Nov. 4 (Bloomberg) -- Under Armour Inc. founder Kevin Plank’s $500,000 budget at the 2007 yearling sale paled next to that of the Dubai ruler who paid $2.9 million for a single colt. Yet a $170,800 filly is bringing him back to North America’s richest two days of horse racing.
Plank, owner of Maryland’s Sagamore Farm, which once belonged to Alfred G. Vanderbilt II, is betting he’ll return to the winner’s circle today when Shared Account defends the turf title won last year at 46-1 at the $26 million Breeders’ Cup Championships at Churchill Downs in Louisville, Kentucky.
Plank, 39, is a member of a new breed of racehorse owners who is injecting capital into a sport that’s projected to decline unless fans can be enticed back. The group includes New York businessman Mike Repole and Food Network chef and restaurateur Bobby Flay.
“Their winning ways in business have carried over quite seamlessly to thoroughbred racing, where they have all enjoyed much success,” Alex Waldrop, chief executive officer of the National Thoroughbred Racing Association, said in an e-mail.
Racing’s fan base is shrinking by 4 percent a year, according to a study by Dan Singer and Michael Lamb of McKinsey & Co. Through 2020, the base will be 64 percent of what it was last year. That will hit income from gambling, making it more difficult for tracks to make a profit, Lamb told the Jockey Club Roundtable.
“This includes handle, which we forecast could decline by as much as 25 percent from this year’s levels,” he said. “The number of viable tracks will decline by 27 percent over that decade; state revenue and tax receipts from racing could fall by as much as a quarter; and the average owner losses will increase by 50 percent.”
Racing should focus on sound business practices and the fans, said Repole, the majority owner of Pirate Booty snacks and Energy Kitchen restaurants, who co-founded Glaceau Vitaminwater sports drink that was sold to Coca-Cola Co. for $4.1 billion in 2007.
“It’s not that people are afraid to put money into the game, they don’t know how to put money in the game,” he said in a telephone interview from his New York office. “The guy who buys the $300,000 yearling is just as important as the guy who puts down a $2 bet. Everyone thinks horse racing is for 65-year-old men.”
Plank, whose 15-year-old sports apparel company reported revenue of almost $1.4 billion in the 12 months through September, bought the 430-acre Sagamore Farm and 100-acre homestead in Glyndon, Maryland, four years ago.
The establishment was started in 1925 by Isaac Emerson, inventor of Bromo-Seltzer, and bequeathed to Vanderbilt when he was 21 years old by his mother, who was Emerson’s daughter. The Vanderbilt fortune was based on generations of shipping and railroad companies.
“We all made our money ourselves,” Plank said of his racing contemporaries. “We know how hard it is to make money. This is a hobby I love; a passion I get to enjoy.”
Shared Account was among the first four yearlings bloodstock agent Bob Feld purchased for Sagamore. The filly cost about a third of the pre-set budget during the fall sales at Keeneland Association Inc. in Kentucky.
Plank said his advisers won’t let him near the auction because his competitive nature would tempt him to bid against Sheikh Mohammed bin Rashid Al-Maktoum of Dubai, who spent more than $13.9 million on 13 yearlings that year.
“Sheiks have a lot more money,” Plank said in a telephone interview. “There are big wallets in this business and we need to be careful.”
Feld, the owner of Bobfeld Bloodstock Inc., said a client’s limited funds change his strategy.
“I was looking for athletes,” Feld said in a telephone interview from his office in Monrovia, California. “When you’re on a budget you can’t always get an athlete and the best pedigree.”
Flay’s More Than Real won the $1 million Juvenile Fillies Turf last year. He’s seeking a second payoff in the race today with Dear Lavinia (30-1), a French filly he acquired. Flay also entered Her Smile (15-1) in the Filly and Mare Sprint and Super Espresso (20-1) in the Ladies Classic.
Repole’s Stopshoppingmaria (8-1) will run against Dear Lavinia. The 2-year-old was named as a “hint” to his wife, he said.
Uncle Mo, who was scratched from May’s Kentucky Derby with a liver disease after being listed as the favorite, is the early pick at 5-2 in tomorrow’s $5 million Breeders’ Cup Classic, the second-richest race in the world after the $10 million Dubai World Cup. He won the Breeders’ Cup Juvenile as a 2-year-old.
Repole, 42, said he has placed “heavy” bets on Uncle Mo and his other entry, Stay Thirsty (12-1), in the Classic.
“From where we were six months ago to where we are today with Uncle Mo, it’s a miracle,” Repole said. “He’s just getting better and better and better. Stay Thirsty is just a grinder, gets warmed up after a mile.”
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