Astar Thoroughbreds
  • Home
  • Handicapping
  • Owner Education
  • Breeding
  • Blog
  • News
  • About Us

Economically Efficient MN Horse Owners

3/7/2016

0 Comments

 
Picture
As a follow up to yesterday's blog on Minnesota owners, I was asked about racing and ownership economics. Simply put, there is a difference between well run stables versus those that just throw good money after bad.

For many years I have tracked racing stables by Earnings per Start because that is the best metric related to stable profitability. Though "EPS" is a proxy, we will never be able to exactly evaluate stable expense structures. 

In Minnesota, every horse that runs through the summer racing season will likely cost an owner near $10,000 in "racetrack" training costs, $2,000 in miscellaneous costs, $3,000 in racehorse preparation costs and $1,000 in transportation to and from the track. That $16,000 cost estimate means each horse must earn $20,000 in purse earnings to break even because Jockeys and Trainers each get near 10%  of your ownership purse earnings. (A 20% rake in total.)

Based on the data, I find that horses run near an average 6 times during the 13 week Minnesota racing season. Consequently, the earnings per start break even point is of course $3,333. ($20,000 in needed earnings per horse divided by 6 starts per horse.) With that in mind, I believe that even the most cost efficient stables need to exceed $3,000 per start to hit a break even profit number.

Interestingly, of the 58 owner entities with at least 15 Canterbury starts last year, 24 (41%) hit that $3,000 per start number, and in my view 19 (33%) clearly had profitable stables at a $3,500 per start level or higher. 

In other words, with one out of every 3 owners likely now making money in Minnesota racing, Minnesota racehorse ownership can be economically rewarding.......IF you do it right! I hope this answers the questions asked for some of you new owners and also helps you understand who you might want to look to for advice as you step into the exciting racing game.

If you are wondering, our main racing stable is Astar Lindquist Stables and we were under the $3,000 goal last year for the first time in many years. I hope this also explains why we diversified into stallion ownership and breeding many years ago. These activities generate additional stable revenue every time one of our bred or sired horses earns purse monies.

0 Comments



Leave a Reply.

    Picture

    Dave Astar

    Dave Astar is a race horse owner, stallion owner, breeder, 40 year business executive, and 50 year handicapper.

    (Astar Thoroughbreds, LLC., astarthor.com)

    He first made a name for himself as an underwriter, which is a sanitized title for a professional gambler in the insurance business. He has successfully utilized predictive methods for assessing variation throughout his career.


    RSS Feed

    Archives

    April 2020
    March 2020
    February 2020
    October 2019
    August 2019
    July 2019
    June 2019
    May 2019
    April 2019
    March 2019
    January 2019
    April 2018
    March 2018
    February 2018
    January 2018
    December 2017
    November 2017
    October 2017
    September 2017
    August 2017
    July 2017
    June 2017
    May 2017
    April 2017
    March 2017
    February 2017
    January 2017
    December 2016
    November 2016
    October 2016
    September 2016
    August 2016
    July 2016
    June 2016
    May 2016
    April 2016
    March 2016
    February 2016
    January 2016
    November 2015
    September 2015
    August 2015
    July 2015
    June 2015
    May 2015
    April 2015
    March 2015
    January 2015
    September 2014
    August 2014
    July 2014
    June 2014
    May 2014

Proudly powered by Weebly
  • Home
  • Handicapping
  • Owner Education
  • Breeding
  • Blog
  • News
  • About Us