Archives for June 2014

AN INCENTIVE-BASED PROPOSAL FOR A MODEST CHANGE IN THE TRIPLE CROWN

In a brief NBC television interview with California Chrome’s co-owner Steve Coburn immediately following the 2014 Belmont Stakes, Coburn opined that it was unfair for horse owners to pick and choose among the Triple Crown races for their charges.  Tonalist and Commissioner, for example, the winner and runner-up in the Belmont did not race in either the Kentucky Derby or the Preakness.  Although Coburn later apologized for his outburst against the Triple Crown system and his comments about other owners, scientific polls conducted among the public after the race found that the vast majority of people agree with Coburn.

Suggestions that owners be required to run their horses in all three Triple Crown races are impractical and ill-advised.  Owners who care about their horses run them when the trainer says they are ready.  Man o’ War’s owner bypassed the Kentucky Derby, as he thought the distance was too much to ask of a 3-year-old colt so early in the year.

Moreover, if such a mandatory “start-in-all-three-races” rule were installed, the Kentucky Derby would have its usual large field and the Preakness and Belmont would most likely have sparse fields.  No one wants to see the second and third jewels of the Triple Crown with short fields.

Many well-meaning people have recommended reasonable changes in the Triple Crown; for instance, allocating more time between races or changing the distances.  Contrary to widespread opinion, these are not inconsistent with Triple Crown tradition.   The races have been run in different sequences, at varying distances, and with longer and shorter intervals between races.

I don’t have an earth-shaking change to offer, but do have a modest proposition based on my long-held preference for addressing problems and issues with easily understandable incentives rather than prohibitions and inflexible rules.  Rewarding desired behavior with attractive incentives gets more of it.

Simply put, if a horse races in the Kentucky Derby, he receives a five-pound weight allowance in the Preakness.  Colts who started in the Kentucky Derby at 126 pounds would then carry 121 pounds in the Preakness (fillies 116 pounds).  Horses that competed in both the Kentucky Derby and the Preakness would receive an additional five-pound weight allowance in the Belmont and carry 116 pounds (fillies 111 pounds).  If a colt raced in the Kentucky Derby and skipped the Preakness to race in the Belmont, his weight assignment in the Belmont would be 121 pounds (fillies 116 pounds).  A colt that skipped the Kentucky Derby but ran in the Preakness and Belmont would carry 126 and 121 pounds, respectively.  Finally, a colt that skipped both the Kentucky Derby and the Preakness, such as Tonalist, would carry 126 pounds in the Belmont whereas a California Chrome, who contested all three Triple Crown races, would run with 116 pounds.

Any kind of change to the Triple Crown format would require the cooperation of all three racetracks.  That is unlikely in the largely dysfunctional business of racetrack management.

Copyright © 2014 Horse Racing Business

CANTERBURY PARK HOLDING COMPANY

Canterbury Park Holding Company (CPHC) offers pari-mutuel wagering and card games at its Canterbury Park Racetrack and Casino in Shakopee, Minnesota, near Minneapolis-Saint Paul.  The metro area includes 2.2 million residents over 18 years of age.

Net revenues in 2013 were $46.7 million compared to $45.5 in 2012.  Card games accounted for 54.4%, wagering on horse racing for 23.8%, and concessions for 13.8%.  Net income in 2013 was just over $1 million, about the same as in 2012.  CHPC stock, traded on Nasdaq, rose by 5.1% in 2013.

CPHC held 69 days of live racing in 2013 from mid-May through mid-September.  Twenty days were devoted exclusively to Thoroughbred racing and 49 days were a mixture of Thoroughbred and Quarter Horse racing.  Although Minnesota law requires a minimum of 125 days of live racing per year, the requirement can be waived if the Minnesota HBPA agrees to do so.   Since 1995, the MHBPA has consented to CPHC holding a live meet of at least 50 days annually.

Minnesota law mandates that CPHC pay 10% of the first $6 million of gross card revenues to purses on live races.  Beyond the $6 million threshold, the required distribution to purses escalates to 14% of gross card revenues.  Ten percent of purse funds are set aside for the Minnesota Breeders’ Fund with the remaining 90% divided between Thoroughbred races and Quarter Horse races.  Thoroughbred purse funds receive 90% and Quarter Horse purse funds get 10%.

CPHC operates under an agreement (signed in 2012) with the Shakopee Mdewakanton Sioux Community (SMSC) in which the SMSC is to provide $75 million in purse supplements over a 10 ½ year term to live racing and an additional $8.5 million to CPHC for joint marketing efforts.  In return, CPHC granted certain stock rights to SMSC and agreed that it would not lobby the Minnesota legislature for expanded gambling authority and will support SMSC’s efforts to stop expanded gambling.   In 2014, the purse enhancements will total $5.84 million with the yearly amount rising to $8 million by 2018.

A version of this analysis appeared in the Blood-Horse.  Copyright ©2014 Blood-Horse Publications.  Used with permission.

THE BEST 3-YEAR-OLD STALLION PROSPECT ON THE PLANET IS RUNNING SATURDAY

Start out with Ouija Board, one of the best race mares in modern history with a sterling pedigree to match.  Breed her to the widely recognized premier sire in the world, Galileo, a son of the sensational sire Sadler’s Wells and grandson of the great sire Northern Dancer, who 50 years ago won the Kentucky Derby and Preakness but came up short in the Belmont.

The result of this mating is Australia, the favorite for the June 7th Epsom Derby.

Australia’s trainer, Aidan O’Brien, has won the Epsom Derby four times, including with Galileo.  This year he has four entries in the race, but says of Australia:

“He’s a Derby horse we’ve not had the like of before.   I thought Camelot was the best horse we had for the Derby, but this horse is another step up.   I’ve never had a horse like this.   I’m not trying to blow him up, I’m just saying how it is.”

That’s quite a statement coming from the circumspect O’Brien, who trained Giants’ Causeway and many other champions, especially the part about “I’ve never had a horse like this.”

Australia’s dam, Ouija Board, won, among other races, the English Oaks, the Irish Oaks, the Breeders’ Cup Filly and Mare Turf (twice), and the Hong Kong Vase.  She was European Horse of the Year in 2004 and 2006.  Her earnings were equivalent to $6.4 million (US dollars)

Galileo won the Epsom Derby and the Irish Derby and was the European champion 3-year-old.  His earnings were $2.21 million (US).  Galileo is the five-times leading sire in Great Britain and Ireland.

Australia comes into the Epsom Derby off four lifetime starts, with two wins.  He finished third in the 2000 Guineas in early May, a result that O’Brien attributes to the colt missing training from illness and a cough.  O’Brien says Australia is ready for the 1 ½ mile route in the Epsom Derby.

Australia’s impeccable breeding will ensure him a place in the illustrious stallion roster at Coolmore in Ireland.  Should he win the Epsom Derby, the demand from mare owners to breed to this genetic masterpiece will be buoyant.  Expect a steep stud fee and high expectations for his offspring.

Copyright ©2014 Horse Racing Business