Jeff Gural’s stallion rule — recently adopted by the Woodbine Entertainment Group — has provoked heated debate in the industry. The Sportsman asked Jeff Gural to further argue his case for forcing healthy star horses to race at four. Peter Heffering — owner of Canada’s largest standardbred stallion farm, Tara Hills Stud in Port Perry, ON — argues against the rule.
Gural On Gural’s Rule
by Jeff Gural
In answer to your question about the stallion rule, my views are very simple. I honestly believe that if we do not change our business model, harness racing will simply disappear within the next 10 to 15 years as there simply will not be enough people to buy or breed yearlings and make it worthwhile for track owners to turn on the lights and actually conduct races when there is so little money being bet and so few people in the grandstand.
The only thing I know that is guaranteed to work in an effort to attract fan interest is racing great horses that people will want to come out to see race. I guarantee if someone investigated attendance at the Canadian tracks every time Somebeachsomewhere raced it would show that attendance probably tripled what it would have been had Somebeachsomewhere not been racing. If people perceive having three times as many people in the grandstand as being a bad thing, there is not much I can say. An even better example of this were the results for the Breeders Cup this year showing that the TV audience declined 70 per cent from last year as the races with Zenyatta generated a TV rating of 3.7 and without it was 1.2. Attendance and handle also declined.
I also believe we have an obligation to the younger people who work in the sport to insure that they have a future. Many of these people have grown up with harness racing, have devoted their entire lives to it and it would be difficult for them to change careers 10 or 15 years from now. I do intend to try to create a series of races for four-year-olds earlier in the season before they have to go up against the five and six-year-old horses and hopefully the horsemen and track owners that have slots money and can afford additional stakes races will be willing to help. I am happy to report that so far I have received positive feedback.
As to the issue raised that it is unfair to the owner of the horse that wins $2 million or $3 million, who may not be able to sell the horse as a stallion for a great deal of money and feels that he is being prevented from doing so, my reaction is that we live in a free country in a capitalistic society and considering that myself and my partners are investing over $100 million to keep the Meadowlands open and unlike other tracks that rely on slots revenues we have to survive only on our racing revenues. I have no choice but to try to put on a racing program that will attract the greatest number of people to my facility.
Five years ago, I invested over $110 million to reopen Vernon and Tioga, which have the two best racing surfaces in the state, have helped increase the value of all of the New York-bred horses and no one came to my aid nor did I expect them to when it turned out to be a horrible investment. The first two years we were open we were losing $1 million per month to keep both tracks operating and I did not ask the owners of any of the horses that were racing there or the owners of any of the top three-year-olds to subsidize me in order to keep it open. I do not see why I should be concerned about the owner of a top three-year-old who wins $2 million or $3 million and now has to race at four. To be honest, I am sick and tired of seeing the owners of these horses with tears in their eyes as the horse’s shoes are removed after their last race and telling the world how sorry they are that they will not be able to see the horse race again even though the only reason the horse is not racing again is because they have decided not to race them. Even worse, more often than not these same owners claim that their horse is the greatest horse that ever lived and yet they are afraid to race at four because they feel their horse might not be competitive. Does that make any sense — the greatest horse that ever lived cannot compete as a four-year-old? One other added benefit of this rule is that one would think we would know which stallions were sound enough to race at four and in the long run we would be able to breed sounder horses because only those stallions that were sound enough to race at four would command the higher stud fees. Several breeders told me before the yearling sales this year that they thought my rule was going to negatively impact their ability to sell yearlings. From the results of the sale that does not seem to be the case.
I greatly appreciate the support of WEG in this endeavor and as a result of their willingness to work with me I have actually decided to waive the rule this year since we did not have any dominant horses. I have enough to worry about without trying to decide if the vet certificate saying the horse was not sound enough to race was valid or not valid. Hopefully next year we will have a couple of great horses again and they will race at four in 2013 and we can evaluate whether or not this idea is working. It is a pilot program and if after two or three years we see it is not accomplishing the goal of creating a better product for our customer we can certainly go back to doing it the old way which unfortunately has resulted in a slow, but steady, decline in our fan base.
I hope this explains my thinking. I would gladly trade places with the owner of the next great horse and let them try to raise $100 million to keep the Meadowlands the premier harness track in the world without the subsidy. For those who disagree I say that is what makes horse racing.
Heffering On Gural’s Rule
by R. Peter Heffering
An open letter to Jeff Gural:
Dear Jeff,
I want to thank you and congratulate you and your team for all of your efforts to hold the standardbred industry together. I personally wish you continued success.
However, I do have a problem with the restrictions of a potential stallion having to race at four, to have their offspring eligible for some of our biggest races. The fact that you are bringing other tracks under your wing, such as WEG, would have to be considered a restraint of trade.
To think that six to 10 possible stallion prospects are going to save our industry by racing as four-year-olds is a total fallacy. I have tried racing four-year-olds for partners and myself. For the most part, it has been a failure financially and has lowered the stallion value by 40-60 per cent.
There are other problems associated with the conditions that you will have to deal with. For those who are not knowledgeable about how the stallion business works, it should be mentioned that most stallions are being leased to stud farms.
What I see happening is that a stud farm will option a stallion after his three-year-old season is finished. The contract will now carry a proviso that the option would not be exercised if said stallion doesn’t race up to the calibre for him to hold his value. This leaves the owner of the stallion with no lease or, at best, has to re-negotiate a lease agreement at a loss to the owners of the said stallion.
I appreciate the fact that you are asking the breeders and owners to continue racing these horses at four, to help make the tracks more profitable and produce better purses, along with hopefully having more track attendance. The question I have for you is, what are you willing to do for the owners (of these potential stallions) who you are forcing to continue racing their horses?
Let me make what I believe is a valid suggestion:
1. Have the stallion appraised in value after his three-year-old season.
2. After the stallion races as a four-year-old and does not meet expectations, have him reappraised in value for stallion purposes.
3. At this point, you and/or the tracks would be willing to make up the loss to those owners who are being forced to support your effort.
I realize that there are some owners involved that do not count on making money to survive in this business, such as you. However, that is certainly not the case for many of us. We have to strike while the iron is hot, so to speak.