Archive for Frank Stronach

Frank Stronach, Despite Negative Opinions, Brings A Lot To Horse Racing

This week’s LET IT RIDE.COM HOT TOPIC comes from Bill Shanklin of HorseRacingBusiness.com…take a read and VOICE AN OPINION!

WHY FRANK STRONACH IS GOOD FOR RACING

The Austrian-born Canadian entrepreneur Frank Stronach is a real-life Horatio Alger success story. Coincidentally, Alger’s first book was titled Frank’s Campaign.

Stronach is well-known in worldwide business circles and the mere mention of his name can provoke controversy. Depending on who is doing the evaluating, opinions about Stronach’s contributions to Thoroughbred racing can be as different as night and day. One might wonder: “Are you sure we’re talking about the same person?”

Most notable on the plus side, Stronach has built a hugely successful breeding and racing empire. His Adena Springs has won the Eclipse Award as champion breeder in the United States seven times since 2000. Additionally, Stronach was the leading owner in 1998, 1999, 2000, and 2008 and his homebreds have won classics and sired classic winners.

Negative opinions about Stronach’s efforts arise mostly from his participation on the retail side of the industry. For example, his failed Magna Entertainment Corporation was roundly criticized for missing out on the down-payment money for racetrack slots at Laurel Park. Gulfstream Park in Florida is another focal point, owing to its controversial architectural design and placement within a shopping area and casino.

None of this is surprising. Any major entrepreneur or company leader is going to be a lightning rod for criticism and second-guessing. That comes with being a mover and shaker. Donald Trump, for instance, is a highly successful real estate developer and TV show host, who also destroyed a lot of shareholder wealth with his ventures in Atlantic City casinos and a defunct airline shuttle service. The late Steve Jobs was once fired from Apple.

It is certainly fair game and to be expected for customers to weigh in on Stronach’s racetracks or for investors to lament his stewardship of the former Magna Entertainment Corporation. However, the cut-to-the-chase question is: Would the North American horse racing industry be better off or worse off without Stronach’s involvement? If you could turn back the clock and change history so that Stronach never became involved, would you do so in the best interests of racing?

People who run businesses are inevitably going to make mistakes and their actions will not be universally applauded. But these should be considered within the context of the bigger picture. Racing needs much more investment from extremely wealthy individuals, who are passionate about the sport, rather than less. Auction sales need more buyers, racetracks and partnerships need investors, and geographical areas like greater Lexington and Ocala need organizations such as Adena Springs that employ hundreds of people and pump money into the local economies.

Most of all, because the pari-mutuel product is in deep trouble relying on the traditional business model, significant departures from past practices—personified, for example, by Gulfstream Park–are essential. As Albert Einstein remarked, “Insanity is doing the same thing over and over again and expecting different results.”

Entrepreneurs are the straws that stir the drinks, the people who are willing to put their money behind new approaches. Old-line industries like racing inescapably stagnate without innovation and experimentation. Someone needs to do the disruption and not many in racing have stepped up. Frank Stronach is an important exception to the rule. Leaders like him are going to provoke plenty of negative emotion but are invaluable. (The key indicator of Stronach’s “outsider” status: he is among the most instrumental figures in American racing and the most prominent Canadian in the sport since the late E. P. Taylor, yet he is not a member of the U. S. Jockey Club.)

President Theodore Roosevelt talked in one of his most famous speechess, in 1910, about “the man in the arena”: “It is not the critic who counts; not the man who points out how the strong man stumbles, or where the doer of deeds could have done them better. The credit belongs to the man who is actually in the arena… and who at the worst, if he fails, at least fails while daring greatly, so that his place shall never be with those cold and timid souls who neither know victory nor defeat.”

Horse racing needs more disruptive-innovative entrepreneurs in a shrinking arena. Mike Repole might be a younger version of Frank Stronach in the making

WHAT’S YOUR TAKE?

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Does The Renovated Gulfstream Park ‘Get it Right’???

This week’s LET IT RIDE.COM HOT TOPIC comes from Eric Mitchell of The Blood-Horse…take a read and VOICE AN OPINION!

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Eclipse Award winners seemed to be reading from the same playbook this year. Several, at some point during their acceptance speeches Jan. 17, touched on the need for Thoroughbred racing to get fans more involved and engaged.

Mike Repole got the ball rolling while accepting the Eclipse Award for his 2-year-old champion colt Uncle Mo.

“Without you guys, there is no sport,” he said. “We have to do more to be more accommodating.”

A big step toward making racing more inviting would be to upgrade our racetracks. This issue of The Blood-Horse contains a top-notch feature on the state of year-round racing. A key point made in the main article by Jacqueline Duke is that we have a saturation of live racing; more product than demand. The days when tens of thousands of people regularly spun the turnstiles to watch live racing don’t exist anymore. The big crowds are reserved for boutique meets and main events, such as the Triple Crown, Breeders’ Cup, and select grade I races. Otherwise, our large, rambling grandstands are sparsely populated and not very inviting.

One racetrack did reinvent itself and got it right—Gulfstream Park.

I recently visited the Hallandale Beach, Fla., track fully prepared to hate it. My memories of Gulfstream Park have roots in the 1989 and 1992 Breeders’ Cups and several Florida Derbys in between. Standing on the wide concourse above the grandstand seating offered a sweeping view of the track enhanced by mild South Florida breezes coming off the Atlantic. A wide apron stretched along the rail where fans soaked up the sun and got close to the action.

Former owner Magna Entertainment (which has since gone bankrupt and transferred the track to current owner MI Development) tore down the old grandstand and replaced it with a much smaller facility that opened in 2006. Company founder Frank Stronach’s vision was to create an entertainment destination by building a more modern facility with an adjacent retail development filled with restaurants, bars, and fashion shops. Stronach has taken a lot of criticism over the years for his visions, but at Gulfstream Park his vision works.

Granted, grandstand seating and the large apron are gone, and the track is no longer suited to host an event like the Breeders’ Cup without a lot of temporary seating. Another knock against the new track is a majority of the seating is indoors where a seat in the simulcast parlor or clubhouse will cost at least $10. But no one pays anything to park, and there is no admission fee.

What the renovated Gulfstream Park does offer is a bright, clean, and modern facility with some unique features, such as several rows of stadium seating surrounding the saddling paddock. The grandstand also wraps like a horseshoe around the paddock, and balconies on the upper floors provide race fans with an easy view of the horses.

The more compact grandstand with its Spanish architecture is easy to navigate and the Village at Gulfstream Park with about 40 shops, which opened a year ago, is literally across the street. The Village offers a good variety of places to eat and drink; a glitzy New York-style nightclub, a quaint Irish pub, or the Cadillac Ranch with a mechanical bull. For people who are more interested in shopping than racehorses, there is Crate & Barrel, Williams-Sonoma, A-Brand, Bobby Chan, and Claudio Milano.

An exercise rider told me the Village has done a lot to attract people in their late 20s to a racetrack they would have otherwise ignored.

“I grew up around horses my whole life, but my friends like horses just because they think they’re beautiful,” he said. “Where before they wouldn’t come here, now they do because they can enjoy a few races, bet a few dollars, and then go to the bars.”

Judging strictly by ontrack handle, the experiment seems to be working. In 2010 the ontrack handle averaged around $530,380 for the 79-day meet. For the first 11 days of this year’s meet, the ontrack handle is averaging around $595,300.

Gulfstream Park also has the draw of slot machines, which are tastefully integrated into the grandstand. No one is knocked over the head with the casino operation.

Most track owners cannot afford to tear down their facilities completely and rebuild, but Thoroughbred racing has to upgrade the experience at the racetrack if the goal is attracting new fans. For the sport to grow, we simply cannot afford not to.

WHAT’S YOUR TAKE?

One Company, Two Approaches: Cater to the horseplayer or the horseman???

This week’s LET IT RIDE.COM HOT TOPIC comes from Richard Eng of Las Vegas Review-Journal…take a read and VOICE AN OPINION!

While Gulfstream caters to bettors, Santa Anita targets racers

This is a tale of two racetracks, Gulfstream Park and Santa Anita Park, which are operated by the same owner, Magna Entertainment Corp. and Frank Stronach.

At the same time that Santa Anita has raised its takeout on multihorse and multirace wagers, its sister track, Gulfstream, has lowered bet minimums and takeout, making the product more user-friendly.

Sounds like a case of Stronach’s left and right hands not knowing what the other is doing.

Santa Anita raised the takeout by 9.6 percent (to 22.68 from 20.68) on exactas and daily doubles and by 14.5 percent (to 23.68 from 20.68) for all other exotic bets. A predictable result has been a drop in handle of nearly 20 percent.

Meanwhile, Gulfstream has been creative in offering a 10-cent pick 6, a 50-cent pick 4 and pick 5 and $1 minimums on all other wagers.

The takeout in the pick 5 is a low 15 percent, making it one of the best bets in horse racing. It mirrors the Monmouth Park pick 5 in that regard plus has a similar carry-over provision if no one correctly selects all five winners.

I think a low-priced, low-takeout pick 5 is a good way to market to everyday horseplayers for this simple reason:

Suppose I take the time to handicap the five races in the pick 5. Not only will I play a pick 5, but I will bet many of those races individually, increasing my overall handle. That’s good business.

The takeout in the Gulfstream pick 6 is only 20 percent. But the most intriguing part is the entire pool will be paid out only if there is one unique winning ticket. When there is more than one winning ticket, 60 percent of the pool will be paid out and 40 percent will go to the carry-over pool.

The idea is to create a large carry-over pool that will spark more interest, and I think that will work, too.

Santa Anita offers a better price (15.43) in win, place and show wagers than Gulfstream (17.0), and in the trifecta and superfecta, which are a ridiculously high 26 percent at Gulfstream.

However, it seems like the philosophy of the two tracks is different. Gulfstream apparently listens to its fans in making the betting product more attractive. Santa Anita is trying to appease the owners and trainers who race there at a much higher cost to its players.

We horseplayers might be dumb, but we’re not stupid. I think, as a group, we are more discriminating than track managers are giving us credit for.

WHAT’S YOUR TAKE?

Does This Signal The End of Plastic Tracks?

This week’s LET IT RIDE.COM HOT TOPIC comes from Tracy Gantz of Bloodhorse.com…take a read and VOICE AN OPINION!

SANTA ANITA STARTS SURFACE REPLACEMENT

ARCADIA, CALIFORNIA — Removal of Santa Anita’s synthetic surface began Oct. 11 as the first step in replacing it with a dirt surface. Track officials are close to deciding the mix of materials to be used as the surface material, with input from horsemen.

Plans call for installation of the dirt surface to be completed by about Dec. 1, said project manager Ted Malloy. Horses are expected to be allowed to begin training Dec. 5 for the Santa Anita winter meeting, which opens Dec. 26.

Malloy said the removal of the synthetic surface will take two to three weeks. Track management and horsemen are investigating several different dirt mixes to come up with the best and safest surface. Several plots of material are undergoing testing in the area just west of Santa Anita’s main oval.

Malloy and George Haines, Santa Anita’s president, said that the dirt surface will be made up of a sand component, clay and silt, and pond fines. The testing is examining several different mixes of these three materials.

Once Santa Anita management determines the best mix, it will undergo further testing under the direction of the California Horse Racing Board, Haines said. The University of California at Davis will test it, as will Dr. Mick Peterson from the University of Maine. Peterson is the executive director of the Racing Surfaces Testing Laboratory.

“We want to make sure we have the right parameters for the soil,” said Haines.

The CHRB still must approve a waiver for Santa Anita to return to a dirt surface. Originally, the CHRB mandated that all major California Thoroughbred tracks convert to a synthetic surface.

Santa Anita has undergone two renovations of its initial Cushion Track surface, installed in 2007. The track has not drained properly, leading to the loss of several days of racing. Santa Anita owner Frank Stronach in August announced he would replace the synthetic surface with dirt in time for the 2010-11 winter meeting.

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