The Alan Balch Column - Artists of the air

There are ever fewer of us around who can clearly remember the world before the advent of television.  And the Internet.

But as I thought about the retirement of Trevor Denman, and all his illustrious contributions to American racing, nostalgia overtook me.  As it does quite often these troubling days.

Those of us who have been around for eight decades or more remember when sports were largely heard, not seen.  If you couldn’t get yourself to a ballpark, or college football stadium, or race track (there really weren’t that many of them, considering the size of the United States, or any country) in the 1940s, or earlier, you followed sports on the radio.

Baseball games were often, even mostly, recreated, with appropriate sound effects.  Believe it or not.  I was just a kid when I realized that the pop of the ball into the glove was phony, because it was the same for each pitch.  Same thing for the sound of a batted ball!  The crowd effects were ridiculously similar from inning to inning and park to park.  The telegraph wires provided the “facts,” and the announcers re-created the action.  Someone named Ronald Reagan began his career doing that kind of sports announcing.

Then there were the movie theater newsreels, which almost always had the leading sports.  You could “thrill” to Clem McCarthy calling a race, whether it was the first Santa Anita Handicap in giant clouds of dust, or Seabiscuit beating War Admiral at Pimlico, and actually see them.  After having heard them on the radio when the races were run.

So, the radio was how racing first came into my life.  And into millions of other lives.  Joe Hernandez was the original Voice of Santa Anita.  He called its first 15,587 consecutive races, never missing one at the winter meeting, from Christmas Day 1934 until he fainted at the microphone in January 1972, and died several days later from the effects of being kicked on the backstretch at Hollywood Park during morning training.  That iron-man streak was one of the most remarkable achievements in sport, in its own way, ranking up there with Lou Gehrig’s.  

Countless of us, particularly throughout California, only knew racing through Joe’s lilting, accented radio calls, all beginning with his booming, “There they go!” -- whether from Santa Anita or Del Mar or tracks in the north.  “From the foot of the majestic San Gabriel mountains, this is your announcer Joe Hernandez at spectacular Santa Anita,” he would intone, and your imagination took over.  Just like it did in other sports on radio, when the artist was . . . well, an artist!

Hearing him from childhood, live and also re-creating the day’s races, hawking “Turf Craft winners” for a sponsor, I couldn’t believe my good fortune meeting him when I was first employed at Santa Anita.  We immediately started using his artistry in commercials, and he gifted me with all his old recordings, which he had meticulously kept since 1934.  I pestered him constantly, and he was an unsurpassed raconteur.  He unhesitatingly told me the greatest race he called was the Noor (117 pounds, Longden) and Citation (130, Brooks) battle in the 1950 San Juan Capistrano. They hooked each other for almost the entire mile and three-quarters on the main track.  Noor won by a nose.  Let your own imagination take over: “the two raced head and head for five-sixteenths, the lead see-sawing back and forth, in the most protracted drive,” said Evan Shipman in the American Racing Manual.  “They were to continue locked right down to the wire, where, with the luck of the nod, the camera caught Noor’s nose in front.”  Broken down by quarters, the race reads:  24, 23.4, 24.3, 25.3, 24.3, 24.3, 25.3!  Citation led at the mile and a half mark, two-fifths faster than the American record at the time; the two set a new track record by almost six full seconds, and a new American record.

His 1940 call of Seabiscuit becoming “a new world’s champion” in the Santa Anita Handicap still rings in my ears, from the souvenir we produced, “70,000 fans going absolutely crazy, including your announcer, and he broke the track record, it’s up there.”

Is it any wonder that a bust of Hernandez graces the Paddock Gardens at Santa Anita?  Perhaps the only such recognition for a race caller in the world? 

As Joe’s most luminous and artistic successor, Trevor has long-since joined the pantheon of the world’s great artists of the air waves, but in an entirely different era.  With the advent of racing being televised lived, he couldn’t have gotten away with any of Joe’s famous antics:  he once sat down after calling the horses through the stretch to the wire off the hillside grass course, when they still had another mile to run.  Waking up to what had happened as the horses turned into the backstretch, with his customary aplomb he simply blew into the mike and tapped it twice, then proclaimed, “TESTING, TESTING,” and continued as though there had been a power outage.

Having once yearned to be a jockey, Trevor’s viewpoint has always been unique.  He asked permission to walk the courses at Santa Anita his first day.  Asked why, he said to me, “I have to see everything from the riders’ perspectives.”  He was the first American caller seamlessly to integrate the riders’ names and styles in his pictures, as he painted the race.  He also seemed to know instinctively just how much horse each jock had at all times.  If you listened carefully to his tenor, many were the times when you knew who the winner would be at the half-mile post.  

Still, all the tributes to him can be summed up very simply:  he has been, in short, “UN-BE-LIEVE-ABLE.” 

Alan Balch Column - In search of . . .

Article by Alan Balch

I’ve always thought racing is the world’s greatest sport for many reasons, chief among them the fact that human and animal are united in an athletic contest that mirrors and condenses “real life” in every single race.

The struggle to compete, and to win, with the outcome unknowable in advance.  Potentially accessible to and witnessed (and participated in) by the entire range of humanity, from most to least exalted, almost all of which can bet on the outcome.  With the resulting winners and losers.  And all the possible ramifications of that, financial and otherwise.

Add to that the track’s abundant social life, especially on race days, the beauty and majesty of horses and so many of racing’s settings, not to mention the sport’s sheer entertainment value . . . it’s hard to believe that it’s struggling to survive in much of America.  

Particularly California.

How can this be so?  I’m searching for answers.  Reasons.  And outcomes?  Every individual race, after all, presents the same challenge, a search -- in microcosm.

All of us should also be searching for solutions to the serious problems our sport faces, if it is to endure.  Let alone prosper.

In this vein, there could be no greater tribute to the late, esteemed, and highly accomplished Ed Bowen, than finally to act with sincerity on his 1991 plea, if it isn’t already too late . . . that “leadership by narrow vision should be replaced by a sense of common goals.”  Nearly thirty-five years ago, in a very important sense, he predicted what has now befallen us, particularly in the Golden State, owing to a pronounced failure to reject the “narrow vision” of our sport’s leadership.  Especially since that deficient, occluded vision has now metastasized, with very predictable results.

There can be little doubt than an utter failure to embrace effective strategic planning (including “a sense of common goals” among all of the sport’s interdependent parts) has led California racing to the precipice.  Are other major jurisdictions, such as Florida, far behind?

It didn’t have to be this way.  In the early 1980s, California and particularly Santa Anita racing were on the crest of a dynamic wave of strong, even record-breaking business, powered by investments in marketing, management, and new technology.  The public companies which owned California’s major tracks were future-oriented.  I vividly remember Robert Strub leading lengthy discussions among what have become known as racing’s “stakeholders,” including owner/trainer representation of course, and legislators, to assess our weaknesses and the potential future threats to our success.  As a member of Santa Anita’s management myself at the time, I knew first-hand the projected value of our 440 acres; we sought to inspire and elaborate a business plan that would protect the future of racing while at the same time carefully developing the property from its perimeter inward, with training and stabling to be increasingly located elsewhere, principally at Pomona’s protected county property. 

The details, plausibility, and ultimate strategic viability of any ancient planning are not what’s important now, in California or elsewhere.  What is important is the “sense of common goals” we had then, as opposed to the “narrow vision” which continues to afflict us now, and even threatens our once-vibrant communities in California and Florida particularly.

The Strubs of Santa Anita -- Dr. Charles Strub and his son Bob -- were known above all else for their unflinching and rock-solid integrity.  Some of their positions and initiatives were unpopular, but they were never shy about expressing the reasons for them, and sharing those reasons and their vision with their interdependent partners in the sport, while always considering counterpoints.  Above all, they taught the gospel that Bowen espoused: “The approach that, Without us, there would be no game, stands in the way of progress.  It is a simplistic approach, blinkered on both sides, for it is so self-evident in every case that it hardly bears repeating.” 

However, that very simplistic and blinkered approach Bowen cited decades ago, wherein track ownership makes decisions in a vacuum, then dictates to everyone else, whether legislators, regulators, owners, trainers, breeders, jockeys, fans, or media, is what has brought us to the edge.  Along with their well-documented failures to honor commitments, conflicting and even rival statements from within the same company management, and a revolving door of inexperienced and inexpert “leaders.” 

Do all successful businesses “win” because they see the future so well, better than their competitors?  Consider that the particularly difficult enterprise of racing, in all its aspects, especially risk, is essentially future-oriented – it begins with breeding race horses, with the annual foal crop.  That fact alone requires knowledgeable track ownerships to comprehend where racing is headed many years in advance, based on objective evidence.  And it mandates sophisticated guidance to tracks by breeders, trainers, and owners, whose own interdependent businesses require understanding of critical trends, that may not be readily apparent to others.  Especially to any track owner who chooses to operate and make decisions about their racing enterprises in a vacuum, rather than with an objective, truly experienced strategic team.  

When track ownership is apparently immune to the true interests of the human and equine populations on whose backs their profits have been generated . . . when its highly compensated managers and representatives either pretend to listen to other viewpoints or don’t even try . . . is it any wonder that all the rest of us are left to search the skies for the answers we seek, or possibly even divine intervention?

Alan Balch Column - Principles of Marketing

Article by Alan F. Balch

When I first joined the management of Santa Anita in 1971 (that’s right, over a half-century ago), one of the earliest meetings I had with its leadership made an everlasting impression on me.

Indoctrinating me were Robert Strub, son of the track’s founder Charles H. “Doc” Strub, and General Manager Fred Ryan, who had worked for Eugene Mori (of Hialeah, Garden State Park, and Tanforan fame).  Giants of American racing evolution.  

I had been placed in charge of ‘public relations’, which included advertising, promotion, and publicity.  The term ‘marketing’ had only recently become relevant to most businesses and had not yet been applied to racing management anywhere in the world.  The first thing I had to remember, I was told, was that free admission to boost attendance was never to be suggested.  As Mori had once famously said, “the view alone at Santa Anita is worth the price of admission.”  Ryan added, “we have the tightest gate in racing, and it’s going to stay that way.”  Non-betting sources were 50% of revenue then, remember.  

Then, Strub had his say.  “My father always warned that we can’t let ourselves go the way of buggy whips.  We continually need new, young thinking, and that’s why you’re here.”  I guess I don’t have to add that way back then, there was a thirty-year age gap between mine and the next older department head on the track staff.  My assigned task, my only task, was to drive attendance.  “Don’t worry about anything else,” Strub advised, “you get them here, and the betting will take care of itself.”  True then.  Still true.

Marketing for profit never changes.  What’s old is new.  In these pages two years ago, I extolled the virtues of Royal Ascot.  Especially its continually advancing marketing, under Ascot’s director of racing and public affairs, Nick Smith, who says (and way more important, does) the right things.  

So, too, says (and does) Mark Taylor, of Taylor Made Farms and through Medallion Racing a partner in a Royal Ascot Group 1 winner Porta Fortuna. 

Both of them understand marketing in the old Santa Anita way, now lost from much of American racing, especially in California.  Real marketing is an investment, not principally an expense.  It is also an attitude.  A way of doing business.  The only way ancient businesses (which racing and breeding certainly are) can survive a constantly changing and increasingly competitive world.  Engaging and funding proper marketing, rightly understood, is the necessary if not the sufficient condition for the survival of any business enterprise in the modern world.  And, sad to say, most of what now passes for ‘marketing’ in California racing is anything but.

Here’s Taylor, for whom Royal Ascot was “beyond my wildest expectations.  However they have done it, everybody who works there genuinely takes an interest in the customer experience.  What I really took away from it for our organization is more training and spending more time getting each employee to really put themselves in the customer’s shoes.  And say, ‘how can I make this an incredible experience for them and let the person know I care.’”  

This very quotation could have been lifted right out of Philip Kotler’s foundational textbook, ‘Principles of Marketing’,  which was the inspiration for modern marketing beginning in the late 1960s.  “Marketing is sales from the customer’s point of view.”  Further, Kotler advised that marketing point of view had to be ingrained in all functions of any organization, from operations to finance to production, in order to optimize success.  And that was no easy task, since that marketing point of view . . . as it begins to succeed at all levels and results in growth . . . creates more and more hard work for everyone in every function, as well as a new mindset. 

Emphasizing the critical nature of attendance at the races, not just betting, Ascot’s Smith mirrored those comments:  "Hospitality was at record levels this year, with 13 Michelin stars across the kitchens, but that top-end fine dining option is quite resilient whereas general ticket sales aren't always.  The racing is at the heart of it for a lot of people.  You have a competitive interest betting product as well as racing at the highest level, and all of these things need to come together.  We have huge positives which we need to promote and be proud of.  This is a time to step back and say let's look at what's really good about the sport, promote it, be proud of it and build from it."  Amen, I say.

Where racing is struggling (including California), failures of marketing and management are critical reasons.  Even Del Mar, long the brightest light in the West, has dimmed.  Where boisterous big turnouts of over 40,000 stormed the track in the last decade, the largest attendance last year was barely over 20,000.  For the last three years, just over the 10,000 mark attended its marquee $1-million Pacific Classic, half to a third of what it had drawn historically, supposedly in the name of ‘superior customer experience’ for the relatively few present!  The abysmal attendance at the last Breeders’ Cups at Santa Anita, and on its own prestigious days, were actually fractions of the figures announced. 

Since its origination some 300 years ago, racing as a sport and enterprise has been relentlessly confronted by change and competition.  That it has survived at all is remarkable, I suppose, but also a tribute to its majesty and allure . . . when presented, managed, and marketed properly.  Look not just to Ascot, but also to Belmont at Saratoga, to Keeneland, and to Churchill Downs:  investment, renewal, and sophisticated, integrated marketing, both industrial and consumer, with all its modern tools, are essential to racing’s future.

Many say that the future of racing has little to do with attendance at the track.  If that is so, where will all the breeders, trainers, owners, and bettors come from?

Alan Balch - Remembering where we come from

Victor Espinoza photo

Like so many of us in racing, I’ve been horse crazy my entire life.

Some of my earliest memories are being on my dad’s shoulders, going through the livestock barns at the San Diego County Fair, and then lighting up when we got to the horse show . . . which, back then, was located just outside the turn at Del Mar into the backstretch, at the old 6-furlong start, long before the chute was extended to 7/8. All their horse barns back then were the original adobe, open to the public during the fair, and we could walk down the shed rows talking to the horses, petting those noses and loving the stable smells.

At least I did. My mom was appalled, of course.

She assumed, I’m certain, that I would grow out of my weird fixation. But the way those things go at certain ages, the more I was discouraged, the more obsessed I became. The fact that our family was decidedly not elite in any respect, certainly not educationally or financially, became a great opportunity for me to work at what I loved the most: taking care of the horses, to begin with, and camping at the barn whenever possible. At first, I wasn’t getting paid at all—except in getting to learn to ride by watching and listening and then riding my favorite horses without having to rent them. Lessons were out of the question.

I gradually learned that the people who owned and showed and raced horses had to have the money to do it, and being able to do that myself was beyond my imagination. I don’t remember ever caring. Nor do I remember ever being mistreated because of my lowly station. In fact, it was a great bonus for me to get out of school at times to travel to shows and live in a tack room in the stables. And, as I grew older, to start getting paid actual wages for my work.

Making it through college and graduate school without having to wash dishes in the dining hall led to my loving equestrian sport in a different way and at a much different level—especially when I met Robert Strub at the Forum International Horse Show in Los Angeles (which I was managing while attending school). He offered me a position at Santa Anita. 

Elite equestrian sport, racing and non-racing alike, became the rest of my distinctly non-elite life. And, I venture to say, my fellow non-elites in these sports vastly outnumber the elites. 

Almost all trainers, jockeys and racing labor on the backstretch, who make the game go from hour to hour, day to day, month to month, and year to year, weren’t elite when they started out, at least by any definition except the one that counts: their merit, their specialized skills, and their commitment to horses and the sport. I remember how moved I was a decade ago when one of international racing’s most elite trainers got choked up when describing how it felt to be appointed a director of an esteemed racing association. “I’m just a trainer,” he said, as though his accomplishments and expertise didn’t qualify him to rub shoulders and contribute to deliberations alongside wealthy and powerful elite decision-makers. They did. And they do.

In this greatest of all sports . . . where the interdependence of all its critical components is its essence . . . elites of accomplishment and merit, like him, comfortably perform alongside all the other elites, including those of birth, inherited or self-made wealth and royalty.

Horses have brought us all together, and many of us have been lucky enough to know—and be appreciated by—some of the world’s most famous personages.

So it was when Victor Espinoza, the self-proclaimed “luckiest Mexican on Earth,” won the Triple Crown, and later had occasion to meet and joke with Queen Elizabeth II at Royal Ascot. Doesn’t his story sum it up? And remind most of us where we came from?

The eleventh of twelve children, born on a dairy farm in Tulancingo, Hidalgo, growing up to work in a manufacturing plant and the stables, Victor drove a bus to pay for jockey school. Anyone who has endured Mexico City traffic knows the elite skills that must have been required! He aspired to more; his skill and determination resulted in successes reserved for the very fewest of the world’s top athletes. As the famed Dr. Robert Kerlan – who treated athletes at the highest levels of every major sport – once observed, “pound for pound, jockeys are the greatest.”

When honored by the Edwin J. Gregson Foundation, which has raised over $6 million from the racing community in 20 years—of which 98% is dedicated to backstretch programs including scholarships for its children—Victor again cited his luck in achieving what he has without much school, as well as his amazement at the Gregson’s success in its scholarship program. Hundreds of backstretch community children have gone to college because of it—in fields ranging from mechanical engineering to biology, nursing, graphic design, criminal justice, life sciences, sociology and everything else.  

A few are now even among the world’s elites in architecture and medicine. The backstretch teaches tenacity.  

And isn’t that just one reason why her late Majesty the Queen loved horses, racing, and its community, above all her other pursuits?  

Alan Balch - Inspiring Ascot

Although I’ve never been to Royal Ascot, I first went to the course in October 2012, for the second British Champions Day, where Frankel “miraculously” recorded his 14th straight and final win after having been left at the start of the rich Champion Stakes.  

On a cold, damp day, with the going “soft, heavy in places,” a capacity crowd of 32,000 was in attendance, and somewhat uncharacteristically for the British (I was told), yelled itself crazy for Frankel’s super effort. Not to mention trainer Henry Cecil.

Actually, however, Ascot has a true capacity far in excess of that day’s attendance. In the most recent Royal meeting, in June this year, crowds of over 60,000 were there. The television coverage of the masses of humanity in the stands, the infield and the various enclosures all along the mile straight, the paddocks, and on both ends of the strikingly beautiful permanent stands, gave any racing fan a thrill.

At the Cheltenham Festival for jump racing in March this year, attendance over four days ranged from 64,000 to 74,000 . . . “almost capacity,” according to management. And that left the media speculating about possibly adding a fifth day to its schedule, “like Royal Ascot.”

I was in London myself this year, late in March, amazed (and pleased) to see abundant advertising for Royal Ascot almost everywhere I went. Even though Opening Day was over two months away! Track managements in Britain clearly don’t take such attendance figures for granted . . . they believe in strong promotion and marketing, at least for their major racing, and undoubtedly their commercial sponsors (of which there are many high-profile brands) do as well.

What I see here in American racing attendance is virtually the opposite. And it’s a grave concern. Have we given up trying to persuade fans to go to the races?

The exceptions here seem to be the Triple Crown races, Breeders’ Cup, some Oaklawn days, the short summer meetings at Del Mar and Saratoga, and the two short Keeneland sessions. As one of racing’s dinosaurs, I admit to living in the past. But when I joined Santa Anita in 1971, I was told by one of racing’s most authoritative figures that I’d never see a crowd of 50,000 at our track again: “Those days are long gone.”  Within five years, however, the Santa Anita Handicap, Derby and Opening Day were regularly drawing well over 50,000. More importantly, our daily average attendance 15 years later, over 17 weeks of 5 days each, peaked at just under 33,000 in 1986. And that was when announced attendance in California was scrupulously honest and audited.

I mention this because now I hear the old pessimism again, all the time, walking through the nearly vacant quarter-mile long stand at Santa Anita . . . that the days of regular big crowds at race tracks, actually any real crowds at all, are long gone. The reasons cited are obvious: Internet, satellite and telephone betting, pervasive competition from other sports and gaming, and the proliferation of all sorts of simulcasting—all disincentives for going to the races.  

What worries me most is hearing track executives and horsemen saying, “It really doesn’t make any difference, not having fans at the track, as long as the total handle’s there, generating purses.”

Actually, I believe it does. Not just because bets at the track contribute way more to purses than any others, and non-wagering revenues are critical to a track’s finances. It’s also an enormous difference for the future prospects of the sport. Where are those future off-track bettors going to come from if they’ve never been to the races? And how about future owners, too—how much fun is it to win a race with a few loud yells echoing through an empty stadium, whether you’re an owner or a horseplayer?

Consider, in geographical terms, that California by itself is 1.7 times larger than the United Kingdom, and a few years ago this state surpassed that entire nation in annual gross domestic product. Competitive gaming and sporting opportunities in the British Isles equal or probably exceed those available in California, at least in terms of access. Yet—I am told—the reason there’s apparently so much more interest in racing there than here is “cultural.” Her Majesty the Queen and all that?

It's true that in many respects Great Britain is the birthplace of all equestrian sport. Queen Anne founded Ascot itself in 1711, official colors were invented and approved in 1783, and then the British Empire ruled the world for so long . . . until it didn’t.  

However, the Belmont Stakes and Saratoga commenced in the 1860s, the Kentucky Derby in 1875, and organized California racing in fits and starts beginning in the early 1900s. For a very long time, racing was far and away America’s most popular sport. That it hasn’t maintained a true competitive popularity here, despite the advent of so much competition, are sheer failures of management, marketing and promotion. American racing’s commitment to sophisticated, creative marketing as an investment, rather than a troublesome expense to be cut, then cut even more, has seriously waned or even disappeared over the last quarter-century.

It's never too late to rediscover and share the magical spectacle of racing. Whatever troubles our sport faces, its intrinsic allure of intersecting superlative beauty, elegance, human and equine athleticism beyond compare, coupled with its enormous array of gaming opportunities, is a marketer’s dream.

As anyone who attended Royal Ascot or watched it on television can attest.  

Alan Balch - Past is prologue?

By Alan F. Balch

Just over 35 years ago – when I was entrenched in California track management – I spoke publicly, and much more vehemently in our private executive confines, about my belief that the racing industry should invest heavily in research and development to meet the competitive challenges to come.  

While we could still afford to do it.

What I had to say then was met with shaking heads, laughter, rolling eyes, and then confined to the round file.  As this essay undoubtedly will be, too.

But the fact of the matter is that the future of racing then appeared dubious to me, even while on the crest of the wave we were riding in the mid-1980s.  The California State Lottery had been approved by the voters in November 1984, and its first tickets were sold in October 1985.  The United States Supreme Court upheld native American tribal sovereignty over the states in 1986, and by 1988 their gaming was beginning in several jurisdictions via compacts with state governments.  Satellite and intertrack wagering throughout California were well underway, and national simulcasting between jurisdictions was “old” then by comparison.   

At that point, we certainly couldn’t have envisioned all the ramifications of the Internet revolution; web browsing began about 1990.  Amazon was founded in 1994.  Websites became prolific.  My own marketing agency even had a Cool Site of the Day on the World Wide Web, and our client Del Mar developed one of racing’s first websites.

In short, it was no secret in 1985, and increasingly understood thereafter, that traditional gaming enterprises, and horse racing in particular, were going to be subject to greater competition than ever before, on a wider and deeper scale.  Shouldn’t we then have been sparing no effort to determine how we were going to innovate and compete in the evolving world?  

I remember citing Ted Levitt’s landmark work entitled “Marketing Myopia,” which pointed out the obvious (every successful business was once a growth enterprise) to demonstrate the not-so-obvious.  What happened to the vastly successful railroads, for example?  Well, they kept on insisting they were still in the railroad business (as opposed to defining the transportation business they were actually in, with all its other opportunities) until they were out of business almost entirely.  

Just think about that for a moment.  And apply it to horse racing.

In some ways, it’s a testament to racing’s strength as a sporting proposition that it has survived at all, or as well as it has, given the onslaught of competition and our continuing ignorance of potential opportunities.

One of my favorite corporate stories is American Totalisator Company, now AmTote.  Imagine what a revolutionary step it was in 1933 to be able instantaneously to calculate and display odds and payoffs, illuminated electronically via giant Tote boards to tens of thousands of bettors!  Based on the Straus patents, it’s no wonder that company had virtually no competition in American racing by 1940, when our sport was far and away this country’s biggest, most successful, and richest of all.  And is that possibly why Straus’ own myopia about what his company was really doing left the door open to its competitor IBM and every other technology enterprise since then?  

Technology now literally rules the world, and racing is becoming increasingly insignificant, a micro-market compared to its position 90 years ago.

My original racing mentor at Santa Anita, Robert Strub, used to warn all of us, “we don’t want to go the way of the buggy whip.”  And that’s what originally got me interested in industry, product, and brand life-cycles.  But heading a public company, as he and his Board did, also caused them to focus more on earnings-per-share-this-quarter, rather than assessing or investing in nebulous future opportunities.  And confronting the real threats we faced, covert and overt.  We didn’t have the discipline to do either.

So, rather than having had a coordinated industry approach developed decades ago to revolutionize betting on the races in America, we now have three behemoths – NYRA, Churchill, and 1/ST Racing/Stronach – battling each other.  They use outmoded ground rules, competing for horses now that foal crops are again at 1965 levels, while field sizes and starts per horse are at or near historic lows.

Here on the island of California, decreasing field size is leading to increasing competitive disadvantage in the national betting picture.  There’s so much hand-wringing you can practically hear it.  Rather than address these complex issues jointly among all organizational stakeholders, with some modicum of sophistication applied to objective data, our ongoing internal blame game has reached unprecedented heights of popularity.  Even though it’s never been a laggard in the ratings. 

The advent of the new Horseracing Integrity and Safety Authority [HISA] may level the national competitive plane somewhat in California’s favor, once our safety protocols become widely observed.  But the fundamental structural problems will remain.

California trainers, owners, tracks, regulators, and key legislators, urgently need to understand and brainstorm the situation we face, together, the same way, at the same time, with the same data.  No idea should be off the table.  Sophisticated purse redistribution and participation incentives, based on level of competition, field size, field content, and surface, should head the list . . . along with potential realignment of racing schedules to fit the horse populations available, joined with robust recruitment programs . . . and critically needed capital improvements at Santa Anita and Golden Gate Fields particularly.

We’ve suffered from a California version of myopia for just short of a century now . . . isn’t it about time to open all our eyes, together?

Alan Balch - Reason and Emotion, Noses Apart!

When Abraham Lincoln was only 28 years old, he delivered his Lyceum Speech, in Springfield, Illinois. When it was published, it was instrumental in establishing the reputation that led to his presidency decades later.  

The remarkable intellect that ultimately saved the United States was already on full display.  He decried “increasing disregard for law,” which he saw pervading the country, and a “growing disposition to substitute the wild and furious passions” of “savage mobs” for the “sober judgment of Courts.”

What can that possibly have to do with today’s racing?

Just this: In commenting on the November 1864 election, which returned him to office only a few months before his assassination, he famously remarked, “Human-nature will not change. In any future great national trial, compared with the men of this, we shall have as weak, and as strong; as silly and as wise; as bad and good.”  

In short, since human nature won’t change, that’s why we need laws, and why we need the rule and process of law, and sober judgment of courts, instead of passion and emotion to define our decisions.

Over the last several years, emotion has threatened to overtake reason in the governance of racing, in several noteworthy incidents. It’s understandable, if not admirable. First, a calamity of national negative attention brought to racing by Santa Anita’s horrid and preventable spike in catastrophic injuries in 2019 brought forth a torrent of emotional reactions. Tempered, just enough, by reason? As did the international pandemic which added enormous economic and behavioral stress to everyone. Then, just as we were beginning to return to a semblance of normalcy, or to hope for it, America’s highest profile professional trainer became—virtually overnight—the supposed symbol of everything cumulatively wrong about the sport.

Wild and furious passions have indeed been unleashed. Again. Will reason prevail?

Many in racing’s leadership, including some among its most elite, seem bent on stoking the fires of what Lincoln called a “mobocratic spirit,” rather than its opposite, “reason, cold, calculating, unimpassioned reason.” Passion, he had declared, is our enemy—the enemy of all free governments.

Rushing to judgment has perennially been among the preeminent weaknesses of human nature, and if Lincoln is to be believed, it will always be so. It’s why we have due process of law in this country, guaranteed (supposedly) as a constitutional right. Most of us are frustrated—always or at least occasionally—by how long it takes to decide the most critical questions, either legislatively or legally.  But “due process” is there to wring as much passion of the moment as possible out of the ultimate decision. And I vividly remember a man decades ago who was finally vindicated in court, after a years-long process, who then said to the media, “Great. Now where do I go to get my reputation back?” So now, in the spirit of unimpassioned reason, let’s reflect on what’s right, valuable and praiseworthy about our last few years.

I remember one of our leaders complaining incessantly for a decade about how long it takes to enact rules in California, owing to the process required by the Administrative Procedure Act. He failed to note that in the benchmark matter of severely curtailing the use of clenbuterol, several years back, a broad coalition of trainers, owners and regulators got that accomplished very quickly—entirely in accordance with the ponderous process required by the Act. And that was even before the more recent crises erupted. 

California has also led the way in establishing many useful and productive reforms that most of us thought weren’t necessary but have proven in practice to be effective and probably long overdue, incenting better horsemanship, a more level playing field and a more pleasing sport for the public.

Was every action taken entirely rational and mandatory? No overreaching? No emotion? Almost certainly not. But, on balance, they have presented a more defensible sport than we had before, without a doubt. More recently, as the State Legislature has seen it politically necessary to “do something,” several matters that are more logically suited for regulators or rules than for law, became statutory.  Emotion nipping reason at the wire in that case?

One thing is certain: Even if we don’t think about it this way, as we should (or haven’t been taught it), our sport has proven again to be interdependent. It’s useless to debate whether that’s a strength or a weakness. It’s a fact. Every entity, every stakeholder group—whether government, breeder, owner, racing association, breed registry, trainer, veterinarian, blacksmith, vendor or participant, bettor or spectator—is dependent on every other one. We’re all necessary conditions for success. Not one is sufficient by itself. And not one is superior to the others. We each have to behave properly, in the best interest of the horse, or we have no sport.

This wisdom applies to each of us. From the lowliest to the highest. It’s human nature. When Lincoln decried mobocracy, he knew that we each share that same nature . . . mobs can rise from the rabble, and all the way to Park Avenue.

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Alan Balch - Toast?

Those of us of a certain age vividly remember Walter Annenberg, friend of presidents, Ambassador to the Court of St. James, master of Sunnylands in Rancho Mirage, and publisher of Daily Racing Form. 

We tend not to remember his criminal father Moses (Moe) or the Chicago and Capone connections integral to the success of the racing wires and Form, leading to his imprisonment for evading over $20 million in U.S. taxes (in today’s currency). For those interested in the birth and ongoing life cycle of American racing, further research would be enlightening. 

Suffice it to say that our sport was once highly lucrative. An oligopoly, and even monopolistic in some respects. 

Tycoon Warren Buffett, now styled “The Oracle of Omaha,” long ago teased his audiences by asking them to name the nation’s most profitable newspaper, having little advertising, costing the buyer a dollar when other papers cost a dime. He started out as a teen-aged publisher of his own tip sheet, was ruled off for not sharing his proceeds with the track operator—a student of “speed” vs. “class” handicapping. Most of those at his feet had no idea that he was talking about The Morning Telegraph, which was succeeded by the Form, of course. 

In the many decades since, Buffett’s investing led him far, far away from speed and concentrated on staying. He took a cue from the Annenberg son, whose Triangle Publications was founded on what Walter termed “essentiality.” Anyone seriously interested in business had to have The Wall Street Journal; in horse racing, the Daily Racing Form; in television, TV Guide. For the nation at large, two of the three were essential. Even the Form was essential, in the sense that no other sport, early on, permitted legal betting on its contests; any bet on a race, without critical information, was literally uninformed to a significant extent. In the early days, racing was undoubtedly America’s leading professional sport. 

Until recently, Buffett was a major investor in newspapers, and one of his first jobs, along with that track publishing stint, was as a paperboy. Over a decade ago, he bought 28 local papers for $344 million. In 1977, he had gotten The Buffalo News for $36 million. Lately, he sold all those at a loss, although financing terms of the transactions may make him better than whole in the long run. 

In a 2019 interview with Yahoo Finance, he described the evolution of newspaper publishing, along with the essential nature of local news and advertising, and how the business had changed. “It went from monopoly to franchise to competitive to ... toast.” Gulp. 

That racing and its place in the gaming universe also have been dramatically changing isn’t exactly a secret, right? Or unforeseen, long before now? New York OTB was authorized in 1970. The New York Lottery had begun in 1967. Out on the island of California, its state lottery was authorized by a vote of the people in late 1984. Despite its 50% takeout, giant payoffs to the brain-dead and a very few with real luck began luring our clientele away the next year. 

While we in racing haven’t exactly been asleep, maybe we’ve been dreaming ... that somehow this reality would never actually bite. And chew. That simulcasting, satellites, ADW and sports betting would see us through? And just exactly how would that work? Decades, literally, largely have been wasted. Racing’s leaders could have invested wisely in research, development, and acquisition, dedicated to competing successfully in the evolving world of gaming. There was a time when we should and could have better marshaled our financial resources for critical future orientation. 

Not to mention keen, deep appreciation for our unique selling proposition in the gaming world: the horse. 

The last time the North American foal crop was under 20,000, as it is now, was 1965, but then it was on an upward trend. That year, the average field size was stable at just under 9 horses per race. In 2019, it was 7.5, or a decline of 17%. Average annual starts per runner has declined from 11 in 1965, to barely over 6 in 2019, or about 45%. In California alone, 3,365 races were run in 1965; in 2018, 3,874. Make sense? 

Most industries use similar objective data to guide decision making and policies. We do not. Despite our fans’ mania over the most minute data to drive betting! Is it any wonder we face the most uncertain of futures? 

To make matters still worse, greater and greater numbers of the declining stock of horses are increasingly concentrated in fewer and fewer hands, leading to far less attractive betting contests for the public. Racing associations, governing bodies and horsemen’s organizations seem reluctant even to discuss, let alone act on, what the data present. For racing to have a serious chance to flourish again, stall limits on trainers must be gradually but increasingly implemented. A far broader distribution of horses among trainers is essential to growing field size and enhancing our fundamental game. The business reasons are starkly clear. 

But that’s only one essential tactic in what should be a strategy based on all the intellectual capital the entire industry can assemble. 

So, do I believe we’re toast? No, not necessarily ... racing will continue, survive and possibly thrive. 

However, true prosperity is only ours if we remember, no matter the obstacles, the fundamental reasons for our sport’s adaption to change through the centuries. Its foundation is the majesty and attraction of horses to the vast public, and the socialization our shared affection inspires. In turn, that requires vigorous commitment to equine welfare, allegiance to the principle of breeding a better, sounder horse, and genuine, loving, sincere observance of good horsemanship. 

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Alan Balch - "Socialist impertinence?"

By Alan F. Balch

“On, no,” you’re saying to yourself, “not more politics!”

But stop and think: American racing is and has been since the 1930s essentially political, since it’s a state-regulated industry. It’s about to add another layer of government regulation, now that in their mutual wisdom The Jockey Club, United States Congress, and former President of the United States have just enacted new legislation to elaborate racing regulation still further. And complicate it?

The last time I wrote about subjects I’m going to raise again here, I was accused by one of our most prominent readers of being a “socialist,” and that sprang to mind when I was assailed the same way very recently by another prominent personage. I know that one of them is a strong supporter of the new “Horseracing Integrity and Safety Act,” or HISA.

My former students at Harvard College would get a serious jolt out of that accusation; they used to call the classes in Government I taught “Firing Line,” after William F. Buckley’s right-wing conservative television program of the day. I once read aloud to them paragraphs from a Lincoln Day speech delivered by a prominent politician, and largely written by one of my academic mentors who had been showered in infamy for his work with Barry Goldwater. I didn’t tell them that, of course. And then I asked them who they believed delivered those ringing sentiments.

“JFK,” came shouted back. “FDR. Justice [Hugo] Black. Justice Douglas.” Liberal lions all. Then I read another famous line from the same speech, about the “nattering nabobs of negativism,” and they all realized the parts of the speech they loved had also been delivered by one Spiro T. Agnew, former Vice President of the United States.

Labels, like stereotypes, are diversions from objective analysis. As we assess what ails our sport, and ideas to improve it, labeling a person or an idea “socialist” (or anything else) is just plain counterproductive. We have to confront objective reality and consider all possible corrective means.

A hundred years ago – when this really was the Sport of Kings -- it relied then as it still does now on all the commoners. Both kings and commoners love to bet, but there are way more of the latter than the former, and now a great many owners are commoners, too. Back then, virtually everyone recognized that a sport so afflicted with temptations to dishonesty and corruption needed serious governmental oversight if it was to survive and prosper. Yet our racing forefathers were hardly “socialists”!

So were born pari-mutuel wagering, the totalizator, and testing for forbidden substances, among countless rules across dozens of American states to build and retain public confidence in the integrity of our sport. Does such government intrusion and oversight smack of “socialism”? To some or many, yes. And they bring with them their own problems of potential misconduct and unfairness in administration. Whether king or commoner, whether citizen or government official, we all share one thing: human nature.

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Alan Balch - “The trainers"

By Alan F. Balch

Over the last 65 years, since I first was a horse-crazy kid, doing anything I could to be with these animals, I’ve spent an inordinate time around horse trainers.

To begin with, it was simple hero worship.  Why, why, why . . . it seemed like every time I opened my mouth, that was the first word out.  Why does a horse do this or that?  Why do you do this or that?  Since most of my time was spent mucking, feeding, watering, cleaning, raking, brushing – and relatively little time doing what I wanted to do much more, riding – I had plenty of time to observe and wonder.

Looking back now on those earliest days of my equine consciousness, I guess it should be said that the best trainers are patient.  With children (and fools) like I was (and am).  And with their horses, which one famous horseman described to me as like “the dumbest child you might ever be around.”  And he meant that in a positive way.  

The first horses I knew were not even what I might have later called park hacks.  But I was in awe of them.  I remember their names, just as you would:  Joe, Maude, Sugar, Ginger, Marine, Banjo, Elvis, Sunburst, and a dozen more, including my favorite, Sox, who was a refugee from some race track, somewhere.  They were rented by the hour, to sailors on the shore in San Diego, for birthday party rides, and matrons who had grown up in high society and their children.  In those days, the 1950s, “horseback riding” was a thing to do, and rent stables abounded . . . to the professional trainers who owned and ran them, they were a gateway to the show ring, to competitive riding, and to clients with money.

By the early 60s, I had also discovered the race track at Del Mar, earlier at the horse show during our county fair, then the races and summer sale, which brought layups and yearlings to be broke to the stable I worked at in La Jolla.  Race horses that were too slow but still sound were the primary source of hunters and jumpers and dressage horses in those days.  Horses from the major California tracks that had ultimately been relegated to Caliente, across the border, or to the many auctions conducted in those days, found their way to the show ring.   Including my first competitive horse, a gray gelding by Mahmoud, bred by Mervyn LeRoy, who had topped the Keeneland sale as a yearling.  As I learned on my first day working at Santa Anita much later – when I discovered chart books and the American Racing Manual -- he also once had held the course record there for about a mile and three-quarters on turf, in 1954. 

Until a little over ten years ago, in racing or otherwise, I was always a suit – I never had worked for a trainers’ organization, although I had been in plenty of intense negotiations with horsemen’s groups from time to time, and had owned any number of horses to ride and compete myself, but not to race.

So, I now know about horse trainers, nationally and internationally, from almost every perspective, through many decades of experiences.  And if there’s one thing I’m certain of, it’s that those individuals in politics, management, or the media, or as regulators, or administrators, who speak of “the trainers,” just don’t know what in hell they’re talking about.

Stereotypes of any category of people (or horses) may be entertaining or malicious, but are likely dubious in the most important respects.  That word comes from the Greek – and literally means a “solid impression.”  Those who traffic in stereotypes often use and enhance them viciously, as we have come to learn.  Sadly.  Repeating such stereotypes endlessly only makes their “impression” more solid.  Just ask a lawyer.  Preferably one with a sense of humor.

“Get a group of ten horse trainers to discuss any subject and you’ll get at least a hundred opinions.”  There’s more than a germ of truth in that, and I console myself with it when I hear management or regulators or journalists pontificate about what “the trainers” will do or say or believe in any instance.

Early in my days representing California trainers, I remember vividly the reaction I got when I spoke of the “intellectual capital” the professional horsemen might bring to a problem we were facing.  An outburst of laughter and head-shaking greeted that!  One prominent owner we were meeting was even more shocked at my reaction.  I told him it might not be the same kind of firepower he was used to dealing with in his boardroom of fellow millionaires, but it was just as valuable and even more so when applied to horse racing.  After all, I lectured, didn’t he spend a literal fortune on horses?  Didn’t he then place them under the care, custody, and control, of a “mere” horse trainer?

To those of us who know and really like horses, trainers deserve and receive our undying respect and appreciation.  And I’m not mainly talking about the exceptionally rare individuals who have achieved fame and riches . . . because, just as with horses, Mother Nature only makes a relative few with that kind of talent (whether in horsemanship or otherwise).  Fortunately, She makes relatively few scoundrels, too, whether equine or human.

No, it’s the overwhelmingly large number of trainers you’ve never heard of that I’m talking about.  The people that commit themselves and their help to their horses 52 weeks a year, at all hours day and night, every day.  They run small, unique, difficult businesses that never close.  They deal with all the human problems the rest of us do, and an unfathomably large number of equine risks, issues, and behavior – and that of their owners -- mostly without complaint.  

Why do they make this commitment?  Why is this the life they’ve chosen?  

The next time you hear someone bash “the trainers,” please tell them the answer.

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Alan Balch - Trainers’ rights?

By Alan F. Balch

Justice—and injustice—are as old as humanity. Our contemporary ideas and standards of fairness trace all the way back to the very beginnings of recorded history, whether in Egypt, Greece or Rome.

“Lady Justice” appears at courthouses and law schools almost everywhere, although few of us take the time to see what she symbolizes. The scales of justice connote impartiality, the weighing and balancing of the sides to any issue. The sword, usually unsheathed, commands respect, and means there’s no justice without enforcement of a decision. A double-edged blade protects the innocent as well. The blindfold—a relatively contemporary addition—stands for objectivity and is a barrier to connections, politics, fame or wealth influencing an outcome.

The evolution and role of justice in racing are more ambiguous. Even though King Henry VIII (or possibly Lord George Bentinck) famously declared that “all men are equal on the turf, and under it,” such an opinion has rarely if ever applied to the discipline or behavior within our sport’s community. It’s probable, in fact, that the description of the lowly being “called on the carpet” originated in racing:  when the grand poohbahs or stewards of the Jockey Club in England confronted an offender to the regular order of behavior who deserved a scolding. Or worse.    

In my own time, dating back only 50 years, I’m ashamed to say we in track management used to laugh that the Constitution of the United States applied everywhere except within a race track enclosure. For better or worse (and in the earliest years of modern racing during the Great Depression, it may well have been for the better), to speak of “rights” for anyone other than the track ownership and stewards was anathema. But in those early days, as the only organized sport or activity with state-sanctioned and legal betting on the outcomes, amidst a sea of economic deprivation, hardship and blossoming organized crime, preserving racing’s integrity seemed to demand draconian rule.   

In California, one steward was appointed by management—one by the State of California—and those two selected a third. Needless to say, the track had the upper hand in all decisions and discipline. It was the mid-1970s before things started to change, gradually at first. Still, when the major tracks had multiple applications from horsemen for every available stall, and many major owners still had private trainers, we weren’t living in a “civil rights” paradise for anyone—whether customers, horsemen, or backstretch denizens.

By its nature, with enormous sums of money involved, in betting, purses, real property and bloodstock values—not to mention public economic impacts and multipliers far beyond any individual track or farm—racing required (and still requires) meticulous statutory and regulatory oversight. The law is there, and the rules are there to protect and enhance the public interest, including the economy. In California, that means the Horse Racing Board (CHRB) is empowered to supervise all of it. Politics may enter, of course, because the governor appoints its commissioners. But until the 1970s, CHRB had only three members . . . increasing politicization came during years of expansion and labor strife as it grew from the original three to five to the current seven appointees.

Nowadays, trainers everywhere, not just in California, are justifiably concerned with methods of rule enforcement and their legal protections (or lack thereof) as they prepare and race horses under greater public scrutiny than ever before. Are they entitled to meaningful fair procedures when their conduct is questioned or criticized, not just in the rule enforcement process, but generally? Can they be protected from scapegoating in a sport that is fundamentally reliant on risk, and inherently hazardous, involving precious animals?

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Alan Balch - Horsemanship 1a

Horsemanship 1a – by Alan F. Balch

Anyone who has witnessed the saga of racing at Santa Anita this winter needs no repeated recitation of the facts . . . to say that the sport as we have known it is jeopardized in California, and perhaps North America, is a gross understatement. It’s worth remembering that the very word—jeopardy—is derived from gaming; when a position in chess and other games is equally divided between winning and losing, there’s danger.

Just how endangered we are, only time will tell.

So, of course, The Jockey Club released “a major white paper.” But like all the other stakeholders, they couldn’t resist pointing at everyone else except themselves. Again we heard their self-serving, political, and self-destructive refrain that “race day” and other therapeutic medications are culprits for what ails us. They threw in unspecified “cheaters and abusers” for good measure, as though that’s the public face of racing we embrace! All this, despite the simple fact that in the same state, during the same months, with the same medication rules as at Santa Anita, with the same or worse weather, another track—under the same ownership—maintained its position as one of the safest courses in America. Doubtless it escaped The Jockey Club that the all-weather synthetic surface at Golden Gate Fields was a principal factor in differentiating the two tracks!

But it hadn’t escaped anyone knowledgeable in California that main track and turf maintenance at Santa Anita beginning in January, as well as management of the racing program itself, may have been seriously flawed. And that the inherent issues are far greater than any isolated, dramatic spike in serious injuries at one place.

Therefore, it’s now essential, especially for the sport’s leadership, to go back to the objective, unemotional truths of basic horsemanship—not self-defeating posturing—to try to see where we stand throughout the world.

From the beginning of horses in sport, which is to say at the beginning of recorded history, the objective was to breed and train a swifter, stronger, better horse. For all this innocent animal’s many gifts to humankind, whether in work, commerce, war, exploration, sport, art, pleasure, or otherwise, horsemanship must begin with breeding. Responsible, logical breeding.  

Racing simply demonstrated who could breed a better horse. Glory followed. And later, riches. Racing stock is the proof of breeding stock.

The Jockey Club’s principal purposes are to improve the Thoroughbred breed and protect its integrity. It’s the breed registry. It sets the standard for breeding. At least it should. But that’s where our problems really begin, because the Thoroughbred breed is based on genotype, not phenotype. The genotype is the set of genes a horse carries, and our breed registry protects “integrity” by taking elaborate steps to be sure that there are no stray non-Thoroughbred genes in our horses. The way things are going, we might well need some!

The phenotype, on the other hand, is all of a horse’s observable characteristics—its conformation, quality, substance, and soundness. Who is guarding or enhancing the conformation, quality, substance, and soundness of our Thoroughbreds? Apparently not the breed registry! The next “white paper” we need to see from The Jockey Club about “reform” needs to take a deep, honest look at best practices for breeding, foaling, nursery, and every medication or veterinary practice that gets a Thoroughbred sold, whether or not in the auction ring and beyond. Any breed registry that permits, tolerates or encourages the breeding of unsoundness to unsoundness is not breeding a better horse, that’s certain. Nor should the registry turn a blind eye to any cosmetic or medicinal practice that could possibly compromise substance or soundness.

If the registry will concentrate on the true integrity of the breed—its soundness—it won’t need to waste nearly so much breath on the conduct of others.

Those of us who grew up in non-racing horse sport all remember The Sportsman’s Charter. It proclaims that sport ceases when it becomes a business only, something done for what there is in it. “The exploitation of sport for profit alone kills the spirit and retains only the husk and semblance of the thing.”  I believe this is exactly what’s been overtaking racing (killing it) for decades now.

There’s a reason that Keeneland and Saratoga and Del Mar succeed and inspire: their profits are turned back into the sport. They race limited seasons of the highest quality. They don’t exist for return on investment, except for the sport itself. But The Jockey Club boasts of its “group of commercial, for-profit subsidiaries and commercial partnerships.” Presumably those profits should benefit the sport. Do they, if protection of live cover, stud fees, auction prices, unsound pedigrees, and bloodstock profiting are weakening the breed? Do they, if their own professional journalists are muzzled? Do they, if their contributions to the U.S. Congress are wasted on the fool’s errand of banishing Lasix?

The for-profit racing associations and affiliated entities, whether public companies or private, exert the most pressure to exploit our once-great sport financially, all in the name of return-on-investment.  Consider this: At around 20,000 Thoroughbred foals a year these days, the foal crop is about where it was in 1966. In that year, Santa Anita raced 11 weeks. California racing had no overlaps between northern and southern dates (except during the summer fair season). The majestic colossus that is Santa Anita was dark from April until Christmas.  

Now, with the same number of foals as 1966, California has year-around racing throughout the state— north and south simultaneously. Santa Anita by itself races about 32 weeks. Can that much racing possibly be in the best interests of horses and the sport?

The collision between those interests and unrestrained financial gain is palpable. All those of us who have turned a silent or blind eye to this, including me, cannot avoid our own blame for what has happened. We have not put the interest of the horse or the breed first, as basic horsemanship would teach us to do.

Speaking of which, there’s another trumpeting elephant in our midst: the whip.

All those of us who can still remember our first serious riding lessons know we were taught not to get on without a stick. Then came the hard part: how and when to use it. Over the thousands of years of horses serving humans, understandings and opinions about this have evolved, to be sure. The humane, sensible use of the stick is probably more debated than ever before.

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Alan Balch - Compete!

Not too long after this esteemed magazine published my last essay, one of my "admirers" contacted me with her own opinions.

“You’re so smug and condescending,” she said.  And went on to berate me for “never” doing anything except calling attention to problems, “never” offering solutions, “never” recognizing that it’s a far, far different world now than in my relative youth.  And I’m “always snarky” besides.

I now rise to the challenge of trying to put some (more) solutions out there, in a little better detail than I’ve been able to do before, so fixated have I been on the problems we’re facing and their contexts.

A leading executive of The Stronach Group, one of the three principal behemoths controlling American racing these days (the other two being New York Racing Association and Churchill Downs), was quoted as saying that “there is about $11 to $12 billion bet annually,” and that the national total has not been growing, even though Gulfstream’s handle has.  “It’s our job to get that money and lift the handle at Stronach tracks.”

There, succinctly, is the problematic perspective of our leaders.  They are concentrating on what’s called racing’s market share – one small segment of a total market – and their own respective shares of that segment, instead of on growing the racing market’s total overall.  The broader American gaming market is far, far bigger than just racing’s share. According to Casino City Press, annual U.S. gaming revenue (not handle, mind you) is around $106.4 billion. Across the U.S. and Canada, race and sports wagering revenue (again, not handle) is only 2.25% of the total, and declined by 4.5% in the last year.  All other sectors rose . . . they are casino and card room gaming, lotteries, and tribal gaming, along with on-line and charitable gaming.

What I have previously referred to as “positive competition” among racing’s ownership oligarchs is essential for our future, and essential for true growth.  That word – oligarch – has really negative connotations these days, owing to our toxic politics. But I’m using it in its literal, non-pejorative sense – government by the few.  Racing worldwide has always been an oligopoly (yes, always). It’s just that now there even fewer oligarchs than ever before.

Consider that in California over the last half-century, our previous oligopoly has contracted drastically. All Harness racing is now controlled by one association, and a separate one controls Quarter Horses.  One additional entity controls two-thirds of Southern California Thoroughbred racing as well as eighty percent of it in Northern California. That doesn’t leave much for the couple of other oligarchs here!

This transition in contemporary American racing to an ever narrower oligopoly has taken place throughout the continent, owing to economic circumstances including vast and ever-increasing competition for the gaming dollar as well as skyrocketing real estate values in urban markets.  No secret there. And no judgment, either . . . business decisions must be made on the basis of facts and return on investment, not emotion. Like “love of sport.”

So here’s what must be done to have a prosperous future:  our remaining racing oligarchs must invest heavily in marketing for future growth, and not just scrap over their relative shares of a contracting market segment.  They can do both, simultaneously. They must do so now, while they can still afford it. Strategically. Their forebears should have been doing this for at least the last 25 years; if they had, we would have more of them left today.

There’s one and only one way to grow: compete.  Compete in the open marketplace for more of the total gaming market.  Since we have the best game of all, this seems elementary to me – but we also have the highest fixed costs of any sector of the gaming market.  So we have to do much better, smarter, more efficient marketing than our competitors.

Yes, we have to manage our properties properly, including catering.  But success at marketing racing is not dependent on that! Or on “special events.”  In fact, the total market for restaurants and entertainment is even more enormous than the gaming market, so the thought that accentuating anything other than the gaming aspect of the racing experience is likely to succeed is . . . uh . . . foolish.

Our superior gaming product is now constantly available in essentially all households, via telephone and television.  That’s a relatively recent development. But I would venture to say that not even 5% of total households are even aware that they could bet the races that way if they wanted to, let alone know how to do it.

There’s only one way to change that: hard-nosed, hard-sell, aggressive marketing . . . especially intensive (and expensive) mass-media advertising.  The days are long gone when the on-track experience had to somehow be “protected” from cannibalization. Even though we need more than $2 bet away from the track to make up for $1 lost at the track, advertising must be developed and pursued that reaches the masses with a message stimulating interest in our sport, and the betting that fuels it, both at the track and away from it, simultaneously.  Growing our share of the total gaming market.

Wave after wave of new gaming competition has washed over racing in the last 30 years, as we have stood relatively still; the sports betting and cloud-based gaming breakers are rushing toward us.  Our remaining racing leviathans now must each open their wallets wide and invest whatever it takes to advertise our game intensively and ingeniously, mainly through television, throughout America.

Competing that way among themselves – both to our existing and vast potential new markets – is the only productive way forward.

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Alan Balch - "You never know..."

“You never know how much you can do until you try to undo what you just did.”

 So proclaimed my old riding teacher, one of the world’s greatest horsemen. Constantly.  He was talking about teaching and training horses, of course, but the same wisdom applies to business, all business, and in our case, the plight of racing today in America, especially California.

We have made so many mistakes, and taken so many wrong turns; that we seem to continue to do so is of constant wonder to me.  And I include myself in the “we,” since I was part of track management for so long, and for the last eight years have been leading the staff of California’s trainers’ organization.  I’ve had an up-close chance to see what’s been happening since 1971, in one role or another.

I readily confess that in my early days, although I came from a horse background, I shared the prevailing management view that “the horsemen” – meaning owners and trainers combined as they were in one California organization in those days – just did not (and quite possibly could not) understand the decision-making process we went through in track management.  In my first few years, racing at Santa Anita was threatened as it had never been before, due to a combination of circumstances. Its future was cloudy. Return on investment from our 440-acre property was grossly insufficient, especially for a publicly held company. Our stock price was suffering. The horsemen didn’t understand the necessity for our development of about 110 acres for a regional shopping center that would provide year-round income.  About 20 weeks of racing a year couldn’t carry the whole load.

That was my introduction to “analytics,” but it wasn’t called that at the time.  In truth, I don’t remember what we did call it – possibly just cost-benefit analysis.  This was before pocket calculators were in significant use, long before personal computers and their spreadsheets and models.  My boss, a Kansas Jayhawk engineer named Ray Rogers, always had a slide-rule in his jacket pocket that he would produce to do instantaneous calculations in planning meetings.  Most people now don’t even know what a slide-rule is. Or was.

Track owners and managers simply had to be the ones to prioritize, inform, and make the decisions, we argued, because our investment was enormous by comparison to an individual horseman’s; ours was long-term and illiquid.  The business was really owned and directed by the tracks. Horsemen, particularly owners, might make major investments in bloodstock, to be sure, but they came and went. Trainers might consider their profession a livelihood, but were perceived as agents of the owners and therefore less consequential no matter how annoying (and persuasive?) their opinions might be.

California racing enjoyed a long-term relative prosperity (even a boom) from the mid-seventies to the early 1990s.  In my view, that era of health was based on balanced rivalries as well as competition among the track managements throughout the state to invest in their facilities and market them aggressively.  For the most part, it was a positive competition, although the various track leaderships didn’t exactly love each other. I heard plenty of grumbling about how much more money we could make if this or that particular track would just understand more sophisticated business analysis and pricing, for example.  And we were all living in a regulated environment, of course.

Ironically, our California industry wheels began to wobble when for numerous reasons the horsemen – the relatively inconsequential stakeholders, supposedly – were divided by statute into two separate organizations of owners and trainers and, due to litigation among trainers, stall limits were banished.  In addition, the owners, who also claimed “ownership” of the purse fund, were therefore provided serious statutory oversight and even approval of what theretofore had been racing association prerogatives.

That intrusion by owners, or complication for the tracks’ planning and decision-making – just as monumental threats from the proliferation of Indian gaming, simulcasting, the Internet, and telephone wagering advanced on the gaming multi-verse – caused every wheel of California’s industry to wobble even more.  The economic regression of 2008 witnessed the most serious contraction of the sport in its history.

I have no doubt that leaders in the legislature, the regulator, the tracks, and the horsemen’s organizations have been well-intended.  But what happened to using objective analytics prior to making critical decisions? Business is way beyond and above the slide-rule era!  Endless proliferation of exotic and high-takeout wagers, takeout adjustments themselves, reductions in minimum betting denominations, reduction or elimination of admission and parking prices, discontinuation of investments in marketing and the backstretch, simultaneous and enormous increases in prices for food and beverage and box seats – all these things and more must have sounded like good ideas to someone.   But it’s hard to believe they were based on carefully considered forecasts and cost-benefit analysis, or developed by those who really understand horses and racing.

Analytics.  Yes, analytics.  We were almost certainly the first sport based on analytics, and at least one fortune was made on developing the analytics that enabled horseplayers to bet the races with greater and greater confidence by their publication in The Daily Telegraph and Daily Racing Form.  

Is it too much to expect our leaders to apply serious analytics to the decisions made that define their future, and ours?

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Alan Balch - Achtung!

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Published in North American Trainer, Winter 2017 issue.

Now there’s a word to get your attention.  For those of us of a certain age, it comes freighted with emotions from our parents, who fought World War II.  As well as from countless movies and books whose characters would shout it at hapless suffering minions.

But it’s really a simple German word meaning just that, “attention,” although sometimes translated to carry “danger” along with it.  Here, I mean it both ways.

During this championship season in America every year . . . and the northern hemisphere . . . we’re treated to such definitive racing, including the Arc and British Champions Day.  Then the Breeders’ Cup, while still not really the “world championships” worthy of genuflecting, is a wonderful showcase of the sport.  Ending the calendar year gives us a chance to take stock of where we stand, what has changed, what hasn’t, and where we’re going...

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Alan Balch - Self-interest rightly understood

“Is that really in the best interest of the horse or the breed?  Is it justified by anything other than economic interests of the few as opposed to the many? ”

FIRST PUBLISHED IN NORTH AMERICAN TRAINER AUGUST - OCTOBER 2017 ISSUE 45

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When Viscount Alexis de Tocqueville journeyed from France to philosophize about “Democracy in America” in the early 1800s, he didn’t have racing in mind as he developed his observations on that distinctly American virtue of self-interest rightly understood.  Over the last half-century, however, I’ve often thought of them as I’ve observed the evolution of our racing, particularly in California, first from the standpoint of track operators, and lately from the standpoint of horsemen.

I was originally a suit with responsibilities of marketing and managing Santa Anita, later adding Golden Gate Fields and Bay Meadows.  I brought a perspective to my work that began with horses, since my earliest profession in the sport was handling their cleanliness and bodily functions.  As with so many of us.  I always wondered at and about the majesty and attraction of racing to the masses, over centuries, which seemed to survive and prosper despite our many gross mistakes and calamities in its management.

Wherever in the world you look, racing has been a regulated sport from its very earliest days.  Which is to say that governmental authorities learned almost from day one that complete freedom in its operation would lead inevitably to scandal and swindle involving one participant or another.  Most often, the “public” would be victimized; this led to regulations constantly citing the “public interest” upon their promulgation.  And that, in turn, led to innumerable scandals and swindles based on various official scoundrels reaping their own harvests off unsuspecting victims, always in the name of the “public interest.”

I cite this sordid history not to entertain but to educate:  what is loosely referred to as “the free market” doesn’t exist in contemporary racing.  If it ever did, in fits and starts, it was squashed, altered, or hindered.  By statute, regulation, and rule.  Even the vaunted principle of caveat emptor, which is the mother’s milk of buying and selling horses, has been under assault by regulators and governments forever.  Yes, the buyer should beware, but first let us accord him the government’s “protection” in all kinds of ways (just read the fine print in any sale catalogue), and provide him access to courts if he still claims to have been unaware of his risks.

And then there’s the routine interference in the “free market” by stud books themselves, and their own rules.  Let’s see now . . . requiring live cover?  Is that really in the best interest of the horse or the breed?  Is it justified by anything other than economic interests of the few as opposed to the many?  The very idea that there are true free markets even for our breeding and selling is sheer nonsense.

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Alan Balch - War of the Worlds

First published in North American Trainer issue 43 - February to April '17

Alan Balch - Interest and conflict

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First published in North American Trainer issue 42 - November '16 to January '17

Alan Balch - Marketing and Management Myopia

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This article appeared in - North American Trainer Issue 41

Alan Balch - Geese and Greed

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