Archives for January 2019

On last Saturday’s telecast of Pegasus World Cup Day from Gulfstream Park, Belinda Stronach, chairwoman and CEO of The Stronach Group, which owns the racetrack, adeptly served as host by providing an on-air television interview and graciously presenting trophies to winning owners. However, all is not well in the Stronach family, as daughter Belinda and her father Frank are embroiled in lawsuits against one another, with bitterness apparent in the allegations made in the filings.

As a young man, Austrian Frank Stronach immigrated to Canada, virtually penniless, but proceeded to start and build what is today Magna International, the largest North American parts manufacturer for the automobile industry. He used some of his hard-earned wealth to launch and build a horse-racing empire that encompasses breeding and racing, Xpressbet, and racetracks–most notably Gulfstream Park and Santa Anita–under the banner of the privately-held The Stronach Group.

In October 2018, 86-year-old Frank Stronach sued his daughter Belinda, one of her business associates, and two of his own grandchildren, who are trustees of The Stronach Group, for mismanaging the company’s assets and constraining his control. In January 2019, Belinda Stronach countersued, asserting that her father undertook “idiosyncratic and often unprofitable projects.”  She referred to his “declining mental state.”

Intra-family quarrels over business dealings are commonplace. For example, high-profile disputes include Tory and (former husband) Chris Burch, the Gucci family, the Koch family, and daughter Shari Redstone versus her 95-year-old media-magnate father, Sumner Redstone. George Strawbridge, a prominent racehorse owner and Campbell Soup heir, recently partnered with an activist investment firm to fight some of his own cousins over board seats and who should lead the underperforming company.

Without knowing the veracity of the claims made in the Stronach lawsuits, it is not possible to say whether Belinda Stronach or her father Frank has the most facts on their side. It comes down to whether daughter is truly trying to protect a father with diminished mental acuity and the businesses he built or whether she is engaged in a raw power play.

Cal Turner Jr., former chairman and CEO of Dollar General, described in his book “My Father’s Business” the hurt he experienced when he fired his father, who co-founded Dollar General, and his younger brother from the company. For most people, it would be painful, to say the least, and leave a mental wound that would never go away. The Stronachs are likely feeling similar anguish and regret.

There is an element of truth to the old adage about never doing business with friends or family.

Copyright © 2019 Horse Racing Business

A few weeks back, I got an email from an art gallery that had an old black-and-white picture of a long-ago racetrack and wanted help identifying it. The gallery believed the track had been located somewhere in Kentucky. The picture is shown below. 

Looking at the picture and seeing only men in coats, ties, and hats, I immediately thought of a defunct racetrack in Louisville that would be of the right vintage. It offered Thoroughbred pari-mutuel racing from 1913-1918 and served as a training facility into the 1950s.

I am not certain, but I believe it to be the racetrack pictured in the link below. Notice the location of the judges stand in both pictures.

https://explorekyhistory.ky.gov/items/show/320

Let me hear from you if you know for sure the name and venue of the racetrack.

Copyright © 2019 Horse Racing Business

About ten years ago, I was at a Fasig-Tipton select yearling sale in Saratoga Springs, New York, and heard a bloodstock agent advise his client that if the client was “only” going to spend up to $300,000 for a yearling that he would not get one of the better prospects. I wondered about the rationale for such a statement, especially in light of the fact that some of the greatest racehorses of all time either sold for low prices or went unsold because they did not reach a minimum reserve price. This lengthy list would include Northern Dancer, Seattle Slew, Sunday Silence, and American Pharoah. The agent was suggesting that bloodstock selection is more scientific than it really is in practice.

I recalled this encounter and thought about the obvious difficulty of projecting athletic prowess while watching the 2019 overtime NFL playoff game between the Kansas City Chiefs and the New England Patriots, with the winner heading to the Super Bowl. New England’s narrow victory was largely due to a few players who excelled with the game on the line. Besides arguably the greatest professional quarterback of all time, Tom Brady, crucial plays in the waning minutes of the game and the overtime were made by Chris Hogan, Julian Edelman, and James White. 

None of them were coveted players coming out of college. Brady was a 6^th round NFL draft pick out of the University of Michigan. Hogan was a “slow” receiver who went undrafted out of Monmouth College. Edelman, 5 feet 10 inches, was a round 7 pick in the draft, a college quarterback out of Kent State University. White, the same height as Edelman, was drafted in round 4. 

These once-unheralded players were coached by Bill Belichick, who played football at tiny Wesleyan College, never in the NFL, and got his start in the NFL as a $25 per week intern. Similarly, New England Patriot offensive coordinator Josh McDaniel played at John Carroll University and, like Belichick, never in the NFL.

Picking out yearlings with racing potential is even more difficult than drafting players for the NFL. The players have a track record in college whereas the yearlings have never run a race. Most yearlings that sell at auction for seven figures will fleetingly get media attention but will ultimately fail to live up to their lofty prices. By contrast, equine equivalents of Brady, Edelman, Hogan, and White will dominate.

If a bloodstock agent told me he or she could not find a promising yearling for $300K, I would look for another agent, a bloodstock agent with Belichick-like insight, who has a knack for finding overlooked talent despite perenially drafting at the bottom of the NFL draft.

Copyright © 2019 Horse Racing Business