Numbers Game

Horseracing partnerships offer the thrills of thoroughbred ownership at a more affordable price. Is it any wonder they’ve become so popular around these parts?

Four years ago, Phoenixville resident Chuck Zacney and four friends pooled their funds and purchased an unproven 2-year-old colt for $75,000. They called their partnership Cash Is King Stable, and their horse, Afleet Alex.

In two seasons of racing, Afleet Alex won eight of 12 starts and earned $2,765,800 before retiring after a leg injury. The horse launched a lucrative breeding career in 2006, commanding a $40,000 stud fee. Incredibly, Afleet Alex was the group’s first runner.

“People spend millions trying to get a horse to a Triple Crown race or a Grade 1 stakes, and don’t get a whiff,” says Zacney (pictured below), founder of the Sirrus Group medical billing company in Oreland. “It’s a game of patience, so we realize how very, very lucky we were.”

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In racing partnerships, investors are given the opportunity to play at the highest level at a fraction of the investment required to purchase and maintain the entire cost of a horse. Still, owning racehorses is a gamble in every sense of the word. Promise is fulfilled at the racetrack and then in the breeding shed. In some ways, having your own stable of horses is similar to owning a sports franchise. The partners put up the capital to acquire and keep the equine athlete in training. Equally important is giving young horses time to develop and mature.

There is one destination that all owners dream about—the Kentucky Derby. This year, a pair of racing partnerships have promising Derby contenders in Visionaire and El Gato Malo. If they stay healthy, the colts should be in the starting gates at Churchill Downs on May 3.

Trained by Michael Matz of Barbaro fame, Visionaire made a furious last-to-first surge in the final strides of the $250,000 Gotham Stakes in New York in early March. A majority interest in Visionaire—so far, the winner of three of five starts—was purchased in January by Team Valor International, Barry Irwin’s lucrative racing partnership.

Another top 3-year-old, El Gato Malo is owned by West Point Thoroughbreds (WPT) of Mt. Laurel, N.J. Undefeated in his first three starts, the horse made a huge late run to finish second in the $200,000 Sham Stakes on March 1 in Arcadia, Calif. It was a major step forward and cemented his status as a top Derby contender.

Hank Garda is one of 11 partners in El Gato Malo. He owned horses for six years before teaming up with WPT after his trainer retired 18 months ago.

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“He’ll race once more before the Derby, so we’re just praying he stays healthy,” says Garda, who lives in Lakewood, N.J. “Everyone has this dream, but for most, it’s the impossible dream. It’s a very tough business. There are roughly 35,000 foals born any given year, and 20 of them get to the Derby three years later. With all the ups and downs in racing, I can’t believe we’re this close.”

INDUSTRY ANALYSTS say partnerships comprise perhaps 30 percent of all thoroughbred owners—and that number is growing each year. Most credit Cot Campbell’s Dogwood Stable in South Carolina with pioneering the partnership concept 35 years ago.

The catalyst for a lot of the heart-pumping racing thrills of thoroughbred ownership is Terry Finley (pictured below). A native of Levittown, he began working at horse farms by the age of 12, then eventually filled in for regular grooms at Monmouth Park racetrack on the northern Jersey shore during the summers.

A graduate of West Point, Finley is a former Army captain and Airborne Ranger who holds an MBA from Boston University. After giving up on a career selling insurance, he launched his racing partnerships in 1991.

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Since its inception, Finley’s West Point Thoroughbreds has campaigned over 400 horses, and they’ve introduced over 1,200 individuals to thoroughbred ownership. Specializing in the syndication of 2-year-old racing prospects, Finley currently has 400 clients and 60 horses in training. “We want our partners to have fun,” says Finley, from a horse auction in Ocala, Fla. “That means getting together at the races, getting to visit our horses at the training barns, watching morning workouts—and, of course, the races.”

Last year, WPT counted five Grade 1 winners (the highest level of racing) in their trainers’ stables. In addition, they scored 10 graded stakes winners, and their purse earnings and wins ranked among the best in the industry.

One of those graded stakes winners is sprinter High Finance. Roy Johnston, a financial consultant who lives in Exton, traveled to New York to watch the horse win the $250,000 Tom Fool Stakes in New York last July. High Finance is expected to start his 2008 campaign in May.

“When my wife, Judy, and I were at Saratoga last summer, we watched our horse train in the mornings and talked shop with some of the trainers,” says Johnston, one of 11 High Finance partners. “Honestly, there are a lot of lows. But the greatest thrill is watching your horse win a big race.”

For WPT, the average investment is $30,000 (which buys stakes in two or three horses), and most horses have between six and 15 participants. By joining a partnership—for a minimum of $10,000—investors experience all of the thrills and benefits of ownership at an affordable price. “They also spread the financial risks across the rest of the partnership, making it attractive to many individuals who’ve always wanted to own thoroughbreds,” Finley says.

Even so, buying into a racehorse is fraught with uncertainty. If you’re in it to make money, you probably won’t. “Roughly 10 to 15 percent of the horses are profitable,” says Finley.

Buying a racehorse is the cheap part. Count on monthly expenditures of $3,000-$4,000 to cover the cost of training, stabling and caring for the horse, plus charges for the veterinarian, blacksmith, exercise riders (gallop fees) and transporting the horse to the track. Then there are entry fees for races, jockeys’ riding fees, registration fees and insurance. It even costs money to name your horse and register racing colors.

And talented racehorses get hurt all the time. Wincat, a promising Pennsylvania-bred 3-year-old for WPT, was knocked off the Derby Trail when he had surgery to remove chips in his knee in late February.

Other young prospects often hit a wall. WPT’s speedy Saratoga Russell was in the lead for most of the race at the Gotham Stakes in Queens, N.Y., in March. Then he tired in the stretch and finished eighth, his Derby dreams likely KO’d.

Still, it’s the slim chance that their horse will thunder down the stretch to victory that reels in investors.

“We tell people up-front that it’s a difficult game,” Finley says. “There are a lot of lows. That said, they’re going to be able to compete at a very high level in the business. Those thrills are indescribable.”

STARTING FROM humble beginnings in 1991 with a $5,000 purchase named Sunbelt at Philadelphia Park, West Point Thoroughbreds has ascended to the pinnacle of the sport with Grade 1 winners Dream Rush, Flashy Bull, Irish Smoke and Leah’s Princess.

Finley and a number of his partners were flying high when WPT had interests in five horses entered last October in the Breeders’ Cup World Championships. None of them won, but WPT gained plenty of publicity, and the values of their star horses soared.

Take Dream Rush. Last November, the two-time Grade 1 winner commanded the third highest price at the Keeneland Sale in Lexington, Ky., at $3.3 million. She now becomes a broodmare, and will be matched up with some of racing’s top stallions in the hopes of producing yet another star racehorse.

WPT partners split their windfall and began planning purchases for the 2008 campaign. From February through the end of the year, Finley will spend $7.5 million for a total of 20 colts and fillies that will be syndicated. “There is more downside protection with fillies, where you have the breeding element,” says Finley. “Still, most investors want to get to the [Kentucky] Derby—and that’s a colt’s game.”

What does Finley look for in a yearling?

“We want an athlete,” he says. “We don’t get locked in on pedigrees. We’ll take a little less pedigree, a little more athlete.”

Finley’s clients choose their own portfolio. “We put each horse out there individually, and our clients pick and choose,” he says. “It’s the adrenaline, the anticipation of getting that ‘big horse.’ For a successful executive in his 50s, it opens up his life to another world.”

Wayne’s John Leonard is one such convert. A lifelong race fan, Leonard was CEO of a main division of CIGNA, retiring in 2000. His group, Marchfore Thoroughbreds Enterprises, started with WPT 15 years ago. Last year, two of Leonard’s horses, Flashy Bull and High Finance (pictured below), were Grade 1 stakes winners. The latter raced in the Breeders’ Cup last October.

As for Flashy Bull, he ran in the 2006 Kentucky Derby, finishing 14th. He won four of six career starts, earning $635,000 before cracking a bone in his left front ankle last July. He was retired and sent to Airdrie Farm in Kentucky to start his breeding career in 2008. Flashy Bull’s breeding rights were sold for more than $1 million.

“He was a bit overmatched in the Derby, but showed his class last season as a 4-year-old winning four straight races,” says Leonard. “The partners all shared in his stallion sale price and got a breeding right to him. We’re not in that business, so we sold it back to West Point.”

Last year, Leonard and the seven other members of the WPT group struck out on their own, forming Marchfore. Leonard is the managing partner, and Bob Graham of Broomall is the treasurer. Leonard still retains a 5 percent ownership stake in WPT.

“We had enough critical mass, capital and experience to start our own company,” Leonard says. “With the purses increasing so rapidly in Pennsylvania, it made sense. From our owners’ perspectives, it’s much more fun to have them run locally. Significant analysis and sharp decisions are a big part of it, so we treat it with the same discipline as running any other business. Our goal is to make our investment last as long as possible.”

Marchfore contracted John Servis, the former trainer of Smarty Jones, who signed on as their trainer and bloodstock agent. He bought a pair of yearlings last September for $150,000, and if all goes well, they should be racing at Philadelphia Park or Delaware Park this summer.

“We were fortunate to get John; he’s selected some terrific young horses like Hard Spun and Round Pond in recent years,” Leonard says. “As a group, our long-term goal is to own a farm that would become the center of our operation.”

Leonard has some sound advice for those looking at the partnership game: “Become a client of a respected syndicate like West Point. They are great communicators, which is key. You always know where you stand.”

These days, Leonard and his pals employ Hall of Fame jockeys and top trainers, looking on as their horses run at major tracks across the country. “I would’ve told you that scenario was nuts, not realistic,” he says. “But we were able to pull it off.”

FOR A worst-case scenario, consider the plight of Green Monkey. Bought at a 2006 2-year-olds-in-training sale in Florida, he worked an eighth of a mile in a dazzling 9 4/5 seconds. The colt was purchased for a world-record $16 million by Ireland’s Coolmore group, which held off Sheikh Mohammed, the ruler of Dubai, in an intense bidding battle. Green Monkey was retired last February after racing only three times, finishing third, fourth and fourth.

So, you see, the big money in horse-racing is earned not at the track, but in the breeding shed. Chester County-bred Smarty Jones, winner of the 2004 Kentucky Derby and Preakness, was purchased for $39 million by a large group of partners. A year later, breeding rights to Smarty sold for $100,000 each, and he services roughly 110 broodmares per year. You do the math. His first crop of 2-year-olds will hit the track this summer and fall.

Top stallions often produce talented offspring for two decades. If you get lucky, like Cash Is King Stable, you might even wind up with a nice annuity for the next 20 years. The winner of the Preakness and Belmont Stakes, Afleet Alex was syndicated and now stands as a stallion at Gainesway Farm in Kentucky. Zacney declined to offer details about the deal, saying, “Our stable still owns a majority interest.”

Now that the partnership had its “big horse,” their Delaware Park trainer and adviser, Tim Ritchey, suggested they support Afleet Alex by buying their own mares. With the Afleet Alex windfall, they’ve also diversified their equine portfolio. “We have everything from a broodmare to weanlings to older horses that are racing,” Zacney says. “We’re involved in breeding now, and we’re also developing young horses.”

The partnership has 20 horses in training, increasing its broodmare band to 15 in 2008. Supporting their investment, all of the mares were bred to Afleet Alex and are boarded at Charlton Farm in Cochranville and Walnut Green Farm in Unionville. Next year, when Alex’s first crop of runners hits the track, Cash Is King will own eight, says Zacney.

After a big win in the Maryland Million Classic last fall, Zacney fielded a flurry of sales pitches for their talented 3-year-old filly, Moon Catcher. Their group turned down an offer of $800,000 and rolled the dice, entering her in the Keeneland Sale last January.

“Believe me, we had some second thoughts,” Zacney admits. “But she sold for $1.35 million. We’ll reinvest the money into younger horses. Once in a while, you have to take a little money off the table.”

Terry Conway writes regularly about the thoroughbred racing world. E-mail comments to

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