Friday, May 9, 2008

PWMNBN - Will it Never End?

For those of you that follow this Blog (and God bless both of you), you know that I have had some interesting dealings with a partnership I was involved in based in California. It was my first foray into horse ownership and, since the passing of it's founding partner, has been a blueprint for me on exactly how NOT to conduct business.

Sadly, circumstances have forced me to do something that I never thought I would ever have to do - file a complaint with the Stewards. After some debate on where was the money owed to the partners, this was a piece, and I swear it was right off the message board for this partnership:

"Do you want to hear their will be no monies till this is all done well you heard it. We received zero dollars from [deceased managing partner] to pay these partnerships out. Nothing will be paid out until [we] have our line of credit. I don' have an exact date or time when that will be. Believe me the first thing I want is to get you guys out of our hair."

Hard as it is to believe, the last line was edited out about an hour or so after it was posted. Here is what is funny about this statement - outside of the obvious: after the managing partner died, these bozos claimed two horses that failed miserably and ate up about 60% of the money that had been compiled in the group. How in the world did they 'receive zero dollars' yet were able to spend the money for the horses? He finished up by deleting my posts questioning his integrity (every right for him to do it, it's his board after all) and then banning me from the board. Prior to my banning, though, he called me out specifically on a post asking me why I never want to call him to discuss issues, why I never respond to his e-mails and that I'm part of the problem. I guess to the folks reading, he told me as I never was able to respond. Of course I always responded to his e-mails - in one I even outlined why I don't respond to his request for a phone conversation:

"Because you have no honesty and integrity."

Now no one wants to hear that, I'm sure. But if you recall a previous posting in which I outlined my issues with the group, right after the managing partner died our two successful horses were claimed and I was told - as were others in the group - that no further claims would be made until the financial details were sorted out. We then found out that even as he told us this, he was dropping claim slips left and right. At that point I knew that we were dealing with a much different person than the gentleman I contracted with. That fall the new MP also decided to unilaterally void any contracts that didn't have any recurring fees because they were losing money on them. When pressed as to the legality, he told everyone, basically, tough. It turned out not to matter in our case as our last horse was claimed away on January 31, 2008 - before ALL the money ran out. But it does leave you wondering what kind of people you're dealing with.

As I write, it has been 99 days since this group has 'closed' and no one has seen a dime. Only the vague promise of a line of credit occurring sometime in the future. It needs to be said that in this partnership meeting in the fall of 2007 the new MP told everyone that he was in the process of applying for a line of credit then. How long does this process take or are we just being fed, watered and kept in the dark? IF you really were applying in September and by May you still don't have one - I think we're screwed. It's not the money that's my concern - it's the fact that as groups close and they they cannot pay them out (we're not the only group, another friend of mine has a group 'closed' since SEPTEMBER 07 and hasn't seen a dime either) they continue to market new partnerships and collect fees from others. One gentleman contacted the new MP and finally told him, - look, you guys can't close groups and I will just be forfeiting my shares back to you all and moving on. The MP had the nerve to try and guilt him into 'living up to his obligations'!! Seriously...

All this makes me want to scream. It never had to get this far. If you inherited a financial mess, then say so up front and we can all work together. If you bought the business knowing it had financial issues (and it appears they did), how is that the partner's fault? It seems like they just figured, well we'll just stick it to the partners and make it back. No one has invested much money, who's going to complain? I will - because it's wrong. Hey, we all know that this is horse racing and that if a horse you claim turns south on you it's easy to lose everything. As long as everyone is doing their best for the group - the managing partner, the trainer, the jockey and is upfront and honest, we accept that risk and hope we can get some pictures on the wall and have some fun. But to hide behind the fun and inherent risk of racing in order to scam people and take their money and use it as an excuse to not be upfront and honest is just wrong and needs to be ferreted out of our industry.


PEM said...

Man-I thought I had issues! If I were in your shoes I would probably be content to know I'd never see a nickle of that money--I'd say "Great-we're even--just get my name the hell out of the partnership!".

Gotta admit I'm somewhat curious to see how you got involved with these guys. Was it an ad somewhere-or was it a group recommended to you? Rest assured any future partnerships I'm involved in will be 100% in my control-and I'm still friendly with the people I'm involved with-despite some earlier heartburn with them. That being said-while I have truly enjoyed it-and it opened the door to me to a business I've always been fascinated with (and we've been damned lucky to boot)I would never do it again. That could be my personality as much as any other factor (own my own small construction company-so I call all my own shots) or it could be just common sense. Simple fact-whenever you put a group together-there will be disagreements about what track/what level/what distance and unfortunately, when you try to keep EVERYBODY happy you'll never have the horse at the level he can win.

I wish you well in your position as Managing Partner in your group. I think (and you probably have learned in your own business life) that you'll never make everyone happy-but unless there is some sort of boss-right or wrong-something happens. No boss= no direction= nothing will ever get done. I hope you never find yourself deciding on what race or what distance or what price "by committee" because you wind up running 3rd or worse every time. If people in your group are "afraid we'll lose him" then they don't understand the business.

Anyway-while I'm sure you love to see the operators out in California strung up by their collective cojones-I have to imagine you're fighting a losing battle 2000 miles away from them. Best to cut your losses and get away from them.

Ted G said...

PEM - I wrote off the money long ago. It's actually not that much, but now it's all about principle.

I found this group doing research on-line and by talking to people. I actually had a couple of conversations with the late MP before writing a check and, to be fair, it was wonderful when he was in charge. After his passing is when things went to hell in a handbasket.

It's tough to be part of a group when you're used to being in charge, but if you can trust the team the MP has set up, then hopefully you can be comfortable with your investment.

While we all know the risks involved, let's face it, we all want to make money and that should be our goal. Part of that is running horses where they belong and gunning for wins. Would I be disappointed to lose Fizzy at $16,000 - yes I would. But we bought him for $10,000 and if we won a race or two along the way, how can you not consider the group a success?

PEM said...

No--I can see a lot of positives about being in a group. First and foremost-you limit your risk. I think secondly-unless I get 6 numbers right on Saturday night-I don't think I'll ever have deep enough pockets to be able to land an allowance/stakes type horse. BUT as a businessman--I would not/could not throw good money after bad. Shipping a cheap horse halfway across a continent hoping he'll find the surface to his liking (or they run turf cheap enough)is NOT a good business move. I guess I'm still pretty bitter about vanning bills up and down I-95 trying to put a bottom-level maiden into the winner's circle and your can tell it by my tone. Then again-while I wasn't completely for all these moves I can't honestly say I had my heels dug in against them.

As far as making money? If you break even you'd be better off than probably 95% of the people in the business! I do think it can be done-but the moves made have to be thought out, lots of sneaky espionage has to happen, you better have some real honest horsemen on your side ("Honest" and "Horsemen" rarely used in the same sentence-but you do have a good one)and you better be saying a rosary about 12 hours a day.

Then again-when your first winner crosses the wire and the steps on the stairs actually seem to come up to your feet as you run down them-and old men tell a 46 year old bald-headed man "nice horse-kid!" you can't beat that feeling-ever!

You should give me your fax # and I'd send you something you should frame over your desk-just as I have done. Probably a good point of reference for your entire group.

Ted G said...

If you're going to ship, you have to ship smart, no question. We are very fortunate to have Bernell Rhone as our trainer and a friend like David Miller to bounce ideas off of. While I acknowledge that it is difficult to make money, it's still our goal. I know too many people that don't approach it like a business and make silly decisions. I can't, and won't, promise our partners that we'll make money, but I can promise that it's what we are shooting for.

PEM said...

Yeah I think you guys took a horse at Tampa that should be profitable there. Of course-like anything-if after a couple of races you find yourself a well beaten 3rd or worse you know what you have to do. It's the thorny problem of "but we might lose him" that keeps a whole lot more people from getting their pictures taken. And this is the exact point where the leader has to take the risk, whether popular or not- to drop a horse where he needs to be. Lot of people are unwilling to be the "bad guy" and they just accept the 3rds hoping the win is just around the corner, and slowly bleed the coffers dry.

Anyway Ted you seem to have a whole lot more realistic that most of the owners/partnerships I know of. I have a pretty good feeling for you guys.