Thursday, February 19, 2009

What racing must do

The news that Magna is likely to be forced into bankruptcy within the next few months hardly comes as a surprise. Like so many financial ventures of the last 35 years, Magna's business plan—to the extent they can be described as actually having had a viable business plan (hint: not much)--hinged on leveraging assets and growth. Magna certainly leveraged the assets. They did not get the growth.

Magna apparently perceived expansion as the route to growth, buying up racetracks in an early frenzy of acquisition. Most often, it seemed, they acquired those assets without any clear idea of how to make a profit from them—acquisition for acquisition's sake. But Magna's ideas of how to profit from their racetracks were always fuzzy, even for Santa Anita, their original, flagship property. Frank Stronach reportedly believed in some kind of synergy between women shopping for Gucci bags and wagering on horse races.......Huh? I don't get that....never did....never will.

Of course that glib dismissal is unfair to Stronach on some level. At least he was trying something, which was more than one could say about most other racetrack owners, who seemed clueless about how to save their dying businesses. They still do. Casinos are a temporary patch, a parasite that will eventually eat the host. What other ideas to save racing have you heard lately?

In too many ways, Thoroughbred racing does not fit that well with the modern American lifestyle. The few racetracks that are really successful—Del Mar, Keeneland, Saratoga—are the ones capable of presenting truly boutique-quality racing in a uniquely attractive setting. All three of those racetracks are such uniquely attractive physical sites that people enjoy visiting them, simply for their beauty, even when there are no horses.

Sure, racing can contract, breed fewer foals, run fewer races, and possibly have a better chance of ultimate survival, but the truth is that there are always going to be far more bad to moderate racehorses than there are good ones. Horses that deserve to run in the big events, the only events of just about any type of sport that the public at large find interesting, worth watching, and betting on, will always be few and far between for any breeder, any owner, any trainer, any jockey.

And yet, that is what Thoroughbred racing and breeding must do—find a way to make those few horses, those few big events pay for all the rest.

Any ideas?

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