Archives for August 2015

When I make my annual August visit to Saratoga Springs, my preference is always to spend part of the days at the racetrack or downtown mingling among the crowds in order to observe the festivities and soak up the sights and sounds.  Occasionally, I’ll chat with strangers.  These conversations illustrate the diversity of people who make up the compelling fabric of the venerable race course and its surrounding environs.

Here are a few examples.

Several weeks ago, NYRA held a two-day handicapping contest.  Two rough-hewn former iron workers from Connecticut and their wives were staying at the same motel as me.   One of them was in a wheelchair and missing a leg.  After the first day of the NYRA contest, the fellows were upbeat and optimistic about their chances of taking home some of the prize money.   Later, on the night of the second day of the contest, I encountered one of their wives and inquired how the guys had fared.  She said “Don’t Ask, they had lots of seconds.”  The last I saw, the disappointed handicappers were quietly packing their car for the trip home.

About two years ago at the racetrack, on the green benches in front of a restaurant located on the ground floor of the clubhouse, I talked with a divorced father and his teenage son from Philadelphia.  Every summer the pair spend a week visiting various sporting events on the son’s bucket list, such as a Major League Baseball game or a National Football League preseason game.  This particular day, the son, an avid soccer player, chose the races at Saratoga.  The night before, they had been at a Buffalo Bills game in Buffalo.  The father said he had spent many a day at Philadelphia Park (now PARX) and the visit to Saratoga was his first encounter with top-level racing.

Five years ago, just outside the racetrack structure in the grandstand section, I met a fellow in his mid-to-upper sixties sitting in a lawn chair handicapping the races.  He told me he lived in Rochester, New York, where he was the founder and CEO of a medical device company.  He comes to Saratoga for the races for a couple of days every summer and, though he could have afforded a clubhouse seat, he said he preferred the lawn chair and watching every race on a television monitor.  The men with him were all executives of some sort.

This year, I was resting on a park bench outside the clubhouse, in the back, and had a conversation with a forty-something woman from Garden City on Long Island, who was sitting next to me smoking an electronic cigarette.  She said she was attending the races with her father and mother and three children, ages 13 to 20, who were at a table in one of the clubhouse restaurants.  One of the kids kept calling her on her cellphone to find out what horse to bet on.  Over the course of some 15 minutes, she told me, a total stranger, of how her alcoholic husband had deserted the family three years ago, leaving her to sell the family business and raise the children.  Coming to the races at Saratoga was part of the healing process for the family,

Once, I was standing on the ground floor of the clubhouse near the Jim Dandy bar watching a TV monitor when a well-spoken man in his late sixties or early seventies struck up a dialogue.  His main topic was racing integrity, and he advised me to stick to betting on Thoroughbred races, rather than harness races, because, in his view, Thoroughbred races are more honestly run.  The source of this information was his long-ago acquaintance, a New York City tailor, whose customers included a number of both Thoroughbred and harness trainers.  The tailor reportedly opined that his harness-trainer customers spent a lot more for custom-made suits than his Thoroughbred-trainer clientele, allegedly because they made so much money from betting on fixed races.  Now that was convincing, wasn’t it?

These aren’t the typical faces we see on television at Saratoga Race Course.  They aren’t the faces of owners, trainers, television personalities, or celebrities, but they are the faces of a few of the anonymous masses who have enabled Saratoga Race Course to continue on year after year ever since 1863.

Experiences meeting these types of folks are part of the allure of Saratoga… and can’t be had sitting in a clubhouse box.

Copyright © 2015 Horse Racing Business

As with any institution that is highly selective in extending membership invitations, the American Jockey Club has its share of detractors.  The typical criticism is that the Jockey Club is a calcified organization run by men of great inherited wealth who are trying—to the detriment of horse racing and breeding—to control the sport.

This allegation, however, is patently not supported by an objective examination of the facts.

A cursory review of the Jockey Club membership roll reveals that many of the members have had unusual success as largely self-made business people and entrepreneurs outside the realm of horse racing.  Any organization that includes as members, for instance, the founder and chairman of a Fortune 500 company and the retired chairman and CEO of a Fortune 500 firm has some very knowledgeable human resources to draw upon.

The assertion that the organization is an exclusive club for men of bequeathed wealth is a canard, as evidenced by members who, for example, come from the workaday occupations of jockeys, trainers, racetrack executives, auction employees, and veterinarians.  Many members of the Jockey Club worked their way up in life from modest economic circumstances and some members don’t have college degrees, much less prestigious educational pedigrees.  In addition, the “old boys bastion” pejorative is disproved by the inclusion of 15 female members.

Under the leadership and strategic guidance of recently retired chairman Ogden Mills Phipps, current chairman Stuart Janney, and president and COO James Gagliano, the Jockey Club has hired demonstrably capable executives and staff and occasionally retained premier consultants like McKinsey & Company to assess specific issues.  In turn, these individuals have crafted and implemented initiatives that have discernibly advanced the sport/business of horse racing.

Four important items on the 2015 Jockey Club Roundtable (held August 9) agenda were illustrative

Fan development:  One of the horse racing industry’s main tasks is to cultivate a larger fan base and in particular a younger demographic.  This topic was addressed by Jason Wilson, president of TJC Media Ventures, and Penelope Miller, the Jockey Club’s Senior Manager for Digital Media.  The overriding goal is to employ “multi-media strategy that involves traditional media outlets, television, and mobile technologies as well as social and digital media to introduce new and casual fans to…horse racing.”  This strategy is implemented mostly under the “America’s Best Racing” brand.

Product enhancement:  College and professional sports like football and baseball have zealously adopted predictive analytics, which succinctly means using statistical techniques to sort through masses of data in an attempt to discover meaningful and actionable relationships (the book and movie “Moneyball” pertained to how predictive analytics were pioneered by Major League Baseball’s Oakland Athletics.)  The Jockey Club has entered into an agreement with a company called STATS to develop predictive analytics for horse racing, which would have great appeal to handicappers.

Thoroughbred safety:  While there has been considerable progress in recent years in reducing the number of racehorse breakdowns, there is much improvement to be made.  Not only is safety of jockeys and horses imperative, but fewer breakdowns are essential for fan development.  The Jockey Club Injury Database is critical to this effort because it allows for quantitative measurements of progress.

Racing integrity:  Through its membership in the Coalition for Horse Racing Integrity, the Jockey Club is advocating for federal legislation (i.e., H.R. 3084, Thoroughbred Horseracing Integrity Act of 2015) to mandate uniform medication rules across the United States and to deputize the United States Anti-Doping Agency to oversee drug policy and testing in horse racing, just as it does for “athletes in U.S. Olympic, Paralympic, Pan American, and Parapan American Sport, including all Olympic sport national governing bodies, their athletes, and events throughout the year.”

Based on my varied experiences as a long-time business-school professor, researcher/author, consultant to companies of all sizes and lines of enterprise, and corporate director, I strongly believe that without such proactive Jockey Club involvement over the last several decades, American horse racing would have suffered economically far more than it has in the face of vigorous competition for the entertainment and gambling dollar.

While the Jockey Club does not have the power of a league commission, it is making a difference where it can…and that is a reason for optimism about horse racing’s future as a sport/business.

Copyright © 2015 Horse Racing Business

For the record, I have no business relationship with the American Jockey Club or any of its members.

On a recent evening I went to a presentation by Wes Cowen, who is one of the appraisers appearing on the popular public television program “Antiques Roadshow.”   He said that the primary motivation of viewers who tune in to the show is to see if someone who brings in an antique for appraisal has a valuable piece.  Maybe someone found a gem of an antique stored in the attic for years or bought it for a pittance at a flea market.

In the question-and-answer session that followed the presentation, Cowen was asked how to dispose of items collected over the years that the children don’t want.  He agreed that today’s younger generations generally don’t want to inherit their parents’ antiques and heirlooms.  Cowen lamented that a person under thirty-five years old at an antique auction stands out from the crowd.

Cowen stated that antique dealers at one time referred to “the best and the rest,” meaning that there was a demand for premium merchandise but not much demand for the vast majority of merchandise.  Now, he says, reference is made to “the very best and the rest”:  buyers have become even more selective.  The Internet has contributed to this trend, as buyers can easily determine if an item is rare and its value.

The “very best and the rest” nomenclature seems like an apt description for present-day horse racing.  The racetracks that are doing well are the very best in terms of the ambiance and quality of racing they offer to customers, while most of the rest are struggling.

At the auctions, the very best–athletic-looking horses with strong pedigrees–sell for hefty prices, whereas the rest typically don’t fetch such good prices.   Of course, just as there is always the remote chance that someone buys, say, a valuable painting at a flea market, the purchase of an unfashionably bred yearling with a few conformation faults may turn out to be a great bargain.  But that is the exception that proves the rule.

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Like a lot of people with grown children, I’ve got to figure out what to do with all the stuff stored in my basement.  Habitat for Humanity and Good Will are the likely options for items that have been in the family for years.

Copyright © 2015 Horse Racing Business