How tax law and commercialism ended racing

The recent retirement of Goal-oriented– a colt who finally realized his potential with a stunning victory in Grade 1 Malibu – serves as a stark reminder of the mantra of the modern era. Despite owner Tom Ryan’s initial hopes for a four-year campaign, the call from Wasteful farm was too loud to ignore. In the current climate, the question lingers: did something go wrong, or was he simply more valuable as a “prospect father” than as a stable star?

This transition from a “from breed to breed” sports to one “breed to breed” things were not accidental. It was the result of a seismic shift in economics, chemistry and law.

The Tax Reform Act of 1986: The Day the “Sport of Kings” Died

In the 1970s and 1980s, powerhouses loved it Rokeby, Ogden Phipps, Buckland Farm and Greentree were not looking for a return on their investment; they were looking for a trophy. Racing was a “game of egos,” funded with old money and supported by favorable tax laws that allowed wealthy owners to offset other income with racing losses.

The Tax Reform Act of 1986 everything changed. By tightening the “passive loss” rules, the IRS effectively forced racing to become a self-sustaining business.

• The result: The “Old Money” stables began to evaporate.
• The shift: Between 1985 and 1990, the average price at the Keeneland July Selected Yearling Sale plummeted as tax shelter buyers left the market.

The disappearing workhorse: in numbers

On the “Glory Days” there were iron horses such as Kelsowhich was indeed a record Horse of the Year five consecutive years (1960–1964), making 63 career starts. Today, such longevity is a myth.

The decline in the number of starts is inextricably linked to the rise of Lasix (Furosemide). Once reserved for “second-stringers” and chronic bleeding, it became a mainstay for the entire industry. Because Lasix causes significant dehydration, horses now require 30 to 60 days between races to recover, while the legends of the 1970s often ran every two weeks.

Rivalry versus marketing

We often turn to the word “rivalry” to sell tickets. We called Journalism and sovereignty a rivalry, but journalism never defeated its enemy in two tries. Two. Compare that with the real gladiator fights of the past:

• Confirmed vs. Alydar: Meet 10 times. Confirmed won 7, Alydar won 3.
• Sunday Silence vs. Easy Goer: Meet 4 times in one year (1989), producing some of the best finishes in history.

Today, a horse like Flight line is being hailed as the “greatest ever” after just six career starts. While his talent was stellar, the title of “best ever” always required solidity and a willingness to show up season after season.

The allure of the breeding shed

The economy is now lopsided. A colt can immediately appreciate a grade 1 win like the Malibu $10 million to $20 million in any stud fees.

• The Orb Factor: Kentucky Derby winner Orb is a good example. After his victory in 2013, he never found the winner’s circle again. Owners face a stark choice: continue racing and risk an injury that will void a multi-million dollar breeding contract, or retire healthy and ‘cash out’.
• Partnerships: The rise of multi-owner syndicates means that decisions are made by committees and are focused on the end result, rather than the special pride of an ‘own’ stable.

Conclusion

The sport has exchanged the ‘Sport of Kings’ for the ‘Business of Breeding’. While the auctions at Keeneland and Saratoga still bustle with activity, the soul of the game – the iron horse that returns year after year to defend its turf – is becoming a relic of a bygone era. Transparency about pensions like Goal Oriented remains a pipe dream, because in such a large company the ‘why’ is almost always written in green.