Belinda Stronach wants to bring horse racing into the modern world
Belinda Stronach, by any measuring stick, is one of the most powerful people in horse racing. As president and chairman of The Stronach Group, which owns Santa Anita, Golden Gate and tracks in Florida and Maryland, she runs the family business and has taken it on herself to try and remake the struggling sport. Stronach, 52, is not unfamiliar with the spotlight having been a Member of Parliament in Canada from 2004 to 2008. She was elected as a conservative and then re-elected as a liberal, so she is not afraid to go her own way.
Stronach, who does not grant many media interviews, sat down with The Times for 30 minutes recently at Pimlico Race Course in Baltimore to discuss the future of Santa Anita and horse racing. She was equal parts confident, charming and cautious but more than anything stayed on the points she wanted to make. The interview is edited for brevity and clarity.
[Stronach Group chief operating officer] Tim Ritvo has said that progress has been slow at Santa Anita. Is the track where you want it to be?
I have tremendous faith and confidence in Tim. … When you look at his background, he was a jockey, he’s been a trainer, [he’s been an executive]. I believe the horsemen respect him. People know that he has the best interests of not only the company in mind, but the industry. He’s truly passionate about creating a viable, sustainable growth in our sport. What we’re putting forward are those kind of things to make sure that we look to how to create that feeder system, in that we have more people interested in becoming horse owners. We create greater field sizes, which is good for betting and our sport. He will do the best he can to take Santa Anita even more forward.
But is it as far along as you thought it would be after this amount of time?
Tim is making great progress and I continue to think he will make great progress.
Do you have any kind of timetable?
As a management team, we want to push as aggressively as we can but within reason of what’s doable and what makes sense. We’re a very committed group, we move as fast as we can and we make the changes that are most readily apparent. I don’t want to state a timetable because, as you know, it is a stakeholder (owners, trainer, jockeys, regulatory agencies) sport. … We want to make sure we’re pushing forward with the changes that ultimately strengthen the sport. We have to make sure we do that properly with all the stakeholders involved.
What kind of metric do you use for success?
It’s a number of things. First of all, it would be profitability. At the end of the day we are a business. We’ll be measured by the profits we make. It’s looking at things like handle. It’s looking at the interests of all of our stakeholders. There’s also the employee perspective, that we have happy, engaged employees, that we’re making profits, that the handle is up, increasing field sizes, are we cultivating more owners and looking at it that way. Financials will show if we are doing things right.
Ultimately, it’s got to be about the fans because we are a very successful company within an industry that has seen handle decreasing over the years. So, our goal is to run a great company, always keep the interests of the stakeholders in mind, the safety of the horses in mind and jockeys. At the same time, making sure we grow our sport. We have to grow the fans and introduce new fans. And we have to make sure we do it through technology and creating a compelling guest experience.
Would you be happy with 3% growth? 5% growth? 10% growth?
We’re not happy with 3% growth a year. But we’re a private company and those are things we don’t really talk about. Let me just say it’s about growing handle, making sure we look at what is the best interest of the industry. So, it’s a bunch of different metrics that we would attribute to being successful.
It’s no secret that California is a really tough case, because it’s an island and you don’t have casinos. Can you see a scenario where if things just flatten out that you would look to realize the value of that land?
First of all, I don’t believe things will flatten out because we are very thoughtful, very proactive management team. We’re very committed to horse racing. I truly believe it’s the last great sports legacy platform that hasn’t modernized. … I feel we will get there. There’s no question because we’ve seen this with other tracks in different jurisdictions, and many of those tracks were built in the 30s and 40s and 50s when they were on the outskirts of cities. Now you have encroachment of the city around the race track, which makes the land increasingly more valuable. But I believe we can run a very successful racing, wagering and entertainment operation that will be compelling enough to say we can do this, to say we can achieve this as to turning this purely into a real estate play.
We’re also very fortunate that we have tremendous properties with a lot of land surrounding our tracks. And the thesis we are moving forward with is that we can build a live, work and play ecosystem around those race tracks to support the racing business even more. I think in some cases we have to move, where the jurisdiction allows, like Gulfstream Park where we can look to night racing on a Thursday and Friday night. Most people are working during the day and can’t go to the races. We could do a lot by offering that. Those are things we are looking at. Some of that requires legislative change but we’re pursuing those options already.
So, you’re committed to running a race track that may make less money than turning it over to land which is worth more?
I’m not convinced it will be less profitable. For any business, to be sustainable it has to be profitable. And to be profitable innovation is required. We are a customer business, so we have to ask ourselves what does the customer want? We haven’t reached that point. We believe that there is so much more that we can do to create that great compelling experience. We’re going to take horse racing to another level. I’m really excited about that opportunity and I believe we can have great real estate development surrounding the race track and great racing entertainment business within the race track.
Do the extra rules and regulations of California frustrate you?
With respect to rules and regulations, we have make our case for what we need to do as a business to best serve the industry and make sure that we can create … We also need to argue our case for what we need to make sure we have a robust and sustainable industry going forward. I truly believe that horse racing is the last great sporting legacy platform that hasn’t modernized. We have to make the case for what we need to do to make sure our sport doesn’t stay steady. We need to grow our fans and we need to look at that.
It’s not just being able to compete against other race tracks, and other companies that offer horse racing. We are competing for customers beyond horse racing. We need to make sure we can curate the experiences on-track that perhaps those that want to go to a football game, baseball game or some other kind of entertainment, that we curate that experience that it’s compelling enough to get them to our venues and our facilities. So, that’s our focus. Today’s customer, when they come to a stadium or venue, they want to be able to create their own adventure. So, we need to make sure we have all kinds of different offerings that appeal to a variety of potential guests.
So, are you OK if horse racing is subjugated to the entertainment of the evening?
I wouldn’t say subjugate. Our goal is to produce a compelling product offering. Now if that happens to be a daytime experience, likely on the weekends, it’s to really create a fun daytime experience. Our company is an entertainment company … and we’re competing against football, baseball, music festivals, all those kind of experiences. We feel we can do that. We have a very dynamic sport that is exciting and engaging and very fast paced. We have wagering. And to be able to curate that in a way that brings people to our venues, we think we can do that through both the entertainment lens and the hospitality lens. We’re looking at way-finding apps so people can navigate through the facility in a seamless way and providing a seamless digital wagering experience.
After the Pegasus you said if you can’t move the statue, you can’t move the race. Does that mean the Pegasus is permanently in South Florida?
I say for many years to come it’ll be in South Florida. We’ve developed really good relationships in South Florida. We appreciate those partnerships and relationships. It’s a great iconic race for Gulfstream Park. That’s not to say we won’t add additional races to create the road to Pegasus and different derivatives like a turf race. Those are things we’re discussing right now. We’re looking at other races in other markets.
What do think is the biggest problem facing racing?
Stepping back, when you look to the ‘50s, there was a lot of attendance, people went to the races. Handle was high. But the industry didn’t evolve and stay competitive and other sporting events and properties started to take away market share. Television wasn’t embraced at the time because they felt it would impact on-track attendance. Any time you ignore technology and don’t embrace what the customer would like, then that’s a real risk. The industry hasn’t been innovative enough, embraced technology and created those compelling, creative experiences that customers wish to have today. …The beautiful thing with our sport is it’s fast and dynamic, it’s exciting and it’s constant. So that’s one of the things we’re heavily focusing on for the future is technology and how to create a seamless digital experience across the board.
How will sports betting change the way you look at things?
First of all, we need to look at what we need to do within our own industry to broaden the fan base, to attract more guests to our venues and to be able to introduce horse racing and wagering to a whole new set of fans. So, one of the things we have been focusing on is developing a new app that looks at the gamification of horse racing and makes it more fun and easy to wager but still involves a game of skill. It looks at one wallet, so to speak, because we don’t carry cash any more these days.
It makes it much easier to be able to wager on horse racing. When we look at sports wagering, that is complementary to what we’re doing. Horse racing and sports books are much more complimentary than table games or slot machines. We feel there is a good synergy there and I agree that we’d like to be able to have that product offering ay each of our venues. It will depend on a state-by-state basis how each state chooses to deal with sports wagering. But, we’re very fortunate we already have the brick and mortar facilities that are accustomed to taking such wagers. We are looking at the risk management side of things to be able to offer sports wagering to go along with the pari-mutuel wagering we currently offer.
Any plans of buying any more tracks?
We are looking at various opportunities in different states right now. But nothing to announce at this time.
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