Alan F. Balch - Anticipating necessity

Looking back over 2019, it seems to me this has been The Year of the Bromide.  Our own annus horribilus in so many ways, including having to endure so many of those truisms, many of them dubious, owing to racing’s regrettable circumstances.

“Whatever doesn’t kill you makes you stronger.”  “The darkest hour is just before dawn.” “There is no I in TEAM, but ME is in there somewhere.”

And my own personal favorite: “Stress is the confusion created when one’s mind overrides the body’s basic desire to choke the living s**t out of some a**hole who desperately deserves it.”

So, yes, if there’s one thing we’ve plenty of, it’s stress.  As an enterprise, humor aside, all of us in racing are stressed as never before; not the least of that stress is trying to determine what’s been happening, why, and how we can correct our course.

It seems to me that the root of our problem is cultural.  Other sports, when distressed, can resort to multiple remedies including constant rule-changing when faced with fundamental problems.  Tennis invented the tie-breaker to eliminate endless boredom.  Basketball adopted the three-pointer for excitement and closer competition.  Baseball re-organized its leagues, designated hitters for pitchers, juiced the ball, defined wild card teams, and improved drug testing.  Football is finally concentrating on player safety . . . too late?

But we have an animal to nurture and protect.  We’re fundamentally different from all other sports.  How human culture treats animals has been evolving since the beginning of time, and that won’t stop.

In horse sport, we who have always preached animal welfare are now confronted by those who no longer speak in terms of humane husbandry, but instead of animal “rights.” Football players choose their game; horses do not, even though they’re bred for it.  Racing’s rabid enemies vehemently argue that “no animal can be required to participate in any activity without its informed consent.”  Seriously.  That means your pets and even your choice of food are at risk, according to these advocates, not just horse racing. And any leisure activity involving a horse or any other animal.

Absurd, you say?  No, it’s not.  I’ve been in front of several governmental authorities this year when these arguments have been made.  And have been received seriously and solemnly.  They underly, stimulate, and spread the entire worldwide opposition to racing we are seeing more and more every month.  Our experience and the media coverage of it at Santa Anita this year, and elsewhere, has given our enemies a platform and influence with media and journalists they always had but never before could exploit as they do now.  We belittle them, fail to understand them, and ignore these arguments and their consequences, at our peril.

A year ago in these pages, I actually praised The Jockey Club’s annual Round Table, for a change, on its enlightening and productive conference.  This year, I wish I could do the same . . . but with one exception, that’s impossible.  

The industry had a rare opportunity this August to listen to an expert who should also have been understood deeply:  David Fuscus of Xenophon Strategies, which deals with crisis management and communications.  Anyone whose company is named for the founder of horsemanship and cavalry command is someone we should take seriously.  The complete transcript of his remarks is readily available.  

After pointing out that every crisis, however dangerous, offers opportunity, he stated very simply that “the first rule of crisis communications is to end it.”  That is, end the crisis, take the actions necessary to correct the situation, and then clearly communicate that to the public.  But most often, he said, industries don’t “end it” because they don’t observe one or more of the four fundamentals he then described:  engagement, transparency, responsibility, and meaningful actions.

After detouring through non-racing case studies for illustration, he pointed out that many elements of racing are engaged on the current crisis, but not coordinated on a clear message or solution.  As to transparency, there is no unified narrative, so we’re perceived by the public as “cloudy.”  While we admit to being responsible for a problem, we don’t actually define or even agree on just what it is.  Meaningful actions?  We are a long way from ending the crisis, despite the serious steps begun in California and replicated elsewhere to improve safety.

Here, then, was a golden opportunity for The Jockey Club to set out explicitly what should have been and needs to be done. As an expert, who understands racing, Fuscus could have helped us understand and begin developing the fundamental “engagement” he said we required.  But what happened?  Instead, he pitched the Horse Racing Integrity Act, as did the following two speakers, one from the Humane Society of the United States (HSUS).  Each was at great pains to try to connect that same old, divisive Jockey Club legislative project (which deals exclusively with an authority for uniform national drug and medication rules) to what ails us now.  That can’t be done, at least in anything close to the bill’s present form, which even detracts from the engagement, transparency, responsibility, and meaningful actions we need!  Moreover, eliminating race-day Lasix and funding the United States Anti-Doping Agency would not improve our safety metrics, and might well even worsen them, all the while calling more attention to our sport’s supposed “cheaters and abusers.”

Was it a coincidence that the 2019 version of this legislation was introduced March 14 in Congress, simultaneously with California’s United States Senator and Santa Anita’s Congresswoman in Washington calling for racing at Santa Anita to be stopped?  I doubt it . . . since the HSUS political operatives were working over Congress in support of that legislation at the very same time Santa Anita had been closed for track renovations.

Does anyone seriously believe that the enemies of racing wouldn’t see through the smokescreen of that federal legislation in a heartbeat, were it even possible to enact, and could turn its passage into the rightful accusation that it does absolutely nothing to improve safety?  Worsening our perception problems?

To achieve true engagement of the entire American racing industry on this crisis, The Jockey Club, National Thoroughbred Racing Association, Breeders’ Cup, National HBPA, Thoroughbred Horsemen’s Association, California Thoroughbred Trainers, Thoroughbred Owners of California, New York Racing Association, Churchill Downs, The Stronach Group, National Turf Writers and Broadcasters Association, Association of Racing Commissioners International and each major racing state’s commission, should be invited immediately to appoint delegates of racing’s wisest and most experienced to a leadership council.  Unwieldy?  Maybe not so much – there is so much overlap and duplication among many of these organizations that preliminary conversations could well lead to a manageable number.  In any event, the first task of these Supreme Overseers would be promptly to elect a much smaller, more effective steering committee to organize an exceptionally serious closed-door brainstorming and consensus-building strategy summit prior to the end of this year.

Engagement is job one, remember, to coordinate on clear messaging and solution development.  Everything else flows from that.

And remember too, as I’ve written before, that we are in this situation because of our increasing failure over decades to observe the most basic principles of horsemanship and racing management, and adapt to cultural changes.  Breeding a more substantial, sound horse is fundamental to its welfare; so is that horse’s proper management and the proper management of the conditions under which it is raised, trained, and raced.  There is enormous room for improvement in these basics.

As daunting as those tasks, or more, is grappling with public perception.  The culture of “animals are people, too” no doubt started with human domestication of and care for animals.  That began with dogs around 15,000 years ago, researchers say, and other animals around 12,000 years ago.  It no doubt seemed only “natural” to begin naming particular domesticated animals and even ascribing human characteristics to them.  What we now call “media,” beginning in the early 1900s, intensely stimulated this process:  Felix the Cat was “born” in 1919 and Mickey Mouse in 1928.  Motion pictures and the advent of “talkies” literally gave these animals humanistic lives, and the race to anthropomorphize virtually everything was on.
Think of it:  we started naming mammals, then expanded to fowl (Donald Duck), and as media attention exploded, just about everything else:  insects, fish, even inanimate objects such as cars and natural phenomena like storms and winds.  This all seems to be an innate tendency of human psychology, and some believe it actually helps to keep humans happy and grounded.

Pets have come to be part of the typically affluent American family, of course, and are treated as such.  Prior to World War II, pets were far less common.  But now, expenditures in the United States alone on pets mushroomed from $17-billion in 1994 to an estimated $75-billion this year.     Almost 70% of American families now own a pet, and pet marketing is based fundamentally on ascribing human characteristics to pets, as each of us sees every day in media and markets if we have our eyes open.

Is it any wonder, therefore, that animal “rights” has taken over from animal welfare, in an unthinking way, by so many in our political and media leadership and influencers?  I freely admit that I didn’t understand the distinction myself until a few months ago, and I have little doubt that only a relatively small portion of the American public has given these issues much more than a passing thought.  Which is exactly what animal “rights” extremists are banking on.  The status and emphases of organizations like the 4-H Club and Future Farmers of America have been transformed as the nation has transitioned from less rural to more urban economies, and understandings of livestock husbandry have been diminished drastically and increasingly in the last 50 years.
It is in this very fertile soil that racing’s enemies are multiplying, flowering, and prospering, while we flounder to respond.  To end a crisis.  To save our sport’s reputation and the very sport itself.

If racing is to survive in anything like its present reach and magnitude, our leadership, our cavalry command, must act like Xenophon, with care for and husbandry of the horse above all else.  They must urgently develop our strategy, anticipating the necessity of changing in harmony with the cultural evolution we can all see.  Now.  And we soldiers in the cavalry – whether breeders, owners, trainers, veterinarians, regulators, or marketers – must execute their fully developed national strategy without reservation and with massive financial, emotional, political, media, and public relations support. 

There is no realistic alternative for ending this crisis.

Alan F. Balch - A cluster-f***ailure!

Given the ongoing train wrecks or meltdowns (take your pick) we’re now experiencing in our racing lives, isn’t it about time to try to figure out what the hell happened in the last six months?  Why it did?  What’s still to come?  And what to do about all this?

Twenty-five years or so ago this study made a lasting impression on me: “The Logic of Failure,” by Dietrich Dörner, now emeritus professor at the Institute of Theoretical Psychology at the Otto-Friedrich University in Bamberg, Germany.

One reason is that the English translation I had was exceptionally difficult for me to understand; the most important is that after grappling with it through two complete readings, I felt I had learned some critical lessons.

Consider for a moment what your definition of “success” is.  If you’re a Major League hitter in baseball, you’re very successful – that is, you get a hit, and win your competition with the pitcher – maybe three at-bats out of ten.  You bat .300.  Which means you failed to get a hit in seven of those at-bats.  Far more than most hitters aren’t even that successful.  They fail to solve the problem the pitcher presented way more often.  

In racing, if you’re a trainer or an owner or a breeder, you know your success rate, counting by wins, is almost certainly worse than this.  Which means you fail even more.  Even if you have already solved innumerable problems just to get into the starting gate. 

Shall we talk about betting the races?  Solving those problems?  Uh, no.

So, when you contemplate all the books and courses about “how to succeed . . . ,“ at just about anything, it struck me that what we all should really be doing is what Professor Dörner did:  study failure and mistake-making instead.  So much so that, at the time, I thought I could make a fortune founding the Balch Institute for the Study of Failure.  After all, I’ve had plenty of experience with it.  We all have.  Success or “winning” or true problem-solving really mean the avoidance of mistakes or errors.  What we’ve been experiencing at Santa Anita, and threatened with everywhere else, is stark, colossal failure.  Mistakes compounded by more and more.

Do we really understand failure?  Why it happens?  How to avoid it?

In part, Dörner used a case-study approach to analyze various disasters, and see what they had in common.  Were he still active, I’d send our current experience in American racing his way to headline a new edition of his book.  We in racing continue to check virtually all his boxes for serious mistakes and likely calamity.

One overwhelming reason for the critical situation in which racing finds itself is the complexity of our sport and industry.  Virtually all of our stakeholders – and the media – have participated in elaborating the fundamental errors that have led us to a precipice.  Whether or not we can even correct our course at this point is open to serious question.

We’ve all heard the maxim that assumption is the mother of all mistakes.  It’s true.  Humans tend to oversimplify problems.  Of all our many self-defeating behaviors, according to Dörner, one is key:  we just don’t like to see any particular problem as part of a whole system of interacting factors.  So, when there’s a problem in a particularly complex system (like a nuclear generator or Thoroughbred racing or training a horse) oversimplification and assumption are dastardly enemies of success.  Of avoiding failure.  Oversimplified assumptions cause serious mistakes to be made.  Even deadly ones.

I still remember the late Edward DeBartolo, Sr., telling us that in all his many varied businesses and fields of enterprise, racing was far and away the most complex.  So, when an important racing management assumes that what apparently “succeeds” in Florida (whether it actually does or not is a separate question) can be applied to California, with the same results, without seriously considering all its possible ramifications, that’s just planting a quickly germinating seed of escalating failure.

Any true problem is likely much more complex than we humans would prefer, says Dörner.  My old boss at Santa Anita, Robert Strub, whose father founded it, was incessantly criticized by just about all of us for being too deliberate, requiring too much study before any important decision.  But that worked for Santa Anita through six decades.  When he turned away from that deliberation just one time, he got the first Canterbury Downs in Minnesota, and almost took down his original Crown Jewel in the bargain.  The outside “experts” on which he relied, rather than insiders, knew what they were doing, he said.  Until they didn’t.  Then it was too late and bankruptcy beckoned.

So, always beware the “experts,” whether inside or outside.  Check their assumptions.  Incessantly.  Three-Mile Island nearly melted down, in important part, because an expert of great renown didn’t need his calculations checked, because of that renown.  Until he did, and then it was almost too late.  Expert trainers and their expert veterinarians must likewise be checking their mutual assumptions incessantly.

Our human errors are so frequent because we resent slow thinking.  We want to streamline processes to save time.  In the name of “urgency.”  We try to repeat our past successes, even if the situations are importantly different.  

The more complex the situation, the more facets are involved, the more dynamic and constantly changing it is.  We humans don’t easily grasp the exponentially multiplying ramifications of what might at first appear to be simple commands: “tighten up this track.”  “Run more often or your stalls are at risk.”  Intended to achieve a goal of growing field size, while ignoring the potential ramifications of the escalating and even more serious problems they created, among other factors these directives provided an ideal environment for upheaval.  Like my old riding teacher used to preach, “you never know what you can do until you try to undo what you just did.”  Amen.  

Is it any wonder that adding the exceptionally complex physiology of the horse and infinitely ingenuous human art of training them to such a complex, volatile mix, you actually have all the elements (or even more) of an operating nuclear reactor?

As Dörner states, “An individual’s reality model can be right or wrong, complete or incomplete.  As a rule it will be both incomplete and wrong, and one would do well to keep that probability in mind.”

Indeed.  The reality-model that track management applied to Santa Anita in January was both incomplete and wrong.

Then when things started to go awry, these same human frailties we all have as problem-solvers came into play, whether for managers, trainers, owners, regulators, veterinarians, reporters, critics, or politicians.  Every human shortcoming was reflected in what each of us did in response, and magnified the original problem exponentially.  We’re all mistake-prone humans.

At first, we fail to react, carefully or at all, especially if we as managers or administrators or trainers or regulators are afflicted with the “it’s not my problem” or “this isn’t really serious” syndrome.  Those of us who saw our problems developing and didn’t do enough (or anything) to confront them, share mind-numbing responsibility for what happened later.  

Those who stonewalled their very recognition have even more.

The next response following their recognition, however, can be equally or even more dangerous: emotional, subjective overreaction.  Governments, regulators, managers, and media, all then join a chaotic and ever-expanding whirlpool of feedback, failing to respect or even recognize their own lack of objectivity and knowledge.  Managers speed decision-making even more, and point fingers, attempting to fix blame elsewhere.  Honest media, in particular, while not intentionally destructive, tend to hide behind the “don’t kill the messenger” syndrome, having little or any regard for their own complicity in exaggeration and lack of context.  They can’t control what others do, or fail to do, with the facts they report.  Then there’s the observer effect: the mere observation of a phenomenon inevitably changes that phenomenon.  

Journalists share the same human frailties with the rest of us, remember, although some don’t seem to recognize that.  With ever-increasing competition among all media, for speed of reporting, for notice, readers, viewers, clicks, and social sharing, not to mention ego, recognition, reward, and profile . . . their selfish goals almost always overwhelm context, accuracy, sourcing, and detail.  The world is more complex than ever before, and our sport the most complex of them all; yet the media are correspondingly at their most superficial.  Any and all public enterprises are at serious risk in such an environment, where broadcasting and sharing of the false or misleading or incomplete or exaggerated become virtually impossible to prioritize, modify, correct or place in proper context.  The media, fired by critics and extremists, in turn inform (or misinform) governments; then, even experienced legislators and regulators panic in reaction, rather than pausing to learn, then to calm and educate their publics.

Let’s remember the complexity of our sport yet again – racing and horses are far, far more difficult to understand and explain than they were even 50 years ago.

Which brings us to the issue of animal welfare vs. “rights,” an important distinction lost on most of the media and apparently on most regulators, legislators, and leaders as well.  The public statistics relied upon by racing’s insatiable enemies, developed in the context of The Jockey Club’s own equine injury database and by governments, must be urgently and seriously corrected, improved, clarified, expanded, refined, and made capable of explanation by all of us.  Our adversaries respect no rules, and care nothing about honesty, nuance, expertise, or horsemanship . . . racing’s leaders must become equally implacable and much better equipped than at present to educate the public, media, and governments about our efforts continually to improve horse welfare and simultaneously protect the hundreds of thousands of humans who depend on the sport and larger industry.  Not to mention its overall economic impact.  Those who oppose what they call “speciesism” – those who believe that humans and all “other” animals are equals, that discrimination in favor of one species, usually the human species, over another, is wrong – must be understood and isolated as the impractical extremists they are.  Their influence within government and the media must be unrelentingly resisted and rejected if racing is to survive.  Not to mention owning animals for pets and the raising of livestock, poultry, and fish for human consumption.

The very first priority, however, is to continue improving our own husbandry of horses, beginning with breeding a sounder horse, then managing and training them as the individuals they are, always recommitting ourselves to respecting and enhancing their welfare above all else.  We must improve and magnify continuing, extensive, expert education of veterinarians, trainers, riders, and stable workers.  Racing associations, horsemen’s organizations, and regulators must respect the declining size of the foal crop, adjusting calendars and conditions accordingly.  Every protocol for track and turf maintenance must be re-examined; the possible improvement and re-introduction of the latest in synthetic tracks must be considered.

So, right now, every one of us in this almost infinitely complex and interdependent industry, and all the observers of it – whatever our role – need to pause, step back, and assess our own mistakes objectively, admit them, and learn from them.  We have all made them.  We have to learn how to avoid continuing and compounding them.

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.

TO READ MORE —

BUY THIS ISSUE IN PRINT OR DOWNLOAD -

Triple Crown 2019, issue 52 (PRINT)

$6.95

Triple Crown 2019, issue 52 (DOWNLOAD)

$3.99

WHY NOT SUBSCRIBE?

DON'T MISS OUT AND SUBSCRIBE TO RECEIVE THE NEXT FOUR ISSUES!

Print & Online Subscription

From $24.95

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.

BUY THIS ISSUE IN PRINT OR DOWNLOAD -

Spring 2019, issue 51 (PRINT)

$6.95

Spring 2019, issue 51 (DOWNLOAD)

$3.99

WHY NOT SUBSCRIBE?

DON'T MISS OUT AND SUBSCRIBE TO RECEIVE THE NEXT FOUR ISSUES!

Print & Online Subscription

$24.95

Alan F. Balch - At last . . . . .

Way, way back in 1986, I was invited to speak at The Jockey Club Round Table in August at Saratoga.

I thought it went fine.  After all, I reasoned at the time, I was leaving Santa Anita and racing altogether, and could “tell it like it is.”  The reaction in the room to my remarks was startling and apparently supportive of what I had to say, some of it bluntly critical of racing’s leadership and approach to marketing, which was my principal interest then.

The Jockey Club felt otherwise.  For one thing, Mr. Phipps never spoke to me again (not that we were in the same social and professional circles!), and the racing media at the time interpreted what I had to say as radical.  

The late Tim Capps reported in The Thoroughbred Record that I had “scolded racing for not being willing to face competition head-on, for not reacting aggressively to new competitive forces, whether they be lotteries or other forms of gambling or simply other leisure activities.”  He quoted me as saying, “As the old boys on the block, we ought to know how to do this, yet we seem to act like we know less about competing effectively.”

In his opinion piece in the same issue, Capps described my audience as “a wildly cheering throng,” which was nice from my point of view but obviously exaggerated, as anyone who has ever attended a Round Table must realize. But he wasn’t exaggerating when he said I had “excoriated racing leaders for being unable or unwilling to compete in a market that is far more competitive than was the case 30 or 40 years ago.”

And this was in 1986!

So, here we are now, another 32 years later, with competition of all forms that would have been unimaginable then, and this year’s Round Table has just concluded. As it turned out, I didn’t leave racing back then as I had anticipated I would, instead continuing to preach what I believe about marketing racing to the few who will listen. Therefore, I am somewhat stunned and surprised to agree with virtually everything reported this year at the Round Table as to “industry initiatives.”

It’s about time.  And we can only hope it’s not too late. 

To begin with, how refreshing it is (for a change) to see no mention this year of The Jockey Club’s self-destructive hatred of Lasix. Not that they’ve changed their minds, we know; but the salvation of racing and the Thoroughbred breed simply have so little connection to that battle of theirs. Public arguing about therapeutic medications or “performance enhancing drugs” is just unfathomably stupid.  But their new McKinsey initiatives have everything to do with competing in the public marketplace for our share of gaming!

Their thrusts this year concern dramatically ramping up racing’s ability to compete for fans in the modern era. Deep commitment on topics like “digital fan development and engagement,” and “advanced analytics” is music to my old ears, as is emphasizing the importance of the track experience in developing new fans. Serious consideration today of fixed-odds betting and flexible takeout is about 30 years late, but so what? At least now we’re talking! Credit The Jockey Club for this, as well as their interest in what we can learn from the British.

Labor Day weekend I was at Sandown Park outside London. What a treat! A day there, or at Del Mar, or Saratoga, or Keeneland, drives home the importance of the on-track experience. But we must realize in the United States, once and for all, that off-track betting isn’t going anywhere (except toward new and more powerful competitors), and we must finally and thoroughly capitalize on what it can bring to us, not what it takes from us.

To be sure, enormous mistakes were made and even more enormous opportunities missed in how it was implemented here and elsewhere. Crying about it won’t change anything. Instead, we must learn how to capitalize on and invest in marketing a distribution system that has penetrated the population almost entirely. Just think of that. According to Pew Research, 77% of Americans already own a smartphone. While I dislike how much harder that seems to make marketing the on-track experience in the short term, I love how much opportunity it could provide for funding synergistic marketing of both! 

Locally, regionally, and nationally, however, racing is still not competing. Those of us in the game tend to assume everyone knows you can bet the races on your phone or via the Internet. Sadly, so little effective marketing has been done for racing over the last decade or two that the sport isn’t even on the regular menu of interest for all but the tiniest fraction of the population. The only way to change that is with a massive commitment to remarketing it, preferably coordinated among the major stakeholders, or at least complementary among them as competitors for the gaming dollar.

I once called it “positive competition” as we witnessed the old marketing wars among California rivals Santa Anita and Hollywood Park, as well as Bay Meadows and Golden Gate. Why? Because when rivals try to out-do each other, not only does the market respond, but the market’s awareness of what’s on offer rises dramatically. Just think what could happen if racing’s major American entities – the Stronach Group, Churchill Downs, New York Racing Association, The Jockey Club, and the Breeders’ Cup – made concerted, competitive national advertising and marketing investments to sell betting on the races to the enormous population of smartphone and Internet users who don’t even know it exists.

Authentic wild cheering and an avalanche of new business.

Alan F. Balch - Thomism . . . and racing

Thomas Aquinas (1225-1274) understood education and persuasion as well as anyone else ever has.  He once said that when you want to convert someone to your view, you go over to where he’s standing, take him by the hand (mentally speaking), and guide him to where you want him to go.

What you don’t do is stand across the room, or sit next to him, shouting at him.  Or, possibly worse, whisper insults in his ear, after loudly accusing him of dishonesty.  You don’t call him names.  And you don’t order him to come over to where you are.

Instead, you start where he is, and work from that position.  That’s the way to achieve movement toward consensus.

In racing, and the larger world, we’ve lost sight of this elementary psychology.  Everywhere we look these days, we see passionate, adversarial advocates who simply scream their own prejudices and beliefs, while excoriating their opponents.  All this does is make people who agree feel better, make people who disagree stiffen their resistance, and make anyone in the middle feel uneasy and skeptical that either side is speaking the whole truth.

Almost every passionate and partisan argument overstates its own case and understates its opponent’s case!

For the last several years in California, we’ve seen an evolution of this increasingly unproductive behavior when medication rules have been proposed and advanced by the Equine Medical Director of the California Horse Racing Board (CHRB).  

Raise your hand if you favor cheating . . . . hmmm, none to see?  That’s because nobody favors cheating except a cheater, and we believe there are very, very few of those.  A cheater, by definition, does everything possible to avoid detection.  In short, they don’t raise their own hands; but they may point to others. 

Our Equine Medical Director recently stated that he doubts he has gone a week in the decade-plus he has held that position when he hasn’t had “an owner, trainer, or someone else in the industry complain that we weren’t doing enough to control doping.”  He made that statement in the context of advocating elaborate new out-of-competition equine testing rules without which, he said, racing “does not have a robust anti-doping program.” He then pointed at both California Thoroughbred Trainers (CTT) and Thoroughbred Owners of California (TOC) as opponents of out-of-competition testing, whose opposition he called “bewildering.”

Such “opposition” is even more bewildering to CTT and TOC, since it simply doesn’t exist.  To the contrary, both verbally and in writing, both organizations have repeatedly endorsed the desirability of expanded out-of-competition testing, and elaborated rules for its conduct, including in votes at the Racing Medication and Testing Consortium (RMTC) meetings.

As the Equine Medical Director himself proclaimed, California already does more such testing than other racing authorities in the United States, and pioneered it in 2007, with the ongoing support of both CTT and TOC.  

Various versions of the latest RMTC proposal for expanding out-of-competition testing have been considered across the United States.  Many states have differing rule-making procedures, and California’s is among the most detailed and careful, subject to its Administrative Procedure Act and Office of Administrative Law regulations.  Our Equine Medical Director has been constantly critical of California’s rule-making process.  But he avoids any discussion of the reasons it exists as it does, to protect the citizens of the State of California from unnecessary, unenforceable, duplicative, or arbitrary rules, including any which would conflict with other rules or statutes.  In short, he would apparently prefer a system where he alone could simply order obedience to him, no matter the disastrous consequences to individuals or the sport if his rules were imprecise, unfair, or unenforceable. 

With only a modicum of success thus far – though noteworthy when achieved – CTT has advocated the use of informal working group meetings to achieve consensus on medication proposals prior to or during the formal rule-making process as outlined in California law.  Such meetings can be scheduled when veterinary practitioners are available, as well as representatives of the regulator, and without the trappings of court reporters and public notice requirements.  And without the unproductive posturing, by anyone, which becomes so tempting and destructive in a public setting.  A working group simply works, in short, to achieve an agreed goal.  Once a consensus develops, the formal process thereafter moves very quickly.  If a complete consensus cannot be reached, at least differences are narrowed to a very few, and are understood by all, during the formal process.  That’s our preferred roadmap to expedited rule-making. 

The present proposal was last formally considered by the CHRB in February 2017, over a year ago.  Our reservations as to its details were waved aside, as is customary.  The Board pointed out that we should instead use the required formal 45-day comment period prior to their consideration of its final adoption.  In March 2018, a year later, that commentary was solicited for a May hearing.  CTT and TOC then submitted their serious concerns, in writing, as required by law and as had been suggested by the Board itself a year earlier.  CHRB then postponed its hearing until June.  That’s when the Equine Medical Director accused us of “last-minute road blocking” for suggesting the proposal needed additional consideration at the Committee level.  He told the Commissioners they were “being played.”

Who is playing whom?  Why couldn’t a working group have been convened during the entire year after the 2017 meetings, to expedite this “essential” rule?  Our concerns have been voiced for well over a year, have been detailed in writing, and deserve sincere, thorough consideration.  We want rules that are consistent with the law, that are fair, that can be enforced, that provide for proper therapy and the welfare of horses, and will at the same time achieve their stated goal of deterring dishonest behavior.

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?

BUY THIS ISSUE IN PRINT OR DOWNLOAD -

August - October 2018, issue 49 (PRINT)

$5.95

August - October 2018, issue 49 (DOWNLOAD)

$3.99

Why not subscribe?

Don't miss out and subscribe to receive the next four issues!

Print & Online Subscription

$24.95

Alan Balch - Achtung!

View fullsize

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...

To read more of this article - subscribe now!

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

Click here to order this back issue!

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.

To read more - click here to subscribe!

Alan F. Balch - Now, about Pegasus . . .

No, I’m not talking about the Pegasus World Cup.  Not yet, anyway.

I’ve been a fan of the original Pegasus since my earliest memories around horses, when he was the symbol of the American equestrian governing body.   As drawn by George Ford Morris, he appeared on the engraved medals and embossed certificates for horsemanship we were all trying to win.   

For those of us interested in pedigree, he was sired by Poseidon . . . Greek god of horses, incidentally, along with the sea, earthquakes, and storms.  And never underestimate the influence of the bottom line:  his dam was the hideous, winged, venomous monster Medusa, no doubt the source of his own lovely, powerful wings, but not his handsome countenance.  Nor his stunning white purity.

His jock was Bellerophon, who invented the riding helmet and safety vest, and, needing no whip, had his hands instead on a shield and golden spear.  

Bellerophon was sent on the original Mission Impossible (well understood by every single one of today’s riders, no doubt) – to slay the ferocious, fire-breathing, hybrid monster Chimera, whose very sighting was an omen for disaster.  Pegasus was his vehicle, and the necessary if not sufficient condition for vanquishing evil.

In short, the horse came first.  Still does.  Without Pegasus, the jockey was nowhere.  And the monster would live.

So it is quite fitting, at least in one sense, that the world’s richest race would bear the name of the heroic and inspirational Pegasus, thunderbolts and all.

In another sense, sadly, it simply calls attention to the chaos we face in American racing, particularly in California . . . top and bottom of that Pegasus pedigree, by the way, trace back to Chaos.  Repeatedly.

According to media reports, the 473-ton, 110-foot tall, dark steel and bronze depiction of Pegasus stomping a dragon (absent his jock) cost $30-million to construct at Gulfstream Park in Florida.  The World Cup purse there was $12-million in 2017, and is being elevated to $16-million in 2018.   

Out at faraway Santa Anita, owned by the same outfit, the Blood-Horse reported in 2013 that $15-million had gone toward more grandeur in the track’s most sumptuous areas, its Chandelier Room and added mezzanine suites.  More recently, apparently millions more have been dedicated to new table terraces and other opulent enclaves nearby.

In all, what’s that?  Probably $50-million in statuary and splendor alone.  Not those purses.  Not even counting the ongoing maintenance and improvement of that magnificence, as status, monuments, and indulgence for the privileged few. 

Despite the commitment of all that investment in extravagance and shrines, pre-eminent horseman D. Wayne Lukas didn’t hesitate publicly to decry the deplorable and decrepit state of the stables at Santa Anita following the draw for the Breeders’ Cup Classic that same year.  “I would be embarrassed to take an owner out there now,” he said, despite having called the Santa Anita backstretch home when he first joined the Thoroughbred community in 1978.  His own shed-row at the time had become the exemplar for all to emulate, there and everywhere else he raced.  He believed in luxury for his horses.

Our Sport of Royalty has always depended on commoners.  We commoners, to begin with, actually take care of the horses.  And as King Henry himself said, “All men are equal – on the turf, and under it.”  In more contemporary times, it has disproportionately been the commoners (among the horsemen, as well as in the grandstand), who have made the tip-top magnificence possible.  After all, as I never tire of reminding those who just won’t hear or comprehend, 90% of the races (filled by the commoners and bet on by commoners) must be attractive enough to fuel the betting that funds the 35% of purses that go to the stakes and our royalty, only about 10% of the races.

The World Cups in Dubai and Florida take the yawning gulf between hype and reality to a new level of absurdity.  There are probably 20 horses from the tens of thousands active in the world who will contest them in a given year, along with their connections.  In the American case, almost all of the money they’re running for is their own, so perhaps that “makes sense.”

What doesn’t make sense in any way is the ongoing neglect of investment in backstretch facilities and conditions, for horse and human alike, whether at Santa Anita, Golden Gate Fields, or any track, any place in the world, in a sport where the horse comes first, and its human caretakers should, too.

This is our Chimera, and we clearly have the resources to vanquish it . . . if not the will or the proper priority.  Remember that even Bellerophon ultimately learned the hard way that glory by itself is not entitlement, unceremoniously dumped by Pegasus.  He ended up alone, hated by gods and man alike.

Alan Balch - War of the Worlds

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

Alan Balch - Interest and conflict

CLICK ON THE IMAGE ABOVE TO READ ONLINE

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

Alan Balch - Marketing and Management Myopia

CLICK ON IMAGE TO READ ARTICLE

This article appeared in - North American Trainer Issue 41

Alan Balch - Geese and Greed

CLICK ON IMAGE TO READ ARTICLE

Alan Balch - questioning whether the USADA would be the right choice to police racing

Alan Balch - Is perception reality?

CLICK ON IMAGE TO READ

Alan Balch - Complacent?

CLICK IMAGE TO READ FULL ARTICLE