| Horse Racing Partnerships come in many shapes and | | | | after the sale?) Did they properly inform you of all the |
| sizes. So much so, that it is sometimes difficult to | | | | risks? Do they utilize a "hard sell" approach? Are they |
| discern the differences between competitors. So what | | | | helpful at getting you licensed? Ultimately, you will have |
| does a novice, or even an experienced investor, do | | | | to judge for yourself in order to arrive at a decision. |
| once they have decided to invest in a horse racing | | | | Do your homework. Ask around and do research on |
| syndicate? With a multitude of variable choices | | | | the Internet - it can tell you much about a racing stable. |
| available, the task of selecting a racing stable can be | | | | Would you be happy buying one percent of a horse |
| overwhelming and complex. | | | | for $1,000 only to later discover that the partnership |
| Last year, the Green Monkey, a two-year old colt in | | | | purchased the horse at a sale for $2,000 a month |
| training, sold for a record price of sixteen million dollars. | | | | ago? Research what they paid for the horse. If the |
| Some of the top prices paid can be very discouraging | | | | horse was ever sold at public auction, the information |
| to individual horse investors seeking to get into the | | | | is available. View their website and read all the pages. |
| racing game. With the inherent risks associated with | | | | Training costs can also vary substantially from track to |
| horse racing, and they are substantial, the concept of | | | | track. The bigger, more popular urban tracks can be |
| participating as a partner in a syndicate has become a | | | | twice as expensive as the more rural tracks. |
| popular way to participate in the "Sport of Kings" and | | | | Where will your horse be stabled? That will impact |
| minimize risk. | | | | both your cost and the opportunity to see it race live. If |
| Participation in a horse racing syndicate should primarily | | | | you live near Belmont Park in New York, you will |
| be done for entertainment purposes with low financial | | | | probably enjoy your investment more if you can see it |
| expectations. The notion that your first racehorse will | | | | race live. Admission to the saddling paddock before |
| win the Kentucky Derby is highly unlikely. Your odds of | | | | the race, owner's box seats, socializing with your other |
| that occurring are about one in forty thousand. Maybe | | | | partners and participating in the winner's circle |
| it's a little better than the odds of winning the lottery, | | | | photograph are all benefits that are enjoyable for most |
| but still very hard to achieve. If your entrance into the | | | | partner's. It's hard to do if you live in New York and |
| racing game is based upon the idea of entertainment | | | | your horse races at Santa Anita (California) or |
| and enjoyment, you're probably in the right frame of | | | | Gulfstream Park (Florida). Keep this in mind when |
| mind to get into the business. | | | | choosing a horse racing partnership. |
| Most horse trainers will tell you there is no way to | | | | You may also want to look at the way the managing |
| know for sure if a horse will do well in racing - until it | | | | partner makes a profit off the syndicate. Is it through |
| actually races. I've had horses train great and be huge | | | | marked-up prices, management fees, or a combination |
| disappointments in the afternoon. Conversely, I've also | | | | of both? Some partnerships will syndicate horses at |
| had horses that have shown little during training | | | | their cost and charge no management fee. Why? |
| become stakes winners. You just never know. Horses | | | | Because they will retain a large percentage of a horse |
| range in prices from a few hundred dollars to, like I said | | | | and they are just looking just to minimize their risk. |
| earlier, sixteen million dollars. There are studies that look | | | | Syndicates such as these make their money by |
| at the success of racehorses by price range. | | | | having successful racehorses. My syndicate, Dream |
| Strangely enough, there isn't that much of a difference | | | | Team Racing Stable, is just such a syndicate. There is |
| - statistically. Your odds of having a better horse if you | | | | nothing wrong with a syndicate making a profit, but |
| pay one million dollars is not much better than a horse | | | | partnerships where the managing partner's profit is |
| you bought for one hundred thousand dollars. The | | | | driven by success on the track seem the best way to |
| difference is minuscule. And that folks, is what allows | | | | go. Partnerships who collect large monthly |
| average people to own great racehorses. | | | | management fees are unlikely to retire poorly |
| No doubt, racing partnerships are the way to go for | | | | performing horses, as it is not in their best interest. |
| the average participant. It allows you entry into the | | | | They will race the horse forever and you will continue |
| game for a fraction of the cost and it allows you to | | | | to pay and lose money for a long time to come, while |
| diversify your risk. Typically, for every three | | | | the management continues to profit. Choose a |
| racehorses you purchase, only one will do well. That | | | | syndicate where your best interest is in alignment with |
| doesn't mean that the one successful horse will turn a | | | | the syndicate's best interest. Partnerships with |
| profit, just that it will be able to compete and come | | | | excessive mark-ups and/or management fees are not |
| close to breaking-even. If you get lucky, you might | | | | in your best interest. |
| even make a profit. The last study I recollect | | | | Cheap is not always best. I see all kinds of syndicates |
| concluded that only about seventeen percent of | | | | that offer horses at really cheap prices and seldom do |
| racehorses make a profit. Granted, you can get lucky | | | | I ever see those horses succeed on the track. |
| and do very well financially, but it's rare. | | | | Knowing that it costs about $45,000-$55,000 per year |
| The cost to acquire and train a horse is substantial, | | | | to train a horse (not including acquisition costs) at |
| which is another reason why partnerships are the way | | | | Belmont, I'd be very leery of partnerships that are |
| to participate. If you enter the racing game purchasing | | | | offering a horse for sale for less than cost. A horse |
| one horse and that horse performs poorly, it's likely to | | | | being offered for sale for $29,900 with all expenses |
| leave a bad taste in your mouth. The key is to | | | | included through the end of the year, well, quite frankly |
| diversify by investing in several horses. Sometimes the | | | | it scares me. Are they trying to recoup some of their |
| good ones will carry the bad ones. Also keep in mind | | | | investment on an injured horse? If not, what are they |
| that poorly performing racehorses will eventually be | | | | doing to cut costs? What part of the horses care and |
| retired, reducing your loses and increasing your | | | | feeding program is being reduced? No matter how |
| bottom-line. Unless there is a good reason for the poor | | | | they do it, it's not in the best interest of the horse or |
| performance of a racehorse, the partnership should | | | | yourself. |
| retire the horse and move on. Experience has shown | | | | Bigger is not always better. Bigger outfits spend |
| that poorly performing horses, after several attempts | | | | substantial money on advertising and marketing. You |
| at different distances on different surfaces, are unlikely | | | | see their advertisements on the horse racing television |
| to improve significantly. Get rid of them. It's sometimes | | | | stations all the time and their marketing is brilliant. They |
| difficult to do when you have invested so much | | | | have the nicest websites and the nicest brochures. |
| money into the horse, but most of the time you are | | | | Don't be fooled. You need to look underneath the |
| just throwing away good money after bad. | | | | make-up to see what's really there. And besides, who |
| Some primary things to consider in the selection of a | | | | pays for all that shine and gloss? You do, in the prices |
| partnership include reputation, cost and location. | | | | you pay to participate. |
| Look to unbiased people who can give you | | | | Claiming partnerships are becoming more and more |
| constructive feedback on existing partnerships. Keep in | | | | popular. They allow you entry into the game at a very |
| mind, that all partnerships can offer you positive | | | | low price with a horse that is currently racing. Keep in |
| references. That's useless. Everyone has a few | | | | mind that when you claim a horse, you may be |
| friends and family members who will vouch for them. | | | | claiming someone else's problem and now their |
| That's why I used the word "unbiased". Hang out at | | | | problem is your problem. I've seen horses claimed that |
| the track and ask a few people who have knowledge. | | | | were completely broken down and totally incapable of |
| Keep in mind that they may have an agenda also, so | | | | ever racing again. When you claim a horse, you do so |
| be careful. Sometimes things like communications may | | | | at your own risk without the ability to vet or inspect the |
| make a difference. How does the managing partner | | | | horse close-up. It is very, very risky. If a horse is |
| communicate information to the partners and how | | | | running in a cheap claimer there is a reason why. Keep |
| often? Are they receptive to phone calls and e-mails? | | | | this in mind. I have never participated in a claiming |
| Do they answer them in a timely manner? (Probably | | | | partnership and have never offered one. I doubt I ever |
| everyone provides good follow-up/communications | | | | will. |
| before you buy into a partnership, but what about | | | | |