Archives for July 2015

PITTSBURGH ART

George E. Smith, known as “Pittsburg (sic) Phil,” was a horseplayer of renowned skills.  In fact, when he died of tuberculosis in 1905, at age 43, he was legendary.  Smith led a temperate and unostentatious life, precisely the opposite style of Diamond Jim Brady, another fabled handicapper of the era.

The book “Rooney, A Sporting Life” (published 2010) demonstrates that Smith was not the only celebrated horseplayer from Pittsburgh, Pennsylvania.   Arthur J. Rooney Jr. (1901-1988) is most remembered as the founding owner of the National Football League’s Pittsburgh Steelers.  But he also had a lifelong devotion to horse racing and handicapping.

The book is replete with information and anecdotes about Rooney’s adventures at racetracks.  The authors said about Rooney:  “He loved his racing routines just as he loved to say the decades of Hail Marys around the circular strings of beads.  He based his life on the rhythms of racing, football, and Catholicism.  His year started at Florida’s tracks.  Come spring, he frequented East Coast venues.  The Kentucky Derby in May and the Belmont Stakes were annual rituals, and he usually attended the Preakness.”

When Art and his wife Kathleen or “Kass” McNulty married in 1931, they began a cross continent track-to-track journey—beginning with the Belmont Stakes and ending in Tijuana.

Particularly interesting is a chapter called “Rooney’s Ride” about how Rooney at the 1937 Saratoga meet won $300,000 ($4.95 million in 2015 dollars) from the bookmakers, followed up by huge paydays at Aqueduct.  (He did not like it at all when horse racing in the United States switched from bookmaking to pari-mutuel wagering.)  The Pittsburgh Press wrote:  “Since his big splurge at Saratoga several weeks ago, he hasn’t had a minute of peace.”  Rooney’s reputation as one of the greatest horse-racing handicappers ever was sealed.

In addition to the Steelers, Rooney and his sons owned several racetracks.  The family still owns, for example, Yonkers Raceway.

Rooney also bred Thoroughbreds at his Shamrock Farm in Maryland.  It remains in business and is owned and operated by Rooney heirs.  The farm today stands Nicanor, a full brother to Barbaro.

One of Rooney’s favorite horse-related stories was as follows.  Rooney once gave a Thoroughbred broodmare to Steelers’ Hall of Fame quarterback Terry Bradshaw.  She was in foal to Rooney’s stakes winner Christopher R.  After the mare foaled, the Louisiana-born and Quarter-Horse owning Bradshaw asked Rooney to take her back because he did not know anything about keeping Thoroughbreds and the Louisiana weather was supposedly too hot for the mare.  Rooney complied and Bradshaw traded the mare’s foal for an elite-bred Quarter Horse filly.  As fate would have it, the Thoroughbred foal Bradshaw traded went on to earn $500,000 in purses, a sum more than Bradshaw received in five years for quarterbacking the Steelers.

Art Rooney came from a working-class family on Pittsburgh’s Irish Northside, where his father was a saloon keeper and other close relatives labored in steel mills.  His friends and acquaintances included people from all walks of life—from U. S. presidents, sports figures, and entertainers to groundskeepers–and he treated them all with respect.  Byron “Whizzer” White played for the Steelers and eventually became a Justice of the U. S. Supreme Court.  One of Rooney’s close friends was Tim Mara, founder of the NFL’s New York Giants and “an established legal bookmaker.”  (Rooney Mara, the actress, is a descendant of Art Rooney and Tim Mara.)

Art Rooney handed out untold sums of cash to people down on their luck and he kept on hapless football coaches and players past their prime long after they should have been gone.  His franchise was an habitual loser until his sons began to run the football operations.  Rooney frequented places like Charles Town racetrack in West Virginia when he could have been at Royal Ascot.  We, unfortunately, may never see his likes again in this age of sport as big business.

Copyright © 2015 Horse Racing Business

NEW HORSE OWNERS VIA CROWDFUNDING?

American horse racing got a tremendous boost from American Pharoah’s Triple Crown conquest.  A lot has been said and written about how the racing enterprise can leverage the result to its benefit.

Along with stagnant pari-mutuel revenues, the other major problem racing has is that there are not enough owners and in particular owners new to the sport.  To my knowledge, crowdfunding is an untried concept in racing for attracting owners who would each have a very small investment in a racing partnership.  Eventually, some of the neophyte owners would be apt to increase their involvement in racing by investing larger sums and perhaps even becoming sole owners of horses.

The federal 2012 Jumpstart Our Business Startups law, or JOBS, removed much of the regulatory red tape from equity crowdfunding in order to allow entrepreneurs to raise up to $50 million for new ventures online.  (Currently, there are about 80 crowdfunding websites but many are inactive.)  Until June 2015, crowdfunding investments were limited by law to accredited investors (individuals with a net worth of at least $1 million or who earn over $200,000 annually.)  Now, non-accredited investors are permitted to participate in crowdfunding.

An established horse racing partnership could use crowdfunding to allow people to get their feet wet, so to speak, as owners.  For example, a partnership might offer a package of four yearlings and 2-year-olds for, say, $600,000, which would include ongoing expenses.  Because billing a plethora of owners for maintenance expenses would be cost prohibitive, the overhead would need to be built into the amount of money asked for from investors.  In addition, communication with owners would be primarily by mass email.  The goal might be to raise the $600,000 in $500 increments.

In contrast, a more attractive package to new owners might be a stable of claiming and allowance horses that would provide immediate action.

Whether crowdfunding racehorse ownership would work or not is an open question.  Considerable experimentation and pro-forma financial analysis would be required to determine the package with the best chance of attracting owners.  I’d like to see an experienced racing partnership try crowdfunding, as the process has worked well in a wide array of ventures and it just might work in horse racing.

Copyright © 2015 Horse Racing Business