Friday, October 10, 2008

Recession & Small Time Racing

You may not believe we're in a recession, but I think we can all agree that what we are experiencing are some pretty deflating economic times. In my infinite wisdom, I decided to launch a racing stable right into the teeth of this economic train wreck. To be fair, when I first launched GRS a year ago, the outlook was considerably brighter: the Dow was at 14,000, credit was plentiful and while folks were concerned with gas prices, they knew they were getting a paycheck and just needed to save a little more.

At the time, some folks told me to go out and go at it full bore. I had one group firmly in hand and probably had enough interest to steer one - maybe two - more. Three would have been a solid launch for sure and the interest and, more importantly the money, were there. I decided, though, that I needed to learn a bit more. There is a lot to learn about owning a racehorse if you just don't want to abdicate all responsibility to the trainer. I learned how to talk to trainers in their own language; how to ask the right questions; manage vet bills; develop client communication; keep the website updated; learn to manage the book and learn racing secretaries' tendencies. Sure, I suppose I could have done this with three groups, but I think this would have been a disservice to everyone involved. It turned out to be a great year and a wonderful learning experience.

There were other changes in that year though. Disposable income started to vanish. Gas made it over $4 a gallon in some places. The Dow is struggling to stay above 8000. The little guy/gal that I appeal to has bigger fish to fry than owning a racehorse - even a small piece of one. Buying groceries, getting back and forth to work and keeping their jobs through layoff after layoff are WAY more important and the dream goes on hold.

That is how the downturn affects a small guy like me. I'm looking forward to seeing how the non-boutique meets are doing year over year. We've seen how the economic downturn has hit the sales tents. How will Belmont's fall attendance and handle be year over year? Oak Tree at Santa Anita will be skewed a bit because of the Breeder's Cup but what about the meat and potatoes meets: Remington, Hawthorne, Meadowlands, Laurel, etc. ? How are they faring this season?

All the great ideas, marketing efforts and gimmicktry in the world won't work if people can't afford to come out and play your game. Still some tracks persist on charging $5 for parking, $5 to get in and another couple of bucks for the program. Throw in the racing form and you're out $20 before you even sit down. Get smacked around by concessions to the tune of another $20 and a newbie doesn't have a prayer of walking out with any money and you've lost them for good - one and done. And forget about ever making owners out of them. They'll watch the Triple Crown on TV and that'll be it if we're lucky. A year ago maybe you could justify it (I don't think you could, not when your friendly neighborhood casino will park and admit you for free and all the while serve you free cocktails for your trouble), but now you have to fight for your place in the line for American's disposable income and you better make it a good show - and an affordable one.

Owning racehorses isn't a pasttime for the faint of heart. Nor is it for those trying to safely earn a dollar. However, judging from my 401(k)'s performance this year my horses have had a much better return!


Over at fellow TBAer Saratoga Spa's blog today he reports that the Big A will waive all admission and parking fees for the winter meet. Woohooo!


Steve Zorn said...

Amen to Ted's comments. This is a hell of a time to be trying to sell to the ordinary racing fan who might want to own a piece of a horse at an affordable price. We (Castle Village Farm) have been trying for over a month now to sell $500 and $1,000 shares in a nice NY-bred two-year-old who's already at Belmont, working toward hos debut. You can't imagine how many people respond by citing tough economic times and financial uncertainty as reasons not to go ahead right now.

One can only hope that, after a Democrat gets elected, things will return to some sanity. At least the Dems don't believe in faith-based economics (faith, that is, in the unregulated wisdom of the market).

Anonymous said...

I'd be intereted in you posting a entry on what you have learned about interacting with trainers. i have just started out in the horse ownership arena and would like to learn the right questions to ask my trainer. thx