Wednesday, December 14, 2011

Racing's Infrastructure is a Huge Barrier

If we ask any industry watcher about someone in racing (virtually anyone), the words "out of touch", "not smart enough", or even worse come to mind as labels. It's easy to be critical of those in the sport when the business has lost upwards of half its handles the last while. And make no mistake - some of it's very valid and on-point.

I thought similar early this decade, but the more and more I think about it, (for the most part) it simply isn't the case.

I have a good friend since University who's nice guy from a working class background. He's a normal, honorable, grounded guy with no pretensions.

But he's scary smart. I mean really, scary smart.

For his GMAT to get into business school he scored a "perfect" which only a handful of people in North America do each year (when I gave him my score he was sheepish to tell me his). When we both took our first year CFA I was dumbfounded with the work. He passed with flying colors; doing half the work I did.

He started in a mail room of a major bank and finally had to leave because they didn't recognize his smarts and wouldn't promote him. I won't buy stock in that bank, ever, because this guy was that obvious.

He moved on, succeeded, and never once lost his grounded principles and street smarts, taught to him by a super-good mother and father.

We used to go to the track when we were kids and we talk about it often. When we speak about the infrastructure in racing over a few beers, he often says "no wonder it's screwed, it would take Houdini to succeed in that mess".

Nick Eaves is not 'dumb' or 'out of touch'. Neither is Bob Evans. If we read the press or chat boards, Frank Stronach is apparently the dumbest man in racing, which is quizzical seeing he built a multi-billion dollar auto parts company from scratch in a basement; something that we mortals and 99.999% of the world's population couldn't dream of doing.

Why do so many of these smart people come to racing and not succeed? I surmise some of it's because they are not gamblers, and they have to juggle the horsemen balls with the gambling balls; so, yes, that might be valid criticism.

But most of all I think it's because the deck is stacked against them. Forcing change in horse racing is like changing Congress.

Nick, Bob, Frank and others are smart. That's why they lobby for slots, table games and whatever else they can do grow their business. The solution for racing is too much work, far too elusive, not worth the opportunity cost, and at the present time, not ROI positive.

1 comment:

Eric P said...

...all paths lead to the need for a central authority....