Duchossois optimistic about horseracing's future
Richard Duchossois, part-owner of Arlington Park and chairman of The Duchossois Group, gave a speech to the Thoroughbred Club of America in January in Lexington, Ky. Here is a text of that speech.
"Thank you, Ted, for the wonderful introduction. I don't deserve it. And thank you all in the Thoroughbred Club of America for making me your honored guest tonight. Thank you for some of the wonderful comments you made in the program. And thank you all for being here at this dinner.
I'm very honored and humbled to be included on the list of past honorees, who are a major part of the who's who in the history of racing and breeding.
The 15 founders of the Thoroughbred Club of America, in 1932 during the Great Depression, recognized that in order for the thoroughbred industry to prosper, it must have a lead organization, a purpose, and a set of goals.
In general, to "endeavor in every proper and lawful way to promote better business conditions in the industry." That says it all.
Times have changed, and conditions have changed. But the objectives and purposes set by these 15 founders are still the same as they were 79 years ago.
None of us have a crystal ball, but we all know that racing will continue to undergo significant changes if it is to prosper.
But I am optimistic! Because, as I look at the people in this room, how can I be anything but optimistic?
The original 15 members of this club represent the foundation of the racing business. The current members represent its future.
We all look at the statistics, which are based on the past. But they aren't always an indication of the future.
After seeing statistics, we have to make sure we use them with common sense and experience to make our decisions.
No longer can we count on huge crowds at our tracks on a daily basis. But our customers haven't disappeared. With electronic gaming we have just introduced them to different ways to place their wagers.
Huge racetracks and grandstands are very expensive to maintain. They were built for large crowds and big events. However, now we are learning how to use them for other events in order to pay for some of the overhead.
In my business career, I have been very fortunate to be exposed to many industries. But in many ways, they are all alike when it comes to planning for the future. But everyone doesn't do it the same way.
I liken it to a football game:
First: We set goals. I call it the goal line. We have to know where we are going, if we don't we will never get there. We have to cross it to score, and if we don't score more than the opponent, we're not going to win the game.
Second: You have to have a plan. I call it a playbook. If you are on the 2 yard line, with :15 to go, and you are 6 points behind, you had better have the right play in that playbook.
Third: Unless you have the right people, you are never going to get across that goal line and accomplish your goal.
As I see it, we are where we are. How we got here is not important. But if we are going to reach our goal and win, we had better call the right play and use the right people. I see a room full of the right people here tonight.
Our industry has challenges. From these challenges, I see opportunities. And those opportunities could be game changers.
May I relate a short story that is an example of what I mean?
The world's largest manufacturer of railroad freight cars decided they didn't like a small, new company trying to get business from their traditional customers. The so called "new kids on the block" invaded the territory of the big company…. and they didn't like it. Their game plan was to put the small company out of business…. and they almost did!
As a result, they endeavored to prevent the new company from getting new capital. And they were big enough to control the credit at the bank.
It was $25,000 that the small company needed to pay its bills. In those days, that was a lot of money. Then, the $25,000 became $50,000.
With no money available, it was a dark day for the president of that small company. He had visited every bank on LaSalle Street in Chicago with the same disappointing results.
Finally, on his way home, he walked by a new bank… a small one with only about 25 employees…and thought he'd give it one more try.
He had the opportunity to meet Harold Miedel, the bank's senior executive at the time. He told his story, but it was too late in the day. Harold had a train to catch, but said he'd be back in the morning.
The next morning, he arrived at 8:30, although the bank opened at 9. The story was retold. Harold put together a plan with the president of the small company.
Then, the two of them went back to the bank where the small company had been doing business for many years. There was only $3,000 left in the company account. Within a half hour, the money was withdrawn and deposited in Harold's bank.
This was a game changer. Not only did the company start a new life, but a strong financial relationship was established with Harold's bank.
Ironically, a few years later, the large company that tried to put the new guys on the block out of business, ran into financial trouble of its own, and was up for sale. By that time, the new company had a degree of success, and had a few dollars in its pocket. It came within inches of buying the company that had tried so hard to ruin them.
Every morning, sometime between 5:30 and 6 -- I do some of my best thinking then -- I review what my corporate plans are, and if they are still valid. The more I thought about buying the large company, I said to myself, "Duchossois, you're making an emotional decision, instead of a business decision." Then, I decided to call the whole thing off.
I had learned another lesson, that a challenge may lead to an opportunity, which can become a game changer. But when you make an emotional decision, instead of a business decision, you're probably wrong.
When General McChrystal and his staff were making the decisions about the surge in Afghanistan, he said: "We may be making absolutely the right decision for now, but in the long run, we may be fools."
That's what I had done. I was making an emotional decision.
It reminds me of the great philosopher from the comics, Charlie Brown. He said: "We have met the enemy, and they are us."
The lesson I learned was that challenges and opportunities and game changers can be easy. If we think things through, but leave out the emotion, we're probably right.
We then grew to become one of the world's largest manufacturers of railroad freight cars. By the way, the bank that was there for us -- LaSalle Bank -- is now part of Bank of America and is one of the world's largest banks. And we still do business with them today.
This is one of the things that taught me to take a challenge, work it into an opportunity, and make it into a game changer. But on a business, not an emotional, basis.
We are facing challenges in this industry. And these challenges will be met. Many people in this room will lead us into the future, because we have learned from the past.
In the 65 years I have spent with the same company that still employs me today, I have learned the economy has a way of turning around. The racing industry will have to have a plan, a game plan, to position itself so once the economy turns takes off, so will we!
New innovations on how we do business are evolving every day. We are finding new streams of revenue to supplement the horse racing industry while we are reinventing ourselves.
This is not to suggest, in any way, that we forget our core business, which is racing. But it will keep the dollars flowing until we meet the goal line.
When I look at racing, I look at it like a river with a bridge over it. On one side are the people growing the hay, wheat, and oats. The jockeys, owners, trainers, breeders. They develop the product: the horse. A good deal of the money that supports this side of the river is earned outside the industry.
On the other side of the river are the customers. And their money is earned outside the industry.
The bridge is the racetrack that brings the two sides together to display the product for the customers to enjoy and get excited about.
Under this bridge there is water flowing, which represents the stockholders. We are all in this together! We all have the same goals: Fun, excitement, challenges, and the opportunity to make a dollar.
The investment in this sport leads to thrills that money just can't buy. There was a commercial for a breeding operation that aired during the Breeders Cup broadcast. It showed a race with people screaming and cheering as the horses came down the stretch. The tag line was: No one ever lost his voice cheering for a mutual fund. That says it all about horse racing!
I would urge everyone to stay positive, and avoid the pessimistic tone we often see in the media. This industry is not about to stick its head in the sand and ignore the problems and challenges. But the last thing we should do is constantly send a message of pessimism to (the) very people that support us. If we aren't our own cheerleaders, we will invite fans to stay away. Negative messages could discourage people from becoming involved in racing and horse ownership.
You may have read Bob Evans -- CEO of Churchill Downs Inc. -- and his presentation at the racing symposium in Tucson. He eloquently went through his 5 reasons why he is optimistic about the future of breeding and racing. I wholeheartedly share his optimism, and know many of you do too.
I don't want to be presumptuous, and leave the impression I know the answers to our challenges and problems. But I know this: People love horse racing! Whenever I talk to anyone who has gone to Churchill Downs or Keeneland or Arlington Park, or any other track, they tell me they had a great time.
There is no way I believe this sport is dying, or on life support. It has so much to offer. We are marketing ourselves better, we are reinventing how we do business. It is important to strive to make the racetrack the "in" place to be once again. We are finding ways to get people back to the track.
Look at what Keeneland has done with a state of the art tote board. The on screen graphics that help you follow your horse all the way around the track. They make it easier for customers to understand and enjoy racing.
And talk about making the track the "in" place to be! Churchill Downs has enjoyed tremendous success with its night racing. They have created a real buzz around Louisville, turning night racing into a big event. Churchill -- and tracks all over the country -- are introducing new customers to the thrill of racing.
In 2010, we saw people flock to the movies where a new generation was introduced to the majesty of Secretariat. 2010 saw the majesty and charisma of Zenyatta on full display. Millions of people who had never shown any interest in horse racing now know Zenyatta and Secretariat. The time is now to build on the positive publicity they are bringing us.
There is nothing like star power in sports. As I drive past the magnificent farms in this beautiful bluegrass country, I can't help wonder what future stars are running around in the pastures here.
We have some brilliant people in this room. We have to put our heads together to get a clear vision of the future. A future that I believe a horse racing industry that will thrive for many generations to come.
Remember the commercial: No one ever lost their voice cheering for a mutual fund. So let's put our voices together to help spread the word to new fans that racing brings thrills that money can't buy.
It's a great sport, with a rich history. And in my opinion, a great future.
Once again, I thank you for this tremendous honor.