annual cost of $10,000-$16,000, or less, a company president can periodically discuss major strategic and tactical issues, in confidence, with a select group. Because board members are not beholden to the company owner and most do not need their meeting fees, they are inclined to supply candid and objective guidance.

Various companies and partnerships doing business in the racing industry could benefit from an advisory board and some already do. Board members can assist a business owner with decisions running the gamut from mundane operating matters to sensitive emotional questions of succession in family enterprises. The imperatives for board effectiveness are astute members, low turnover, regularly held meetings, and commitment of the business owner to listen with an open mind.

Copyright © 2010 Horse Racing Business