In the second part our new series asking key questions about horse racing’s future amid worrying economic indicators, Daniel Ross speaks to leading breeder Craig Bernick, president of the Glen Hill Farm operation
The year 2000 marked the dawning of a new millennium – and a useful line in the sand when it comes to horse racing’s economic indicators.
Since the turn of the century, the nation’s foal crop, the number of races run each year, US pari-mutuel handle, the number of operating trainers and the number of operating tracks have all been on a downward trajectory. But to where? For answers, the TRC has spoken to several key figures from various corners of the industry.
In part one, owner Marshall Gramm called for the nation’s racetracks to hold their noses and reduce takeout to stimulate industry revenues. Here our series continues with breeder Craig Bernick.
Craig Bernick (left) is president of Glen Hill Farm, a breeding and racing operation in Ocala, Florida, whose role in the industry straddles all sorts of touchstones. Managing partner in Elevage Bloodstock. Former Breeders Cup director. Former co-chairman of the Racing and Nominations Committee.
For Craig Bernick, the biggest issue facing Thoroughbred horse racing is also its biggest opportunity.
“We’ve become sales-minded instead of racing-minded,” he said, arguing that horse racing, rather than horse selling, must regain its status as the sport’s raison d’être.
“I think when the core product is healthier is when there are more horses to race to prove their worthiness, to prove their class, to prove their durability. In the old days, it was really much more about winning races, hoping to get black type. Once you get black type, hoping to win a stake. Once you win a stake, hoping to win a graded stake."
Bernick is also concerned about the industry’s current trend of “tremendous movement” towards dominance by relatively few major players at the top end.
Not a good thing
“To me, it’s not a good thing,” he said. “If you look at the economics for a breeder, a lot of them are consolidating, and the result is a smaller foal crop.
“I think the foal crop getting smaller is going to see everyone consolidate towards the better horses, the bigger racetracks and the bigger racedays. Greed is a bad word, but that’s kind of what it is.”
With concentration at the top comes a winnowing out of the middle and bottom market, Bernick said – something he sees as reflective of broader trends.
“Is it healthy? It’s healthy at the top,” said Bernick. “We have an election coming. Is the economy of America healthy because the stock market is at an all-time high? It is for the people who are heavily invested in the stock market with excess money. And yet, a lot of people don’t believe the economy is terribly healthy.”
Supply and demand
The state of the breeding industry can be boiled down to simple supply and demand. “I think commercial breeders are in the business to make money, and they’re going to breed horses that they think can make money – I don’t think it’s anything more difficult than that,” he added.
The horses that make money, he said, are those increasingly chosen for looks, potential and confirmation, in lieu of bloodlines forged upon race-day performance, durability and consistency.
Indeed, the day prior to talking, the Bob Baffert-trained Justify colt Heartland – who ran once and won once – was retired to stud, foisted by connections’ belief he had the potential to become a G1 winner.
Elliott Walden, CEO and racing manager of owner WinStar, claimed the decision made “perfect sense” on the ground that they knew what they had. “He has all the credentials – pedigree, elite ability, and looks,” Walden told TDN. “We felt he had the ability of a Grade 1 winner.”
But he wasn’t a G1 winner, of course; he was a one-race maiden winner. While stallions have risen to the top with truncated careers on the track, such commercial decisions are reflective of the dwindling importance placed on racetrack performance, said Bernick.
“I’m now involved with Casa Creed,” said Bernick, of the former Bill Mott-trainee, a real tungsten-steel sort who ran 36 times over seven seasons, garnering four G1 victories. “When he retired, very few wanted him.”
Commercial influence
Adding fuel to the fire is the growing commercial influence of new stallions entering the market. “If you look at the stallions people are supporting, a higher percentage of horses are being bred to first-year stallions than probably ever before, as a percentage of the foal crop,” said Bernick.
“Essentially, the commercial breeders are breeding to new horses because there’s a mystique about them – you never know if one’s going to become the next Gun Runner. But a horse with a proven track record that stands for the same money, there’s a ceiling on what those horses can make at auction.”
When it comes to the near-term future of the sport, therefore, what do the tea leaves reveal?
The national foal crop last year was around 17,200 – down from over 40,000 back in 1990. Does Bernick see the foal crop decline inexorably, or does he see it plateau?
“I don’t see the foal crop growing,” he said. “Every breeder I talk to is trying to lower their output and up their quality.
“[Consignor] Mike Levy told me probably ten years ago, he thought we were going to end up at about 14,000-15,000. And I thought he was insane crazy. But that doesn’t sound like such a crazy number now.”
To correct course, said Bernick, “it has to start with the racing.”
And one of the first points of order should be a revision to, and paring back of, the stakes program. “When you cut so many foals but you’re not cutting graded races, you’ve got a problem,” he said.
Race-plannning issues
Better race-planning in general would also have the effect of stimulating a gutted-out middle-market. “You’ve got many graded races, you’ve got many maiden races, but a lot of the horses are bad,” he said.
“There’s just not enough of the condition races, or the handicap races, or the qualified allowance races for horses that are better than a claimer, but not a stake horse. This is an area where horses can evolve and grow into better horses or transition into claimers.”
Bernick encouraged the nation’s racing secretaries to look at the European model. “We have to come up with a solution to keep more well-bred fillies in training,” he said.
“If a well-bred horse is running in the 60 or 70 Beyer range, they’re clearly not a stakes horse. However, if they’re sound and competitive, a great solution would be if fillies could run in condition or handicap races where they’re protected from being claimed.”
Bernick also suggested the failure of the Jockey Club’s stallion cap – which would have limited the annual breeding of stallions to 140 mares – was also a marked failure for the sport.
“I was 100 per cent in favor of the stallion cap,” he said. “I think it would have been a huge benefit to the business at large. It’s just very disappointing that the Jockey Club folded their tent there.”
Ultimately, a reinvigoration of the breeding industry begins with the owners demanding what’s fashionable. “Markets can remain irrational for longer than you can remain solvent,” he said.
“They used to throw tuna back when they caught it in the oceans because all they could sell it was in a can at the grocery store,” said Bernick. “Now, it’s the most important fish you could catch, because of sushi.
“I’m not being flippant – it’s just the way people’s opinion can change. And it’s not too far different to the horse business.”
• In Part 3 of this series, TRC speaks to Tina Bond, president of the New York Thoroughbred Horsemen’s Association (NYTHA)
Part 1: ‘Right now, there are way too many Grade 1 races’ – Marshall Gramm (owner)
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