TDN Q&A: Frank Stronach

[Wandering Eyes]

As the founder and honorary chairman of The Stronach Group, Frank Stronach has no equal in this sport when it comes to being a mover, a shaker and a visionary. Stronach doesn’t believe in the status quo and believes that it will take bold action and innovation not only for the sport to move forward, but, perhaps, to remain viable. The industry is clearly starting to appreciate his contributions. Last month, it was announced that Stronach is the latest recipient of Dinny Phipps Award. The award was created by Earle Mack and honors an individual or individuals who have demonstrated dedication to equine health. Some three months earlier, Stronach was awarded an Eclipse Award of Merit for a lifetime of outstanding achievement in service to the Thoroughbred industry.

Stronach sat down with the TDN‘s Bill Finley to talk about his vision not only for The Stronach Group racetracks but for the sport itself and why he is so dedicated to the betterment of the game.

TDN: With these two recent awards, it is clear that the industry is appreciative of your efforts. That must be gratifying.

FS: It is. It is any time you get awards like this. I do what I do because I am heavily involved with horses and love horses. I built a sizeable industrial corporation (an auto parts business) and so when I got into horses, I was looking for an equalizer. With the industrial, you measure things by the thousands of an inch and use high tech formulas. The horses bring us back to nature. The more I got into the horses, the more interesting it got. You have a very big powerful animal and it has no mean streak in it. It would rather run away than fight. I just try to do things that are right for the horse and for horse racing. I used to give a lot of lectures at universities and I’ve always said that success in life can only be measured with the degree of happiness you reach. At the same time, I told them that it’s a lot easier to be happy if you have some money. If you are in your early twenties and you don’t know yourself yet, experiment a bit. Do something that you enjoy. When you enjoy something, you can be good at it if you put in the extra effort. You can be one of the very best. Money is a byproduct of that. For me, the horses are a great equalizer to my industrial activities.

TDN: The last five or six years have been good ones for The Stronach Group. Gulfstream’s business has gone through the roof, Laurel has also seen impressive improvements in handle and things appear to be turning a corner at Santa Anita. Is there any one accomplishment you are most proud of?

FS: What I am most proud of is what we have accomplished at Gulftream Park. Yes, we did quite a bit of renovation at Santa Anita and also some at Laurel. But Gulfstream was a complete overhaul. I tried to build a facility that I thought would be the most functional facility. Functional but also a place with plenty of aesthetics. I think aesthetics are very important to the customers. I got criticized quite heavily to begin with. Then more and more people came and more and more people enjoyed the excitement. People love to go there now. I wanted to create something where people wold say, ‘Let’s go to Gulfstream Park–the food is good there–let’s watch some races and have some fun.’

TDN: Some of your more successful hires of late have been people who few would have pegged for management roles. In particular, in people like Tim Ritvo, Sal Sinatra, Billy Badgett and P.J. Campo, you have taken people who have spent most of their careers dealing with horses and not the more traditional aspects of the business side of the sport. Yet, these people seem to be doing a very good job. What do they bring to the table that has made them a success in their new roles?

FS: When I look for a manager of a racetrack, I think it’s important that the owners and trainers feel good about the person I hire. They have to lay a lot of money out and put a lot of work into what they do. So we were trying to hire people who understood what the owners and trainers need. If you have been a trainer or if you have been connected with the horses you have a good understanding of that. A lot of trainers would say, ‘Gee, if the owners would do XYZ, it would be better.’ The same goes for the owners. We listen to them. We try to make it as pleasant as possible for the owners and the trainers.

TDN: More so, perhaps, than at any time in history, so many horses and so many good horses are in the hands of a handful of trainers. Many believe this is a problem. In fact, Santa Anita has written races that are designed to give the smaller trainers an opportunity to win. What is your overview on this matter?

FS: I want to stress over and over that the backbone of racing is the small trainer, the small owner. They get up seven days a week between 4:00 and 5:00 in the morning to chase a dream. They want to come up with a stakes horse and thereby change their lives. I want to provide them with a chance to make a better living. In California, we have a problem. About 5% of the owners and trainers win about 70% of all the purse monies. That means a lot of the small trainers can’t make a living. Yet, we have to be careful and there has to be a balance. Most of the wealthier owners have made their money in other businesses. They buy horses to win big stakes. Only a small percentage of the horses that you buy wind up as stakes winners. For those who spend a lot of money on a horse, we obviously have to have stakes races and we have to have opportunities for them to race in spots that are preps for those races. We have to take care of the big and small stables, but we can’t ignore the needs of the smaller trainers with the cheaper horses. Tim Ritvo has done a good job balancing this at Gulfstream Park and we have to do the same in California.

TDN: Your racing departments have done an admirable job of creating big fields at your tracks. Sometimes, though, they do so by carding a lot of cheap races, including turf races for cheaper horses. Why has The Stronach Group adopted this formula?

FS: The message I want to get across is that racetracks can only do well if they have big fields. People do not want to bet on a four- or five-horse fields. A lot of owners like to run in races with small fields because their chances of winning are greater. But the racetracks have to be viable. If they are viable, they will be there forever. We have seen so many racetracks go out of business because they were not viable. We need to create as much handle as possible and the best way to do that is to produce races with big fields.

TDN: This is an industry that many people say is dysfunctional and would be a lot better off if all the parties involved worked together for the good of the sport and not just their individual interests. Do you agree?

FS: Yes, the racetrack owners have to communicate a lot more than they do. Believe me, I can make more money in other areas rather than in investing in racetracks and racehorses, but I care about the sport and the horses. If we would work together, if we put our heads together, we can get racing to a higher level. When you look back at the last couple of decades, handle was a lot bigger than it is now. Fifteen years ago, it was about $15 billion, $16 billion. Now it’s down to $10 billion. That’s a huge difference and it doesn’t take into account inflation. That $15 billion is worth more today than it was then. We have too many sources that pull money out of the handle, including the off-shore wagering. We have got to get that money back, the $5 billion or $6 billion that has been lost over the years, for the racetracks to survive. Some years ago, people were saying Stronach might have a monopoly, owning most of the racetracks, we have to be careful of him. I don’t think people think that way anymore. We have to put our heads together and say, “What to do we have to do to change so that racing will stay alive?” One thing we should be looking at is having one online betting platform. With the way it is now, it is too confusing.

TDN: It sounds like you are worried about the future of horse racing in this country?

FS: I am very worried. The problem is that the land these racetracks sit on is very valuable. The racetrack owners have to be entitled to a fair return. Not a high return, but a fair return. If they lose money they are not going to stay open. That’s the key, the message I want to get across. For me, what I do, is not self-serving. It’s for the love of the horses. Horses are one of the last things left when it comes to our connection with nature. Horses have provided such a great service to mankind. Where would the West be in America if not for horses? For the horse industry to stay alive we have to sit down and really take a look at what we can do.

TDN: Yet, wouldn’t you be better off if several racetracks did close? After all, that would mean a lot more handle for the Stronach tracks.

FS: Not at all. I’m talking about what do we have to do to make sure that horse racing stays alive, and not just our tracks. It’s not like two restaurants side by side that compete for customers. Belmont is far away from Gulfstream Park. Gulfstream Park is far away from Churchill Downs. We are not talking customers away from one another. We should be finding ways that New York, Santa Anita, Churchill, Gulfstream all do well. The major racing hubs all need to be successful because that is what is best for the overall health of the sport.

TDN: Perhaps your boldest initiative to date has been the creation of the GI Pegasus World Cup. There has been a lot tweaking to the format for the race and there have been hints that more major changes could be in store. What can you tell us about the future of this race?

FS: It would be great if we would be better connected and get horses for the Pegasus from more parts of world, like Japan and even China. Why does car racing do so well? Car racing has 200,000 people at its events because many people are from Brazil, from Argentina, wherever. Great racing cars come from all over the world. It’s the same for soccer. It is already popular, but it is at its most popular when you have the World Cup. We need to work on that, getting horses from other countries. We want to make it more of a worldwide event.

TDN: It would be a lot easier to attract foreign horses for the Pegasus if the race were run on the turf. For a time, there was talk about a Pegasus turf race. Is that something still under consideration?

FS: Internally, we talk quite a bit about that. It is absolutely necessary that we do have a turf race. Ideally, we’d like to have a dirt race and a turf race. The turf race could even have a higher purse than the dirt race because it would be more accepted on an international level. We are open to that. Our main aim is, can we do things to improve and make horse racing more exciting? That is our mission. If it is more exciting, more will be bet and then there will be more money for the racetracks. International competition is important. Down the road, I would like to see a World Cup for horse racing. One year it could be in the U.S., one year in Saudi Arabia, one year in Dubai, one year in Ireland, England or France. From time to time, you would hold the event and have it at different locations and have a truly international event. That’s the type of thing we need to bring international attention to our sport.

 

View the full article