by Al Cimaglia
June 21, 2018
Back in the spring of 2016, I spoke to Anthony MacDonald concerning his standardbred fractional ownership group called thestable.ca. At that time Anthony and his wife Amy were into their second year running the operation. I was impressed with the concept but more so with what Anthony realized. He knew his operation would only prosper to the degree he envisioned if the entire harness racing industry did well.
In Anthony's opinion, the best way to grow the fan base is for fractional ownership to become the cornerstone of the industry in leading the way to grow and retain new fans. Anthony was candid, he didn't promise profits. Although there hasn't been any financial gain I have enjoyed my time with thestable.ca. Last fall my portfolio grew as I increased my stake in yearlings. Currently, I have shares in six two-year-olds and one three-year-old.
What the MacDonald's understood is the way to grow the harness racing fan base isn't by offering $1 hot dogs or free concerts at the track. The way to keep people engaged is to have them become owners. Then they can experience the excitement, learn and understand the sport while having fun. By participating in fractional ownership an owner can have a lower entry cost and less exposure to risk.
When I first spoke to Anthony he had a little over 80 clients, today there are 448 owners in ten countries. That type of growth for any industry would be great, but in harness racing, it's simply astounding. Make no mistake, the amount of work it takes to break and train young horses is a ton. Almost every yearling thestable.ca has purchased the past two years has qualified and made it to the races.
The most important reason Anthony has been successful is his communication skills. There isn't any empirical evidence to support what has been reported, but supposedly in one day the average for words spoken by a man is 7,000. I can assure you Anthony's daily total is well over 7,000 and probably beyond the estimated 20,000 average for women. Combined with the hours on the phone, emails written every day, the time in the barn and at the track the MacDonald's earn every penny.
If the MacDonald's started their fractional ownership stable with a myopic view, doing what would be only good for them, their success would be limited. Instead, Anthony always has welcomed others to do the same. He promotes the sport and flies around the country to preach to other trainers about the benefits of fractional ownership. Again, the stronger the industry and the larger the pool of harness racing fans the opportunity for everyone to make a good living increases dramatically.
The MacDonald's realized from the start they couldn't be concerned with only themselves. What an interesting concept, to focus on the big picture. I wonder how much harness racing would benefit if race tracks in different jurisdictions had the same thinking.
The retention ratio of clients at thestable.ca is at 93% and it's not by accident. It's because a young couple from Guelph Ontario saw an opportunity, took a chance, did the work and put in the time to educate their clients. Below is an email Anthony sent out over the past weekend to every owner in thestable.ca, that includes those with a single share of a horse or a substantial holding.
It's one thing to say everyone is treated the same but to operate that way is what counts.
This time of year, I rarely find free time, except while waiting for flights.
I enjoy using this time to write clients, catch my breath and reflect on the direction of our industry. What improvements have been, or could be made? I usually end up explaining the role I see fractional ownership playing in the future of our industry. This is one of those times.
Earning money in this industry is tough. We all are very aware that horse racing needs to grow and expand as an industry. But how?
Fractional ownership's inclusiveness has proven to be a path back into the general public, a place in which racing desperately needs to exist. Models like thestable.ca have absolutely and unequivocally shown that reaching the mainstream is very possible.
Why? Because affordable racehorse ownership marketed as an entertainment product is financially unmatched in society. You cannot attend many mainstream sporting events for the costs attributed to fractional ownership in horse racing. And the first-person participation level makes our sport absolutely unique.
We have an exciting product to watch for any sports junkie, and the competitiveness and athleticism in that regard is almost unparalleled. The stories within this industry are dramatic and inspiring and we don't need to pretend to share the real, everyday challenges of our audience. We're real people, the same as them. This connection is immediate and honest and quickly establishes engagement.
One of the most critical components of welcoming new owners is the ability to appeal to many different demographics. This has been a real stumbling block for horse racing over the years. Fractional ownership has broken down those barriers and has proven that the fluidity, excitement, entertainment, and sheer exposure of what is provided for such a small financial investment can attract even the most selective investors. This small sampling of growth is accurate and real but needs to be duplicated all over North America.
Yesterday, at our barn, we had a large crowd. Within a 10-meter radius, we had a 23-year-old first-time owner with zero racing experience. Beside him was a small family with parents in their 40s who are also first-time owners. Next to them was a gentleman who came to buy shares in an Indiana trotting colt and some Ontario pacers. I asked if he had ever been licensed. He said yes, but his last horse ownership endeavor was 50 years ago!
This is the power of affordable ownership: a millennial newbie, a young family, and a former owner five decades removed, all standing shoulder to shoulder.
Not only are we re-engaging the people who built this game, but we're attracting substantial interest from people with absolutely no prior connection to horse racing. This proves that the entertainment value (completely separate from monetary ROI) inherently offered in horse racing is real and tangible. As we bolster our marketing and advertising in this direction, we'll see more people as diverse as the example illustrated above join our ownership ranks where they wouldn't have otherwise known the opportunity to own a racehorse ever existed.
Marketing and delivering the entertainment value of ownership in horse racing relinquishes the pressures of delivering a monetary return, which was the only model this industry has ever really deployed. Fractional ownership which emphasizes delivering an exceptional entertainment experience changes the currency. The focus shifts from an ROI of dollars and cents to an ROI of excitement, anticipation, communication, community and participation. This relieves the burden of pressure-cooker fiscal returns for trainers and stables and challenges them to market themselves in new and exciting ways.
Sure, we all want to win races, and make money. But, in the case of thestable.ca, we have a 93% customer retention rate with 448 owners in 10 countries. As I post paraded in front of the grandstand at Woodbine Mohawk Park with Lawmaker last night, the roar from the crowd made it apparent where our clients were standing, clustered together in their own cheering section. For the most part, our clients are on-site every night their horses race. They often travel several hours, often crossing borders.
That's good news for us, a great experience for our clients, beneficial for the tracks where we race and the surrounding businesses where clients will purchase accommodations, fuel, food, etc.
This model is simply great for horse racing.
For those of you who understand that the racing industry will need to meet/exceed growth benchmarks established by our government partners in the coming years (both in fan base and revenue), you should recognize that we need to explore all viable channels for growth.
For the trainers reading this, there are 8 billion people on earth and every one of them could be your next client, if you simply pursue them. For the tracks and affiliate casino operators, we can help you efficiently engage enthusiastic clients you could never affordably reach without us.
To the industry in general, which may feel we are rowing against the current: there is a way forward.
Just this week, thestable.ca has qualified 36 youngsters and raced in two stake races. As I sit in Pearson Airport waiting for my plane to Chicago (to race two more horses tonight at Hawthorne) I've realized the one question I haven't been asked from any of our clients:
"How much money can we make?"
That says a lot about the affordable ownership model, what it's really selling, and the fine folks who are our clients at thestable.ca.
Affordable ownership is delivering the excitement of horse racing to the mainstream and delivering the mainstream to the horse racing industry.
Here are some other fractional ownerships stables for those interested: Dee Hotten Stable, Dream Catcher Racing, First Turn Stable, Hold The Line Stable, HorsePlay Racing Stable, Landmark 10, Summer Fling Racing Team, and the Winners Circle Racing LLC.
Check me out on Twitter, @AlCimaglia.