Supporting Partnerships and Syndicates: Insights to Unlocking Potential

As witnessed at this year's GI Preakness S., partnerships and syndicates are reaching the winner's circle at the highest levels. MyRacehorse scored the victory with Seize the Grey (Arrogate) and over 2,500 people now can claim they were part of a Triple Crown victory. MyRacehorse may be getting all the press, but the reality of the situation is it only provides a small fraction of the horses needed to fill races at the racetracks in the United States. When you zoom out and look at all the managed partnerships and syndicates operating across the racetracks in North America, you begin to see how integral the multitude of partnerships and syndicates become to a race meet and the future of the industry.

“Rocket Wrench Racing will probably end up with 75-100 starts this year at racetracks like Canterbury Park, Delta Downs, and Sam Houston,” points out managing partner Justin Revak. “We might not win a Breeders' Cup in the near future, but we fill races and I believe that makes us an important spoke in the wheel.”

There is no doubt that partnerships and syndicates have become a bigger part of racing's ecosystem. We only need look down under at Australia to see the full integration of people pooling their Aussie dollars to purchase racehorses. There were 10,073 registered syndicates in Australia in 2021. Over 2,500 of those syndicates had 10 or more owners in the group. The numbers are staggering. One in every 253 Australians own a percentage of a racehorse. If the United States racing industry achieved those numbers, there would be over 13 million licensed racehorse owners buying and racing horses from Saratoga to Turf Paradise. Can you imagine?

So, what can be done to get us out of the gate? I reached out to managing partners to garner their input on what racetracks, trainers, and regulators could do to help fuel their businesses and help them help our industry.

Kyle Yost from Taste of Victory Stables started with, “New owner days with significant advertising to the public prior to the event. Allow syndicates to set up booths to easily interact with the public.”

To be fair, there have been an uncountable number of new owner seminars at local tracks, plus The Jockey Club's Ownersview Ownership Seminars have been held both on track and virtually, but what Yost advocates for is unique in that it reaches out to the public not just insiders. With a certain “event” element, which is free to attend, would help connect those with or without deep interest to syndicate management and partners.

Another avenue of support from the tracks that seemed universal was the need to provide more hospitality options.

Kyle McGinty from Blackout Racing Stable commented, “For tracks, our group members love it when we have a hospitality area to attend. Offering tickets, meals and an “in-game” experience for owners goes a long way to making owners feel special on race day.”

Tony Rallo from Crowns Way Racing agrees.

“I think the racetrack experience is of paramount importance,” he said. “Keeping partners attending the races and not watching from home is the name of the game. Some tracks are great at this, like Keeneland and Churchill, yet many others are not.”

Some racetracks do offer things like reserved seating and free admission to owners, but creating an experience for syndicate groups is different than simple owner benefits. These are groups of people who are racing for as much the social aspect as the financial opportunity.

“Special areas like the cabanas at Canterbury or suites at other tracks have the most appeal to our partners on race day,” said Revak of Rocket Wrench Racing. “There also must be a better and less expensive way to provide winner's circle photos to all members. A picture on a partner's wall in their home or office is a conversation starter and great publicity for partnerships, but having to buy 10-20 photos at $20 or more gets to be expensive. Maybe the tracks can help in that area as well.”

One of the newer thoughts on how tracks could help support partnerships and syndicates was marketing support. Racetracks have marketing assets that have little hard costs that could be offered to syndicates and partnerships to promote their offerings. Few partnerships have the budgets to advertise directly or buy on-track advertising or sponsorship pointed out by Rallo of Crowns Way.

“As it stands, only groups that charge high fees or take large markups can afford to advertise,” he said.

Howie Heiberger, Managing Partner of InFront Racing Stable summed it up well.

“We don't have budgets that the big boys like My Racehorse and West Point have,” he said. “If we do well, the tracks benefit probably more than we do at the entry box. Without the entry box being filled, there is no racing. If you took the partnerships out of the game, and relied on individual owners, like they had in the old days, there would be no racing.”

On the business side of things, finding a better way to handle partner purse distribution via the bookkeeper, education about what happens at the entry box and broadcast quality came up a few times.

TK Kuegler from Wasabi Stables had a suggestion along those lines.

“Broaden the education process around entries and condition books by moving to a digital process,” Kuegler said. “The other key thing about partnerships is that the vast majority of the owners are not local to the tracks. The broadcast quality and quantity of the entire ownership process should increase. Morning training, claiming shakes, and the card selection broadcast should all be broadcast and made public. It is relatively cheap and efficient to enhance broadcast of the entire ownership process.”

Partnerships and syndicates have also had a major impact on trainers. With the insertion of managing partners, a number of tasks that used to fall onto the shoulders of trainers outside the barn are now the responsibility of partnerships and syndicate managers. Recruiting new owners, owner communications, billing and collections are now the functions of the managing partner. Trainers should value this, yet there is a tradeoff, and some trainers are not ready to provide the new level of customer service that is needed.

“The fact is that not all trainers are built to work with partnerships. Many trainers want to train horses and not deal with people. But owners want access. That is why they are in the game and making the investment. Trainers need to produce more content on their training process and be more available to all their owners in a partnership,” said Wasabi's Kuegler.

When asked what trainers could do to support the efforts of partnerships and syndicates, things understandably become a bit more complicated. Yost, from Taste of Victory hit on a number of points most managing partners experience.

“More transparency and to provide an education,” he said. “This is tough, as you know, because people don't want to share their business secrets and a lot of trainers have never had experience with customer service. Sharing ideas while educating owners will give the owners more interest to be involved. I think trainers can provide some level of detail without the risk of exposing the reasons for their success. Some examples: Phil Schoenthal provides videos where he provides routine horse updates and an education to his various owners. Dan Blacker makes audio updates and, in fact, provides to his owners, in audio file, the verbal post-race exchange with the jockey. Megan Fadlovich routinely provides pictures with her updates… sometimes videos. These are some examples of great customer service being provided by trainers, but the above-mentioned efforts are not the norm from trainers. Customer service and providing education is not at the forefront of a lot of trainers because understandably they are interested in training horses. However, the best trainers and the most successful trainers need to have a customer service element as part of their business, or the times will pass them by.”

Crown's Way's Tony Rallo agrees and points out the new hurdle being placed in the way since HISA became part of racing.     “I think trainers could help more by sending more videos of workouts or anything where the horse is showing some personality. Some trainers are better than others. Neil Pessin, for example, is the best guy ever at this kind of stuff. He would have anyone by his barn to show off his horses. One concern I have about it is, if these contamination positives are true, and I assume some of them are, trainers are going to be more and more hesitant about having people by the barn and rightfully so.”

Having a dozen partner/owners showing up at your barn with chocolate donuts and coffee could send any trainer into a tizzy these days, but without people physically connecting with the horses, we would lose a key element to attracting and retaining people to horse racing and ownership.

When the conversation turned to regulation and how regulators could help fuel the growth of partnerships and syndicates, there seemed to be a universal theme: Licensing.

“Uniform licensing would make a huge improvement for owners. Each state has various licenses for owners, stables, sometimes managing partner, silks, etc. and on top of that the expiration dates of the various licenses in an individual state do not coincide with each other. So, if you have licenses in four states, for example, and you have a stable name you may have something like eight or 10 separate licenses and all with varying expiration dates. Some states require fingerprints, which adds another layer of difficulty to an already difficult situation. The varying licenses, expiration dates and other requirements make licensing very difficult to manage, outlined Yost of Taste of Victory.

The  National Racing Compact has helped in this area, but there is a cost ($300 for three years) to using their services. When you begin to multiply that cost on top of the licensing itself, the total cost begins to really add up.

One managing partner commented, “It costs Mike Repole approximately $100 to get licensed in most states, it costs my partnership close to $2,500. How is that possible?”

The recognition that partnerships and syndicates are now–and will continue to be–a larger part of the racing ecosystem, it would seem apparent that racetracks, trainers, and regulators should focus more on how they can take these incubators of ownership development and provide the fuel to one day reach the numbers that we see in Australia.

Have more comments or insights?  E-mail me at jscurto@horseshoemarketing.com.