David vs Goliath: the growing divide between small and large U.S. stables

Belmont Park: trainers based at any New York racetrack are encouraged to race their horses at that facility rather than elsewhere. Photo: Susie Raisher/NYRA.com

Balancing the books at trainer Anthony Saavedra’s small ten-horse barn at Santa Anita can sometimes feel akin to the feeding of the 5,000.

Let’s start with his $85 per horse day-rate, which breaks down something like this: $15 gallop fee; $20 to the groom; $25 in hay and straw, and tack supplies and maintenance; $7 to the hotwalker; and $3 for workers’ compensation.

That leaves just $15 per horse, per day to pay for all the other routine stable necessities – the soap and the shampoo, the bandages and the boots, the webbings and the feed-tubs, the blankets and the fans, the veterinary products Saavedra will pay for out of pocket, and all the other small but ultimately costly items needed to keep the show on the road.

The advantages — monetary and otherwise — that Saavedra and his wife, Jennifer, derive from doing a lot of the riding, grooming and hotwalking themselves can’t be emphasized enough. “We like to stay hands on,” he said at the end of a hot, energy-sapping morning on the track, an imprint of sweat on his t-shirt from where his back-protector rested. “I feel like we do better when we’re in the middle of it all.”

Yet still, the financial tightrope act of running his barn can prove perilous.

Saavedra last raised his day rate about three years ago, by $5. He thinks he should raise it another $10 at the very least, but is loath to, for fear his owners will up-sticks and take their horses elsewhere. And so, his profit margin is dictated by the successes he enjoys on the track, and his ten percent share of the winnings.

The boon years are those when Saavedra’s small battalion of horses pocket $300,000 plus in total earnings, like they did in 2005 and 2006, and nearly did in 2009. The bust years are those when his horses’ earnings hover around the five-figure mark, which they did between 2013-2015.

What’s more, in Saavedra’s eyes, the environment for small trainers in the industry is becoming increasingly inhospitable.

“It always has been tough,” he said. “But here, of late, it’s been a real struggle.”

Startling results

Small trainers barely eeking out a living is, indeed, no new phenomenon – the juxtaposition of the little ‘mom and pop shop’ outfits against the nation’s behemoth so-called ‘super trainers’ is a component of the David and Goliath narrative that has long characterized the sport.

But many believe that, of late, the disparity between the two has grown, that as the economic stability of the industry as a whole has gotten shakier - dwindling numbers related to attendances, horses, revenues, purses, and so on — the nation’s Goliaths have consolidated their power, while the nation’s Davids are being further squeezed from the mix.   

As a result, the role small trainers play towards the greater health of the industry has been brought under a sharper focus.

In California, for example, talk has recently circled the re-introduction of a cap on the number of horses a trainer can house at any one facility.

Restricting barn sizes, reasoning goes, will lead to horses being disseminated more evenly among trainers, including smaller ones, leading to bolstered field sizes and a more appealing product for gamblers.

The flip side of this coin are concerns about the free market. How much involvement should the industry have in artificially shaping the size of a trainer’s business?

California

In California, the number of trainers is on the decline.

Interestingly, while the number of Thoroughbred trainers with at least one horse that made at least one start in California fell by roughly 25 percent between 2007 and 2016, the number of trainers with fewer than 20 individual starters decreased by only about 20 percent, according to data derived from Daily Racing Form chart-files.

  • Over the same period, the number of trainers with more than 150 individual horses (that made at least one start in California) halved, from six to three.

  • The disparity by which purse revenue in the state is distributed is still as pronounced as ever. In 2007, 86.5 percent of total purse revenue went to 20 percent of trainers. Last year, nearly 84 percent of earnings were annexed by the top 20 percent.

In regards small trainers nationally, however, the results are startling.

National figures

Since 2007, the number of trainers nationwide has decreased markedly.

  • In 2007, there were just over 7,500 trainers with at least one horse that made at least one start. Last year, that number had shrunk to a little less than 5,000 trainers. This represented a drop of 34 percent.

  • During that time, the number of trainers with at least 150 individual starters fell by only one, to 28 in 2016.

  • In contrast, the number of trainers with 20 or less individual starters fell by nearly 35 percent. In 2007, there were 6,200 trainers with 20 or less individual starters. Last year, there were a little over 4,000.

Expanding the search parameters, the divide between large and small trainers is still as pronounced.

  • The number of trainers with 21 - 49 individual starters decreased by nearly 31 percent between 2007 and 2016. The number of trainers with 50 - 99 individual starters decreased by nearly 33 percent.

  • The number of trainers with 100 - 149 individual starters, however, decreased by only 14.5 percent.

  • It would appear, then, that the smaller trainers are the ones primarily leaving the business: of the drop of 2,500 or so trainers between 2007 and 2016, trainers with fewer than 50 starters accounted for at least 2,400 of those missing trainers.

(Note: I’ve rounded figures off to reflect how some trainers in the DRF chart-file are counted more than once)

TOTAL TRAINERS IN THE U.S.

 

2007

2008

2009

2010

2011

2012

2013

2014

2015

2016

*Number of trainers

7,576

7,256

7,142

6,839

6,584

6,329

5,971

5,623

5,243

4,998

Top 20% of trainers

1,515

1,451

1,428

1,368

1,317

1,266

1,194

1,125

1,049

1,000

HOW STABLE SIZES BREAK DOWN PER INDIVIDUAL STARTER

 

2007

2008

2009

2010

2011

2012

2013

2014

2015

2016

10-year difference

150+ horses

29

27

30

24

23

25

30

30

27

28

-3.4%

100-149 horses

55

60

40

48

50

57

46

46

50

47

-14.5%

50-99 horses

284

263

273

237

231

215

210

196

201

191

-32.7%

21-49 horses

931

919

899

885

821

784

767

728

670

643

-30.9%

1-20 horses

6,277

5,987

5,900

5,645

5,459

5,248

4,918

4,623

4,295

4,089

-34.9%

Total

7,576

7,256

7,142

6,839

6,584

6,329

5,971

5,623

5,243

4,998

-34.0%

TOTAL INDIVIDUAL STARTERS IN THE U.S. - AND HOW MANY THE BIGGER OPERATIONS HAVE

 

2007

2008

2009

2010

2011

2012

2013

2014

2015

2016

Total horses

97,986

94,634

93,354

88,551

84,617

82,840

79,530

75,264

72,447

69,634

Horses saddled by top 20% of trainers

61,565

59,412

57.504

54,252

51,842

50,662

49,458

47,194

45,586

44,166

% of horses by top 20%

62.8

62.8

61.6

61.3

61.3

61.4

62.2

62.7

62.9

63.4

 

Earnings

Total overall purses have declined by some $85 million in the last decade (a sizeable drop occurring between 2007 and 2009).

  • Between 2007 and 2016, the percentage of total purse earnings taken by trainers with 100 or more individual starters grew from a little more than one-quarter of all earnings (27 percent) to a little less than one-third of all earnings (32.2 percent).

  • Some 29 trainers with 150 or more individual starters netted 16.8 percent of total purse earnings nationally in 2007. In 2016, they netted 20 percent of total purse earnings.

  • In contrast, all three brackets of trainer with less than 100 individual starters per year (1-20, 21-49, 50-99) saw a decline in the percentage of total prize money earned.

For example, some 931 trainers with 21 – 49 individual starters netted 27.6 percent of total purse earnings nationally in 2007, reduced to 25.2 percent of purse earnings last year (when there were roughly 643 such trainers).

  • It’s not surprising, then, that the same disparity in purse revenue distribution exists nationally as it does in California – and, like California, this trend has existed for a while. As of last year, the top 20 percent of trainers annexed just under 86 percent of the purses. In 2007, they netted 86.7 percent of total earnings.

WHO EARNS WHAT

 

2007

2008

2009

2010

2011

2012

2013

2014

2015

2016

**Total purse earnings ($)

1,124m

1,016m

1,029m

988m

1,012m

1,077m

1,088m

1,068m

1,049m

1,038m

Earnings by top 20% of trainers

974m

876m

891m

852m

869m

925m

925m

915m

898m

891m

As % of total

86.7

86.2

86.5

86.2

85.9

85.8

85.7

85.7

85.6

85.9

Earnings by others

149m

140m

139m

137m

142m

153m

155m

152m

151m

147m

Purse earnings per trainer

Interestingly, because the number of smaller trainers has decreased so markedly, the average smaller trainer appears to be garnering more prize money than a decade ago. In fact, all brackets saw an increase of average annual purse earnings per trainer.

  • In 2007, a trainer with 20 or less individual starters was making an average $36,262 in purses. Last year, they were making an average $49,711 – an increase of over 37 percent.

  • And trainers who had between 101 – 149 individual starters saw their average annual purse earnings increase by nearly 30 percent.

HOW THE ‘SUPER TRAINERS’ FARE

 

2007

2008

2009

2010

2011

2012

2013

2014

2015

2016

Trainers with 150+ horses

28

27

30

21

21

25

30

29

27

28

Their earnings ($)

186m

152m

148m

120m

118m

180m

199m

195m

189m

208m

As % of total

16.6

15.0

14.4

12.1

11.6

16.7

18.4

18.3

18.1

20.0

 

HOW THE  SMALLEST TRAINERS FARE

 

2007

2008

2009

2010

2011

2012

2013

2014

2015

2016

Trainers with 20 horses or fewer

6,277

5,987

5,900

5,645

5,459

5,248

4,918

4,623

4,295

4,089

Their earnings ($)

228m

203m

210m

208m

224m

232m

227m

215m

209m

203m

As % of total

20.3

20.0

20.4

21.0

22.2

21.6

21.0

20.1

20.0

19.6

 

Healthy attrition?

This data set only provides a snapshot of a vastly more complicated picture. An important factor, for example, is the sharp declines in foal crops, which has led to a nearly 28 percent reduction in the number of individual runners that made at least one start - from almost 66,920 in 2007 to 48,332 in 2016. Naturally, fewer horses equates to fewer trainers.

But, on face value, what these figures suggests is that, as the training environment has become increasingly more competitive, the nation’s smaller operators have been disproportionately impacted, at least numerically.

All of which begs the questions: are these trends a reflection of healthy attrition? What are the main obstacles that small operators face? And while trainers, on average, appear to be earning more prize money, is it enough to offset the innumerable challenges and costs of running a small barn?

To get an idea, I sought the perspective of small trainers working away in the trenches – those whose opinions aren’t typically heard…

‘It’s a totally different game now’

“The biggest thing that has changed is the amount of stalls that these big stables get,” said Eduardo Azpurua, who trains about 12 horses at Gulfstream Park. “It comes down to a monopoly.”

A G1 winning trainer during his first iteration as a handler, Azpurua stopped training in 2008, only to start up again last year. And he said that this hiatus has afforded him a “fresh look” at the industry. “It’s a totally different game now,” he said.

Azpurua argued that, during his most illustrious years as a trainer, the more prolific stables were more limited in the amount of horses they could stable at any one facility. Consequently, they would distribute their numbers more evenly throughout the nation.

“There used to be a kind of filter where the big guys would get the best clients, and the other owners would have to find other trainers,” he said. “But the racetracks really have helped the big stables flourish by giving them a lot of stalls and cutting down on what they give the other people.”

‘We’re mirroring the corporate world in racing’

Azpurua isn’t the only handler who believes that large stables wield an advantage over their smaller-sized counterparts.

“I have a job to do and the big guys have a job to do, and sometimes that conflicts,” said New York-based trainer David Duggan. A licensee for 15 years, Duggan currently has around 15 horses on his books.

With an eye to boosting entries, trainers based at any New York racetrack are encouraged to race their horses at that facility rather than elsewhere. And those trainers wanting to ship runners “out of town,” Duggan said, are warned that they might lose stall space if they do.

Only, this arrangement impacts smaller barns more than the larger stables, who can leverage their stable firepower to run horses elsewhere with less fear of reprisal, Duggan said.

“You’re trying to fight your corner to do the best for your clients, and the bigger guys appear to have an easier time of doing that,” he said.

(Note: the New York Racing Association failed to respond to a request for comment in time for publication.)

‘We really need to make sure there’s a level playing field’

According to Tim Ritvo, a former jockey and trainer, and now chief operating officer of the Stronach Racing Group, many track operators are now discussing and taking seriously the implications of any possible industry advantage enjoyed by a small contingent of large stables.

“We talk about this a lot, but we don’t act as much as we should because it’s harder to act and to change the culture,” he said.

From a racetrack operator’s perspective, therefore, what are some possible solutions?

“We can make it a lot harder on them by having stall limits,” Ritvo replied, while offering the caveat: “But you don’t want to stop free enterprise.”

Heightened security can sometimes give smaller trainers “more of a chance”, he said. Better understanding of the racehorse inventory on the backside can make it easier to card the most suitable races. An online entry system designed with a certain degree of transparency could help towards this, too, he said.

New owners could also be better educated on the more nuanced benefits that small trainers can afford their horses, like the individual care and attention that larger operations aren’t always able to provide, Ritvo added.

“There’s something so alluring about these super trainers,” he said. “It still bothersome to me as to why owners gravitate towards that.”

Ultimately, it’s in racing’s “best interest” to have a balanced racing program, he said. “Meaning, owners will spread their owners through a vast number of trainers … We really need to make sure there’s a level playing field.”

‘It’s hard to find good grooms and staff now’

Each small trainer I spoke to (some unwilling to be quoted in the story) put a different emphasis and spin on what they considered their greatest obstacle to running a successful small stable, but all agreed on one particular bane of their working existence: finding and maintaining quality help.

“It’s so hard to find good grooms and staff nowadays,” said Alexis Barba, a Santa Anita-based trainer with eight horses in her care. Barba has been training for over 15 years. Before then, she worked as an assistant to trainer Eddie Gregson, who operated a large California-based stable.

As fewer people grow up around animals — and around livestock in particular — standards of horsemanship have fallen among the new recruits headed into the industry, she said.

“They used to be kind of ready-made,” she added. “That’s not the case now.”

One problem, said Anthony Saavedra, is that once he and his wife have spent time and energy training new grooms and  hotwalkers — taking valuable hours over many weeks to teach them the necessary skill sets to be left unsupervised — too often that worker will then move to larger barns, lured by the promise of greater job security and higher wages.

“We’re so hands-on here. We can teach a hotwalker how to be a groom,” he said. “But, kind of like a good horse, the minute they get going good, then they migrate to the big barns where they feel a little more security in their job.”

‘It’s a crisis’

An even more salient staffing problem concerns the new administration’s immigration crackdown, occurring as trainers are hit by changes within the H-2B visa program, by far the most widely utilized visa in the industry.

The returning worker exemption was discontinued last year, and a proposed increase in the number of visas issued this year to offset problems raised by ending that exemption has yet to materialize.

“This is the worst it’s ever been,” said Will Velie, an Oklahoma-based immigration attorney, whose client list includes many in the industry. “This is huge for trainers big and small … It’s a crisis.”

‘It’s a constant, constant struggle’

Despite dwindling numbers, new trainers are still entering the sport. New York-based Ray Handal has only been training since 2014. He started with two horses. Now he runs a stable of 22.

“Things have been going in the right direction,” Handal said, “but it’s a constant, constant struggle.”

The toughest aspect of building up a new stable is the month-to-month expenses that leave him counting out expenditures “down to the very last dollar”.

“There’s an onslaught of bills from every direction, especially in New York, where everything’s so expensive,” he said. “Workers’ comp is definitely a juggernaut in New York – it’s so expensive here.”

But the workers’ compensation issue isn’t solely a New York problem. Only three jurisdictions — California, New York and New Jersey — mandate trainers to provide workers’ compensation coverage. And experts on the topic say that trainers in those states are burdened for doing the right thing, typically paying more for coverage than trainers in jurisdictions where it isn't.

Even then, in those non-mandated states trainers can pay between ten to 20 percent of payroll for workers’ compensation.

‘I never thought about doing anything else in life’

Nevertheless, Handal doesn’t regret making the move into training. “I started out when I was 14 years old, and have been in the industry the whole time,” he said. “I guess when I started out, I never thought about doing anything else in life.”

And, not surprisingly, there’s a tangible sense of grit and determination among those scraping together a living near the bottom of the sport’s food chain.

In David Duggan’s eyes, the “corporatization” of the industry — with greater emphasis placed on things like return on investment, and public branding — means that smaller trainers must look to the larger outfits to identify and mirror as best they can what they do that works.

“Things are changing,” said Duggan. “You’ve got to change your business model … and create value for the client.”

All of which is geared around that one thing that unites all trainers, large and small: discovering that twinkling diamond in the rough.

“We’re just waiting for the next big horse to come along,” said Anthony Saavedra. “At the end of the day, I wouldn’t have chosen to do anything different with my life.”

  • Note: all statistics are calculated using data derived from Daily Racing Form chart-files.

 

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