Tom Grossman made his money in the Investment Management industry on Wall Street. But the 47-year-old owner of Blue Chip Farms, who has been at the helm since 2001, finds his real passion in racing. Whether stemming from his involvement in the biggest breeding operation in New York or his newfound dabbling in Thoroughbred ownership, Grossman is simply “fired up” about the sport. Grossman, who currently owns at least a piece of nine Thoroughbreds including stakes-caliber horses like China and Cheetah Pants (slated to run on the Preakness undercard), sat down with DRF Harness Managing Editor Derick Giwner to discuss Blue Chip Farms and the racing industry as a whole. What made you decide to buy Blue Chip Farms? TG: I grew up with the Kimelman family, who is third generation of running the farm with Jean’s (Brown) family. I worked in the summers for Mike Kimelman (Sr.) and learned both the stock business and started to learn the harness business. But I Grew up as a Thoroughbred guy and went to Belmont or Aqueduct every Saturday since I was 4 years old. I’ve been to Saratoga ever summer my entire life and I’m lucky enough to have a house there now. I got into standardbreds when they were racing On the Road Again and I got the passion. That’s how I got the bug. My career on Wall Street went very well and there were a lot of tax angles to buying the farm; agriculturally; depreciation. It was a perfect fit. It is a good business, but you have to constantly invest or you die. Blue Chip was still at the top but peaking a little and they didn’t want to see that happen. I had the cash flow to help. So we came in aggressive and bought half of Bettor’s Delight, half of Art Major and half of American Ideal. The motivation was both a sport that I loved and one I could make sense of economically. I wanted to be a Thoroughbred owner in the worst way but I couldn’t make it work in my head and justify it, but here I could. Since you have been here in 2001, New York Breds have skyrocketed. They are now major players on the Grand Circuit scene. Is that mainly because you decided to invest the money into stallions? TG: Part of the bet in buying Bettor’s Delight was that we would get slot machines. The unfortunate reality in my mind, it was one of the most ironic days, but maybe why the slots passed was 9-11. I’m not sure the slots would have passed without 9-11. It was a really weird thing for us because we lost part of our family, Mary Kimelman was right in the towers. She had passed away, we had just bought Bettor’s Delight and then the slots got approved. It was sort of one of those seminal moments in life. So, we did get the slots and then we invested. Or we invested to get the slots, but it is definitely a chicken and egg thing. We made a lot of promises to the legislature in New York State that we would invest and make a nationally prominent program. We had to be aggressive and outbid a lot of other stud farms for those stallions. For sure we were lucky; Bettor’s Delight was a career-maker. I think he was the most successful commercial stallion of either gait in a hell of a long time when you count what he does in the Southern Hemisphere. All great things start with a little nuclear engine of profitability. The Legislature in New York has stood by us as well, and it’s been a partnership. Every once in a while there is a waiver here or there, but now there is 10 or 12 years of working together and you have the tangible results. There are 4 or 5 new training centers that didn’t exist, Mark Ford’s place being one.  So the politicians have seen the product come up. To be honest, we have a unique vantage point for how that will play out for the Thoroughbreds in New York as well. It’s the same movie we saw. The mares are coming. The stallions haven’t happened yet. Has your time at Blue Chip met your expectations or exceeded? TG: It has definitely exceeded. We’ve worked very hard. We’ve made a lot of good bets and we’ve been lucky as well. We’ve had two war-horses in Bettor’s Delight and Art Major that showed up literally day one. Through them we invented the Southern Hemisphere shuttling for harness. The smartest people in the game told me I was nuts to send a horse just off the track to Australia. Then I went to Kumar and they are like, ‘we do it all the time’. The establishment in both games are very stuck in their ways, in my opinion. The most respected people in harness racing told me I was nuts and we did it. And Jean (Brown) knows more about pacing breeding in Australia than anybody, because she has written the contracts and done all the work. So that was a whole different business for us. Considering the leaders in the industry and owners of some of the other breeding farms, do you feel the need to be more of a vocal leader because of your youth and willingness to innovate? TG: Yes, now I am. I was a relative neophyte in terms of knowing a lot of this stuff. And they do a good job of making you feel like you’re dumb, the establishment; If you don’t live in Kentucky, you don’t know how to raise a horse. The background of that story is that’s what they told Mike Kimelman Sr. when he bought the place in the ‘60’s. So he went to the best farm in Kentucky and hired Jean’s father 35 years ago to help build and run the place. Then he said, ‘okay, we are Kentucky’. And that was instant credibility and we’ve retained that. So now I have the confidence to be a little more outspoken; really studying pedigrees and confirmations. I have a great staff and I ask them thousands of stupid questions every week still. And emails going back and forth; what about this and could we have done that? So, I feel from a NYC kid, now I can somewhat speak with confidence. Blue Chip has been much more aggressive with advertising lately. What is the mindset behind that? TG: Some people think that’s nuts. Even internally we have some debate as to what’s the effect of, say, the Blue Chip winner’s circle (current promotion at the Meadowlands) actually has on business. Does it get you another bid at an auction? Does it get you another stallion booking? Measuring the effectiveness of advertising is an art not a science. We want to take the business to another level, so we are going to probe and see if it is helpful or not. Is reaching another level why you want to find a connection between Harness and Thoroughbred racing? TG: We are open to anything. We’ve gone way down the road with some very respected places about standing a Thoroughbred stallion here. I’m still not convinced that’s right. We are very happy to have some Thoroughbred mares from some well respected people. I think that crossover will happen. I know we can take care of a Thoroughbred mare as well as anybody. So we keep tip-toeing down that path without risking messing up our current business model. One of the most interesting things you said earlier today was, “We are not only interested in us, we are interested in the industry as a whole.” Can you speak on your broad approach? TG: I think when you get to be in the top couple of anything, the game has to survive for us to survive. We bought Chapter Seven and paid a lot of money. We don’t buy a nominal piece of him and get a few breedings; we bought 20 percent of the horse. We are going to pay half a million bucks. That’s a long term commitment. For me to make out on that horse, he has to be out here for 8 or 9 years from now to start to earn that type of return. So we have to have a long term vision and we have to have the sport survive and thrive for us to make the returns we want. Do you see an issue with the industry-wide reduction in the number of mares that are bred? TG: As confident and optimistic as I hope I sound, the flip side of it is, what we pay for hay, straw, feed, labor and insurance goes up every year, and you can tell our yearling prices haven’t really been going up every year. As much as I love it, we aren’t going to operate this thing at a loss.” I’m obviously a biased observer, but clearly more money has to go from overnight racing to stakes racing and 2-year-old racing to get yearling prices up. Because I think we run this place very efficiently, but the number of mares being bred is down for a very real reason. If yearling prices don’t pick up, people are going to keep going out of business. But despite the reduction in foals, you remain optimistic? TG: There are too many reasons why; that things will go better at the Meadowlands; that Ohio is humming. In stocks, you trade cyclical industries. You buy stuff when everyone is going out of business. So when people are shutting down steel mills in Pennsylvania, you want to buy steel mills in India. I think that is what we are trying to do here. We’ve plied back every penny we’ve made here since I’ve bought the place. It is too logical to me that other states will start up; that Canada is at least going to be a little bit better. I think Jeff Gural is on the right path and something good is going to happen in New Jersey. I think that the sport, with greater internet capabilities, will not be better, but just show itself off better. And that we are going to get some of the Thoroughbred owners, and that my 16-year-old son is going to convert a whole army of poker players into harness handicappers. What about a place like Yonkers or other slot tracks, where there is a lot of money for the horsemen, but the overall focus seems to be on slots. How do you get new people into harness racing when you are not spending the money on advertising racing? TG: We are not naïve. We know that the returns on running a casino are better than the returns on running a racetrack. As Jeff (Gural) has pointed out many times, if we just sit back and wait for the slot subsidy to save us, that’s not going to make the business thrive. And in a way it is almost good that [Yonkers] hasn’t done more because it is forcing us to really market ourselves. Even under the worst case assumptions, there is so much more we can do as an industry ourselves. Yonkers is helpful. If we go to them with a specific idea, they are generally very accommodating and helpful. Whether they are going to sit there and noodle all day about how to make harness racing better like you and I, maybe not. Shame on us if we can’t find a way to draw [Yonkers] into more of a partnership. Maybe it is on the backs of Blue Chip or a Hanover Shoe Farms to promote the sport because tracks can’t always work together and agree? TG: Jeff (Gural) and I have been on the opposite side of things and same side of things, but no one will argue that, like anything, you try a lot of things and some don’t work and people then people laugh at you for it. But no one is going to say Jeff hasn’t made a big impact on the Meadowlands. It is proof that it can be done. A lot of what they are doing is just basic customer service, but they are doing it very well and his staff is getting better. He has more young people there and it is a glimmer of what could happen. We’ll take the challenge. Anyone who has thoughts on what could be better, how we could specifically help. This is an industry we invest millions of dollars in and we have expertise, time and money to invest if we think it can make the game better. We are very confident in our market share, so the bigger the game gets, the better it is for Blue Chip.   [DRF HARNESS: Sign Up for the FREE DRF Harness Newsletter Today!]