Is the hot yearling market in danger of busting?

Many economists point out that the economy is very fragile.

The housing market paced on in a record-breaking fashion as interest rates came down and, suddenly, when inflation infiltrated our economy, interest rates started going up, ironically, quarter by quarter (in time and percentage points) and the housing market cooled off.

Could the same thing begin to happen in our own backyard—the yearling sales market?

That market, too, just like the housing market, stock market and, in our everyday case, the supermarket, might become fragile, as well, as economics play such a vital role in all aspects of our lives.

Despite pari-mutuel handle not coming remotely close to satisfying purse distribution and despite the continuing attrition of the harness racing fan base, breeders have basked in remarkable success over the past several years as legislators have pumped big dollars into sire stakes programs in many States and casinos have softened the blow of declining pari-mutuel handle with contractual obligations.

Of course, casinos investing, say, $15 or $20 or $30 million in racing is a small price to pay for the opportunity to net $100 or $200 million or more a year from slot machine revenue, card rooms and other table games.

But, as we all have witnessed, political dollars can play a huge role in this game.

In Florida, there was thought-to-be an iron clad deal for racing when, in 2004, voters approved the construction of casinos, first, in Broward County and, later, in Miami—Dade County.

But when the Governor started twisting arms on his legislative cronies—all except Dan Daley—they caved in before their backs were broken and, instead, a decoupling measure was approved—without voter approval—breaking the back of the pari-mutuel industry—especially Pompano Park on the standardbred side and Calder Racecourse on the thoroughbred side.

With it, an already struggling Florida standardbred breeding industry was put to sleep permanently, along with more than 10,000 jobs involved in the harness racing industry in other ways.

Many in our sport down here owned farms, training facilities and homes.

Others were trainers and drivers, caretakers, veterinarians, farriers, salespersons selling everything from sulkies and feed and bits and poultice powder and sawdust.

Hall of Fame horseman Wally Hennessey, a “Floridian” for many decades said, “This has had an unbelievable and detrimental effect on many of us and the closure of Pompano Park has uprooted many, many lives here.

“It’s amazing that the Florida legislature—and even our local elected officials—couldn’t see the forest through the trees and cared so little about us…and we were the people that elected them to represent our interests!”

Track maintenance workers to pari-mutuel ticket sellers and program sellers were also significantly impacted, as well.

This was a far-reaching decision our Governor made—again, without voter approval—and damaged Florida’s agricultural industry greatly.

So, that’s history and there are those that are saying “well, that didn’t involve me.”

But history has a tendency to repeat itself.

In fact, that’s a very famous quote…”history repeats itself.”

That quote refers to how we rarely learn from history past, whether it be to ourselves or others and, as one philosopher and political theorist said, “History repeats itself, first as a tragedy” and “second, as a farce.”

Last year, there were about 185 races—NOT Sire Stakes—considered “major” events in harness racing with purses totaling somewhere around $43,000,000.

Add to that the many States having lucrative Sire Stakes events and that number balloons by many millions of dollars.

At Scioto Downs, itself, the Sire Stakes program is worth around $10 million.

Add Northfield and Miami Valley to the Ohio mix along with the fairs and you that’s another $10 million…or close to it.

In New York, the Sire Stakes is contested at Yonkers, Saratoga, Tioga, Vernon Downs and Buffalo giving good life to their program to the tune of $6 million.

Indiana has a very rich stakes program throughout the season with SS action contributing close to $5 million. The State Fairgrounds at Indianapolis has some good action, as well.

Kentucky’s program looks to have legislative support and the added perk of sports betting coming on board and the Bluegrass Stakes program at The Red Mile looks to be close to $12 million.

That, plus the low takeouts on exotics and penny breakage completes a very viable Kentucky package at The Red Mile for both horseman and fan alike.

Add Oak Grove and Cumberland in the equation and the total is bolstered by another $2.5 to $3 million in Kentucky.

Many tracks are starving, though, and States like Illinois and California, once icons in the industry, are struggling to take a deep breath these days.

So, we’ve touched upon some of the hot spots in the harness racing world, you know, where the hottest sires are right now with new ones taking their place every generation until the hottest ones aren’t so hot anymore…just like the hot 1:50 mile a few years back…which, really, isn’t so hot anymore, either.

But it’s still all good news, right?

The breed is strong…the purses are strong…there’s a lot of money for the lucky few that are the Valedictorian or Salutatorian in their respective classes of trotters and pacers.

Even being in the top five or 10 is excellent for earning power, which, really, should be the measure of success since it is the dollars that pay the bills—not speed.

And all those millions of dollars have to satisfy the appetites of the owners of many different classes from trotters and pacers and two-year-olds and three-year-olds and an occasional four- or five-year-old so the slices on the Stakes cake gets pretty thin after the 50% and 25% slices come out.

But there are two obstacles that are always shaking the foundation—the State Legislatures and the casino owners, themselves.

Whenever there are shortfalls in State budgets, the very first place at which legislators seem to look is in the agricultural section with the most expense…and its horse racing!

Caesar’s looked at land value and the bottom line and, with political help, got it done to assassinate Pompano Park, a historical landmark, built by Frederick van Lennep and his wife, Frances Dodge van Lennep, some 60 years ago.

The “nickel” was put on the political table…the Governor grabbed the “nickel” and, voila, politics won over the lives of 10,000 people, as well as erasing the van Lennep name from history and, if you think it’s “sour grapes”…

IT IS!!!!!

We aren’t alone in our grief.

Another company that is known as host for the greatest equine event in the world…a company that puts on a facade as one that categorically deeply cares about the equine industry…threw away Calder Racecourse and Arlington Park like trash for cash…well……you can fill in the rest of the sentence!

In tough economic times, which seem continual in these days for so many, it may only be a matter of “time”—before another corporate tragedy or legislative shortfall hits our sport in another State.

While “time” in the form of a 1:50 mile has taken over our sport, it doesn’t mean anything to a corporation (and, truthfully, it doesn’t mean a whole lot on the racetrack anymore, either) that has little “time” to show results to its shareholders who bark and say it’s “time” to shed the parts that aren’t showing meaningful profit.

Legislators and gaming companies look at voters and say…Voters? So, what!

They look at contracts and say? Contracts? So, what!

Don’t think it can’t happen to you.

When the first solid brick is pulled from the building that supports racing, remember, it weakens the whole structure of racing…and that begins with the breeder who now stands a stallion for a $2,000 or $20,000 fee.

What will they be worth? What will their royally bred yearlings be worth when shortfalls in State projects or corporate earnings “pop up?”

The real question is…Why doesn’t anyone care?

by John Berry, for Harnesslink