Horse Racing: The New Purse Economy

How well do the owners make out in the new purse economy?

There are some 25,000 horses in the U.S. competing for $85 million in purses, which in the aggregate is just about enough to pay for their upkeep - but not enough, in general, to recover all the owner's capital cost.

And so racing is scarcely a good commercial proposition, except to a minority that is very good at it, or very lucky, or in a high tax bracket.

In effect, a substantial amount of racing is 'subsidized' by a large number of small owners - they constitute perhaps a third of all the owners - who come in for the fun, lose, and leave.

Moreover, by a small number of large owners who are in the game to stay and take losses (and income-tax deductions) when they have to.

It is clear that the high passion of man to associate himself with the myth of greatness in a racehorse (like the low passion to back a winner) is not exactly reducible to ordinary business concepts.

And yet the new economy of racing has brought pressures on owners that force them increasingly, to give more attention to the business of racing than to the sport itself. An example of this kind of pressure is explained below:

The owner has paid, say, $10,000 in July or August in a gamble on a pretty good yearling prospect. He boards it at a farm for, say, $100 a month for seven to ten months, and then sends it to a track in the hands of a public trainer.

At the big tracks, the cost of keeping the horse in training ranges around $400 or $500 a month. Unless he is one of racing's real 'patrons.' the owner naturally wants to get his money out as soon as he can, and he finds that the tracks are only too eager to cooperate with him.

He races the horse as often as possible when it is a two-year-old. For the really good two-year-olds, the U.S. tracks hold out the bait of eight stake races with purses of $1000,000 or more, and plenty of other good two-year-old stakes from $10,000 up.

Top two-year-olds have, in fact, earned over $350,000, and even a fairly good one can earn a lot more than its cost and keep.

But for the owner who wants a high-grade three-year-old (the 'classic' year) and up, overracing the two-year-old is a bad idea; it may result in physical unsoundness of one kind or another.