The Winner's Circle
Owning Thoroughbreds Is an Expensive Gamble Offering Great Rewards--and Costly Losses
From the Print Edition:
Arnold Schwarzenegger, Summer 96
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While a horse is recuperating from illness or injury, the owner not only pays upkeep for an unproductive horse, but he is also faced with veterinary bills. These can include the same range of often pricey procedures humans face--X rays, ultrasound, bloodwork, surgery, even chiropractic and acupuncture--without health insurance to pick up the tab. In worst-case scenarios, the bills can add up to thousands of dollars.
Advances in veterinary medicine are saving horses from maladies that just 10 years ago might have proved fatal--and enabling them to race again. However, illness and injuries still conspire to make thoroughbred ownership a dicey proposition. In the words of actor and owner Jack Klugman, as quoted by thoroughbred owner Dragone, "If someone tells you you're as healthy as a horse, you better run for your doctor!"
During the seminar, the prospective owners were also guided through the business, tax and legal issues of thoroughbred ownership and were given a workbook that takes them step by step through the process of acquiring a thoroughbred, or at least a piece of one. After touring the barns and talking to leading trainers, the prospective owners spent the rest of the day at the races.
You've done your homework, you've gone to the races, you've observed trainers in action, you've read the trade publications like The Blood-Horse, Thoroughbred Times and Daily Racing Form. You've introduced yourself to trainers and owners and you've been to the TOBA seminar. You're ready to take the plunge, but which way do you jump? Sole ownership? Partnership? Do you get a horse out of a high-profile yearling sale or claim a horse that's ready to run?
For most new owners, it makes sense to start as a part owner. Place a call to Dogwood Stable in Aiken, South Carolina. If you're lucky you'll be left on hold, because then you'll hear the race call of the stretch run of a major Dogwood triumph, such as Summer Squall's winning run to the wire in the 1990 Preakness. Dogwood Stable is considered the gold standard of the thoroughbred partnership business, in part because it practically invented the concept in 1969.
"I was the first to put together a limited partnership for the purposes of thoroughbred ownership," says Cot Campbell, the 67-year-old founder of Dogwood Stable. "Our first was a filly named Mrs. Cornwallis and she ran a hole in the wind. She won three stakes and finished second or third in three others."
Since Mrs. Cornwallis, Dogwood has campaigned approximately 50 stakes winners that have won over 100 stakes among them. Dogwood has ranked consistently in the top one-half of one percent of the 20,000 North American stables since 1978. It currently has 60 horses in training and operates a training facility in Aiken, in the heart of horse country. In a typical Dogwood partnership, Campbell buys a horse and marks it up about 30 percent, then sells four shares of 23.75 percent, retaining a 5 percent share and the title of managing partner. Share prices for Dogwood Stable horses range from $15,000 to $77,000. Campbell bills his clients on a quarterly basis, with the average bill per share amounting to $2,000. "Except for life insurance, it costs as much to keep a good horse as a cheap one," he says.
"Here's the proposition: You might make money--you probably won't--but if you lose money, you'll be able to write it off," Campbell says. "And you'll find yourself in a tremendously exciting sport. It's a heck of a lot of fun and a great adventure. But if you don't think it will be a lot of fun, if the idea of watching your horse running down the stretch with a chance to win doesn't ring your chimes, then don't touch this game with a 10-foot pole." Campbell takes every opportunity to warn people off. "I rub people's noses in it," he says. "Thirty percent will make money, 70 percent won't. It's like drilling for oil. You're going to hit a lot of dry holes."
Mark Rovner's LSI Gold Stable operates a bit farther down the thoroughbred food chain. The 33-year-old Long Island real estate lawyer wanted to make the move from fan to owner, but he got sticker shock when he saw how much it would cost to get the kind of horsepower he would need to compete in New York.
"I tried to buy a horse alone, but at my level I'd be in the low end of the game," Rovner says. "I came across a book on thoroughbred syndication--it was 4,000 pages long and boring--but I read it from cover to cover. I had done real estate syndications and saw that thoroughbred syndication was a way to make a high level of racing affordable."
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