The car industry has seen a remarkable shift over the last decade. In the shadow of the recession and the automotive bailout, no investors or companies would have dared to invest in electric cars. No one understood to be sane, that is. Elon Musk never cared for sane. He poured his PayPal buyout money and his voracious attention into a fledgling start-up that, unbeknownst to anyone, was poised to revolutionize the world. Now, a decade later, everyone is chasing the electric car. Volkswagen, the German auto manufacturer that makes the luxury car Audi, was not paying attention at first. When the sales growth of Audi declined from a 15% market share growth in 2009 to a -0.74% growth in 2018, they knew they needed to make a change. So, in 2019, they brought in Dirk Hilgenberg, a BMW executive and IT specialist whose focus would be developing an electric vehicle that could rival the cultural impact of Tesla.When asked about his biggest obstacle, Hilgenberg replied, “The biggest challenge, it is the mindset of the people–their reluctance to embrace radical change until circumstances force them to.”
…until circumstances force them to. I think about that line a lot, especially considering the state of our industry. It’s no secret that the prestige of Thoroughbred racing is in decline, let alone the business itself. I ask myself, how could one of the oldest sports in America, that once held an eminence similar to baseball and boxing, have fallen so low? Especially now, with the national consciousness of sports betting at an all-time high, there is no reason that the trailblazing sport of this industry should be left behind. Unless it is unable to adapt.
Last Saturday morning, I was driving out to Santa Anita when I received the 10:30am rundown text with the entries for the upcoming Friday card. What I saw was appalling: nine races on the books, and a grand total of 29 horses entered, an average of 3.2 horses per race. Only one of these races had four entries, which was a maiden claiming on the turf. Even the extras, which had a total of 27 horses entered for six races, only had three races with more than three horses entered.
Wow. After all this time, we could barely muster a competitive field to race. All I felt was sadness, a vague emptiness that seemed to mirror the track. And this sadness soon turned into anger. How in the hell did we get here? It’s easy to cast blame, and lord knows there’s plenty to go around, but I’m tired of people who blame without providing solutions. Now is the time to act.
In deliberating the actions required, I thought back to an op-ed written by the late Tim Osterman. In late 2012, he wrote about the potential for greater cooperation between the Northern California and Southern California racing industries. A few months later, Craig Bernick of Glen Hill Farm picked up the mantle and talked about the same concept. I will never forget his lead quote from that article: “At times when change is imminent, timid responses too often become in retrospect stopgap measures, while bold responses can lay a strong foundation for a bright and sustainable future.” Truer words have not been spoken. Craig wrote another op-ed on the same topic two years later.
The idea behind the proposal is this: we currently have two circuits in California, one in the north and one in the south, of which each flagship track, Santa Anita and Golden Gate, is owned by the Stronach Group. And yet, they’re operating competing racing dates against each other. Why? And to add insult to injury, we’re running more races with shorter fields, while the handles for these races are not keeping up. We only have to look at this week’s events for the proof.
This weekend, the racing world turns its eyes toward Preakness, the middle jewel of the Triple Crown that stands alongside the Kentucky Derby and Belmont Stakes. In Southern California, we have concurrent races that echo this great day. But again, field sizes are waning.
Twenty years ago, in 2002, races held at the now-defunct Hollywood Park dwarfed the current fields, running 83 horses in only 9 races, and brought in a handle of over $19 million. Ten years later, in 2012, there were 86 horses spread out over 11 races, which had a handle of a little over $13 million. Today, at Santa Anita, we have a paltry 59 horses in total for 10 races. What is the handle going to be there? You see the problem, don’t you? Running an average of six horses per race will not generate the excitement or the betting power like that of broader fields, for instance, the one in 2002. When we have bigger fields, it creates a bigger handle, and focusing on a concentration of talent is the only way to yield the kinds of results we once took for granted. Quality, not quantity, is our path to greater success.
Golden Gate, also running this week, has fared only mildly better, with 62 horses in 9 races scheduled for Saturday, while the track runs three days in the week. Ten years earlier, there had been a field of 75 horses in 9 races on Preakness day, while the track was running four days a week, which had already been cut from five days a decade before that. Are we going to continue to let field sizes dwindle? Let the days run out? Soon, Golden Gate will be at two days a week with low seven-digit handles, while we stand here navel-gazing as if the future of our sport isn’t collapsing, slowly and inexorably, into the dust.
Why are these tracks, which are owned by the same company, competing with themselves by racing with shallow fields that are destined to create middling results for both? Does a linebacker tackle his own defensive end? We should only be running one track at a time, pooling those resources into a “super circuit” that can excite fans and attract more people to the races, especially in Northern California, where the handles are typically smaller. This “super circuit” would not only alternate dates between the tracks, but generate full fields and exciting races despite the decline in horse population. It’s exactly the way we used to operate, a half-century ago, in the heyday of thoroughbred racing.
What are our other options; letting Golden Gate continue to rundown until it’s sold off or closed? Are we just going to throw in the towel? Absolutely not. We have a track in one of the most innovative parts of the world. The bay area is filled with successful companies and brilliant people who have made tremendous amounts of money. How is that money, and that community of young and vibrant entrepreneurs, not showing up to the track? How do we not have a call center focused on selling packages to tech companies, the way virtually all other major sports teams are? They have large professionally trained sales teams calling these companies to entice their people to the stadiums, to buy tickets and throw parties. I will lay this idea out more fully in a later op-ed, but suffice it to say, we now find ourselves in the situation of VW, staring down the barrel of the future. Now is the time to adapt. We must change our mindsets and embrace radical change.
There are tremendous people at the Stronach Group; Matt Dinerman and David Duggan in the north, and Nate Newby, Tom Quigley, & Millie Ball in the south. They have a dedication and a passion for the sport that is unrivaled. I see it displayed by them at the track and I see it on Twitter, the deep love for our culture that courses through their veins. But in their positions, they are only able to effect so much change. To Craig Fravel, Aidan Butler, and Belinda Stronach: have you given up on creating the on-track attendance experience? Have we stopped trying to attain a new fanbase?
I understand that the methods I’ve laid out are a bit unorthodox, but look where orthodoxy has brought us? One thing I’ve learned from working as an executive in startup companies, learning from brilliant CEOs who grew companies from nothing that were acquired for hundreds of millions of dollars, is a willingness to expand the concept. In doing this, we have a method for the testing of free ideas. When a potential new strategy or solution is provided, the group must come up with three ideas about why it will work before we can talk about why it won’t. In this way, it tests the strengths of the argument, and stays our natural tendency to critique without solution. I am confident that the solutions provided here, as well as the ones we propose in the future, will hold up to these standards.
We find ourselves at a crossroads. We cannot undo the time in which we failed to act, but we can act with the knowledge of what inaction will bring. The question we now face is simple: are we going to act?
PART 2 of State of Emergency is coming on 6-10, and the horsemen will be sure to commit me to an institution after they read that one. Here’s to the future of racing!