American horse racing in 2011 had its share of ups and downs. Two developments on the positive side of the ledger are promising for 2012 and beyond.

Racing at the highest level was traditionally the bailiwick of extremely wealthy individuals because of the immense outlays involved. The increasingly popular limited partnership concept has changed this requirement, and syndicates consisting of small-percentage partners have brought in new owners at a time when racing badly needs them.

In 2011, the actively marketed partnership genre reached another milestone when Animal Kingdom won the most coveted race in the United States, the Kentucky Derby. This occurred only nine years after the bargain-basement auction purchase Funny Cide became the first entry owned by a commercial partnership to accomplish the feat.

The victory by Team Valor International’s $100,000 acquisition Animal Kingdom showed that the ownership modus operandi behind Funny Cide was no fluke; a diverse group of owners can pool relatively meager resources and have a chance to compete with the best of them. Similarly, in 2011, a Pinnacle Racing Stable partnership won the Sentient Jet Breeders’ Cup Filly and Mare Sprint with the $22,000 auction purchase Musical Romance.

As a result of the partnership structure of ownership, a collection of everyday people–whose names will never register with racing historians–possess what eluded some of the most esteemed names and biggest spenders in racing—a win in the Kentucky Derby or Breeders’ Cup.

The other trend that bodes well is the sport is able to attract as owners some of the most accomplished American entrepreneurs, and do so while they are still in their 30s and 40s. Mike Repole of Vitaminwater fame has a deep bench of racehorses and his Stay Thirsty won the 2011 Travers Stakes. Kevin Plank, another young magnate and racehorse owner, founded the fashionable Under Armour line of clothing and deployed some of his rewards to buy and restore the late Alfred G. Vanderbilt’s Sagamore Farm in Maryland, where the “Grey Ghost” Native Dancer is buried. Bobby Flay, the celebrity chef, restaurateur, and television personality, has become very active as an owner and involved with promoting racing.

Racing has shown it has appeal for eminently successful younger entrepreneurs who know how to create a brand.

Copyright © 2011 Horse Racing Business

Originally published in the Blood-Horse. Used with permission.


  1. I’m not sure that, when Funny Cide won the Derby, Sackatoga was a “commercial” partnership. It started out as just a group of friends, typical of many racing partnerships, and went commercial after Funny Cide made it a household name.

    Also, limited partnerships raise some sticky state securities law questions. While operations like Dogwood, West Point and Team Valor have the finances to hire lawyers and negotiate the various exemption requirements, the same isn’t true of lower-level partnerships, and random enforcement efforts by securities regulators at the state level to classify such limited partnerships or LLCs as “securities”are a continuing cloud on the horizon.

  2. Bill Shanklin says

    Good points, Steve. Selling partnerships in various states could be a legal tangle if states do as you suggest they might.

  3. I know that Pennsylvania and New Jersey have targeted various partnership operations. Not sure about other states.