Wednesday, May 6, 2020

The Sport of Racing is More Like a Factory Than We Think

There's been a lot of talk lately about getting things in the economy rolling. Most of the focus has been on service industries - restaurants, bars, salons, etc - but in the same vein, this is spoken about for heavier, more labour intensive industries, as well.

I read some who talk about opening a factory in stages, or a letting a pulp and paper plant operate at three quarters capacity. That not, as most of you know, how it works. There's no Mrs. Factory hitting a switch, controlling production. Economies of scale provide pass/fail decisions on operations, and if production is cut from X, something has to give. Mainly, with a plant not being operated at capacity it should not open, or it would alternatively have to raise prices bigly; and doing that, when others are not, is a profit and loss statement death sentence.

It strikes me that this lower supply strategy is something most-preferred for horse racing in some cohorts.

We want tracks to open - just not those tracks. If those tracks weren't open the industry would be better off.

We really need horses to race without lasix. If we kill off the drug there's a good chance that those horses won't race at those tracks. It's a big win.

Where do horses go to race who can't race at the elite tracks? Where do the horses go who need lasix? Where does the money go from slots, in places like West Virginia, where those tracks are. The casino money is as green there as it is in New York.

Where do all the mom and pop horsepeople go to ply their trade? Race Chad Brown horses in the Acorn?

I get the wish to shrink and make this game "better". But to me it really is just a wish.

Horse racing is an ecosystem with revenues that come from all over, through traditional (handle) and non-traditional means (subsidy). It's the small trainer in the backwoods in overalls, and Chad Brown or Todd Pletcher in $100 ties. And they are much more dependent on each other than people think.

Horse racing is a pretty unique business, but it's still a business. Without it operating at a high capacity, it'll be, in my view, a lot smaller than the C suite thinks. Sometimes I wonder if they think about the larger picture, when asking the sport to shrink.

Have a nice Wednesday everyone.

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