The Jockey Club and the Thoroughbred Owners and Breeders Association (TOBA) announced last week that the former had acquired a 51% stake in Blood-Horse Publications, the centerpiece of which is the weekly Blood-Horse magazine. James Gagliano, president and chief operating officer of the Jockey Club, explained why the acquisition was made:
“The Jockey Club stewards believe that a publication with the history, influence, and brand recognition of Blood-Horse is a considerable asset for the Thoroughbred breeding and racing industry, and there are certain synergies that can make it an even stronger publication as the result of this transaction.”
I look at the Jockey Club purchase of Blood-Horse Publications from my own experiences as a business-school professor, a businessperson, and a marketing consultant. In my view, the deal is unquestionably in the best interests of both the Jockey Club and Blood-Horse Publications, for the following reasons.
First, the Jockey Club has a deep and proven reservoir of business expertise in the executives who are responsible for day-to-day operations. These individuals are not known to micromanage the various Jockey Club subsidiaries, but are there to provide oversight, guidance, and resources, as well as to facilitate the cooperation among the subsidiaries that promote efficiencies and synergies.
Second, the Jockey Club membership ranks are filled with people who are demonstrably committed to the advancement of horse racing, but who come from very diverse backgrounds. While some individuals have been eminently successful in businesses that have nothing to do with horse breeding and racing, other members have earned their livelihood within the horse racing and breeding enterprise. Such vast knowledge, divergent capabilities, and single-minded devotion to the furtherance of horse racing are unique among industry groups. As a result, Blood-Horse Publications is in the hands of highly competent people who want it to succeed for the good of horse racing.
Third, in acquiring the majority interest in Blood-Horse Publications, the Jockey Club has purchased a venerable asset whose magazines have strong brand equity and a history of having editors and writers who produce award-winning articles.
Fourth, the Blood-Horse magazine has a critical mass of (paying) subscribers who, on average, are very affluent. This fact appeals to some kinds of advertisers more than actual circulation figures. Thus the magazine’s upscale audience can potentially be used to attract advertisers that one might not ordinarily associate with horse racing. The Blood-Horse’s digital edition and its recently launched Spanish-language version position it to accommodate changing reader preferences and to reach an increasingly important demographic cohort, respectively.
Lastly, Blood-Horse Publications is now backed by a financially stronger organization than TOBA.
Though the Jockey Club and its members are sometimes criticized as being elitist or wanting to run racing for their own benefit, the facts tell a different story. An objective and dispassionate examination of the record shows that the Jockey Club has spent large sums of money to strengthen the American horse racing franchise. For example, the Jockey Club wholly or jointly owns and operates eight entities (nine with Blood-Horse Publications) vital to horse racing, convenes an annual roundtable covering contemporary topics, and showcases horse racing on television. On at least two occasions, it has commissioned in-depth studies by McKinsey & Company, the premier management consulting firm in the world.
The preeminent non-racetrack organization in American horse racing has acquired the majority interest in the equivalent of the Dow-Jones Company of its industry. With creativity and innovation, the entire horse breeding and racing industry will be better off from the combination.
(Disclosure: I occasionally write for the Blood-Horse as a sideline but I am not an employee of Blood-Horse Publications nor have I ever been.)
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