01/12/2016 5:19PM

Ownership basics detailed on day one of OwnerView conference


HALLANDALE, Fla. – Master of ceremonies Tom Durkin made his entrance into the second OwnerView conference at Gulfstream Park on Tuesday barefoot, in a T-shirt and shorts, accompanied by four dancers. It got a lot of laughs and attention, but then came the serious stuff. The two-day conference, held in the run-up to the Eclipse Awards here on Saturday, is designed to educate new and existing owners on the joys, hazards, and experiences to expect in the racing game.

On the first day of the conference, hosted by The Jockey Club and the Thoroughbred Owners and Breeders Association, three sessions were held. Two panels dealt with the basics of ownership – one on how to approach the business, who should be used as consultants, and what to expect, and the second on the various paths of getting involved as an owner, from claiming to public auction to partnerships to breeding. The third panel consisted of jockeys discussing their role in the sport and their relationship with owners and trainers.

In the panel on the business aspects of racehorse ownership, bloodstock adviser Reynolds Bell said one of the most important factors to success is having a business plan.

“Racing is risky,” Bell said. “Breeding is risky. Breeding to race is risky. I always want someone to work from a business plan, something I stress. It starts there. Try to pick good people. Identifying the right people is important to accomplishing your goal.”

The panel, moderated by Mike Pena, included Bell, Jen Shah, Jeff Lifson, Lonny Powell, Richard Nunnelley, and Christina Bossinakis.

Lifson, of West Point Thoroughbreds, said before he gets potential owners involved in racing he tries to emphasize from the start that ownership often means a financial loss.

“I try to scare them to death saying they’re not going to win every race,” Lifson said. “And I then let them know what to expect. From there, we can start working on a plan to get them into the game.

“When you’re getting involved as owner, you need to know what you can stomach in terms of costs. Having a good adviser going in can help you with picking the right horse, picking the right trainer, making the right decisions.

“There are no health insurance plans in racing. If a horse gets injured, needs surgery, needs care, these are additional costs that are not planned and not covered, and an owner has to pay these.

“There’s also no insurance policy that covers a horse from being slow.”

Jen Shah, an accountant, indicated that a business plan is a must for any owner, new or existing, since tax laws must be followed in order for an owner to be able to write off income versus losses, whether the owner is classified as an active or passive investor.

“It’s helpful to take business plans from other businesses to use in racing,” Shah said. “Keep separate books, get advisers, keep the businesses separate. Be aware of tax benefits. If you buy a yearling at a sale, you may be able to write off bonus depreciation of 50 percent. You may be able to write off stud fee from basis when breeding a mare.

“You need game plan to identify areas of the market where you want to participate and the level of participation. A little luck doesn’t hurt, either.”
On the second panel, Maggi Moss, a successful owner on a number of levels, said she has done the best in the claiming side of the game because it is easier to control costs and achieve quicker results, and her return on investment is better compared to buying yearlings to race or breeding to race.

“I’ve bought expensive yearlings; I’ve bought 2yos in training; I’ve bred them; I stand horses in Iowa; I’m a jack of all trades,” said Moss, an attorney. “In the claiming game, anyone and everyone can be involved with. You can control your involvement.

“For me, even though I have diversified, I find [claiming] the most immediate way to be involved. And I find it more profitable. I used to study law books and now I study races, watch races. I find it more interesting.”

Moderated by Alyssa Ali, the panel included Robb Levinsky, Laurie Wolf, Eric Hamelback, and Moss.

Levinsky, managing partner for Kenwood Racing, said that he prefers that a new owner gets involved in racing through a partnership, and does so slowly, to make sure they understand the risks, expenses, and difficulty of the proposition before they invest a considerable amount of money in the sport.

“We do a taste of Thoroughbred ownership,” Levinsky said. “Some are very small ownerships and start with the 2-year-old market since people like to see the horse develop and can to see the horse race sooner.

“You have to do your homework. You need a plan. You have got know how much you will invest and how you plan to put that money to work.

Shared ownership is a good way to start.

“Winning a race at any level is tough. If a trainer wins 20 percent, that means they’re still losing 80 percent of the time. It’s important to understand that to get a horse to the winner’s circle at any time is an achievement.”

In the third session, Richard Migliore moderated a panel that included Jerry Bailey, Joe Bravo, and Tyler Gaffalione on the riding profession and how they handle horses. They interspersed their discussion with a lot of funny anecdotes and personal experiences.

Bailey said that it was critical for a rider to have the confidence of an owner and trainer because it is important that the rider brings the horse back safely so he could start again soon, and not having to worry about not winning the race if that becomes a factor.

“Our job is to bring your horse back in good shape,” Bailey said. “If he can run in four weeks instead of coming back nicked up and not be able to run in four months, it is better for the owner. It’s important for an owner to know your rider. It’s to your benefit.

“You develop a relationship with a rider because you have confidence in them. If you have confidence in them, they’ll have confidence in you.”

All the panelists agreed that the horse was usually trying to do their best all the time and their job was to give the horse the best chance by keeping the horse out of trouble and maximizing their effort.

“I’ve never seen a jockey make a horse run faster,” Bravo said. “The only thing we can do is mess up. The horses run as fast as they can.”

Bravo also echoed the remarks of Bailey when he said that it is important for an owner and trainer to have a good relationship.

“You learn from failure,” Bravo said. “You need to ride a horse to be able to know what you have. A trainer can only tell you so much before a race. You learn so much from riding a horse the first time. So you don’t want to be taken off if you lose a race.”

The OwnerView Conference continues on Wednesday with three more panels: one on success stories from current owners, another on aftercare, and one on the people who help run a racetrack and care for an owner’s horse. The keynote speech will be delivered by national radio sports host Jim Rome, who campaigned in partnership champions Shared Belief and Mizdirection. The conference starts at 9 a.m. Eastern.