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June 2013

4 Questions to Ask (Yourself) About  Horse Racing Partnerships

In previous Mojo Newsletters, we’ve covered ownership tips, having a passion for the sport, the hidden gems of being involved, and the benefits of racing partnerships.  Now, let’s say, you’re ready for the next step—you want advice about joining a racing group.  There are four fundamental questions that I recommend any person ask themselves when considering a horse racing partnership.  And, ironically, the first four letters of each of those four things spells the main consideration on everyone’s mind:  COST  So, let’s get started....  

Cost: How much will you have to pay to participate?

The first thing people want to know is how much they will have to spend to get in the game.  In addition to that, I recommend knowing how frequently you’ll have to make contributions.  I also suggest you understand the percentage of ownership you’ll receive for the cost to participate.
The participation costs vary based on the objectives of the organization running the racing group.  Some may be as low as a $500 for one-time payment in a 4% share, while others could be $50,000 to $100,000 (plus monthly charges) for a 25% stake.
You need to make sure you understand what the outlay is before you get involved, and how often you’ll have to make payments (if that's part of the deal).  And, if you can’t afford it, then don’t do it. 
The bottomline on this is:  You can’t have fun if you can’t pay the bill

Objectives: What are the goals of the organization?

You need to understand the goals of the racing group.
These days, there are lots of horse racing partnerships all over the world, and each one has a different objective.  Some only race at the highest levels of the sport; some are content racing at the bottom level claiming; and many do just fine operating in between.  There’s nothing wrong with any of these activities because there’s plenty of room for everyone. 
The sport needs/depends on participation at all levels because, simply put, not all of the bloodstock that’s racing is competitive at the highest levels.  In fact, the majority of horses in training will only be competitive at the claiming levels.
The things you have to consider are:  What’s your preference?  And, does the racing group you’re considering race at the level you wish to participate?

Service: What does the organization offer in return for your patronage?

A gentleman once told me he participated in a group (once) that treated him like a mushroom—meaning, the organization kept the participants in the dark.  And, when the group leader decided to communicate, he fed the participants a lot of crap.
Some groups take pride in keeping their participants informed.  Some groups suggest lavish amenities are included with their packages.  Some groups offer a little bit of everything.  And, some groups just don’t have their act together (at all) when it comes to providing basic customer services.   
It’s important for you to decide what are your expectations of service; do your homework; ask a lot of questions; evaluate the responses; and, then, determine which group is right for you.

Terms and Conditions: Does the organization put the offer in writing for you to review in advance?

If you remember anything, remember this:  If it ain’t in writing, then don’t get involved.
There are a lot of deals made based on a verbal agreement.  And, that’s fine when everything runs smoothly.  Problems occur when things don’t go according to plan and/or large sums of money are involved.
Having terms and conditions for an agreement protects you, and it also protects the organization.  Written agreements, though cumbersome to deal with at times, are the ground rules by which the organization is managed.  They outline what you owe and how often you will be required to pay.  And, they define what you may get in return for your investment.  Written agreements also serve as the basis for the way disputes (internally or externally) are settled.
The terms and conditions come in different formats: They can be written like a single bullet-point list of do’s and don’ts, or they may be included in a lengthy multi-page document with a formal signature page that has to be signed and returned in order for participation to take place.
There aren’t any laws or regulations (in the United States) that say a written agreement is required in order for racing partnership services to be offered or for people to participate.  Having a written agreement is just a very good idea for any participant so they have the key points of the offer spelled out, in advance, in order to understand what they are entering into with the organization.  Otherwise, it’s one person’s word against another without any proof of what they agreed to in the first place.

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Mojo Thoroughbred Holdings, LLC (which conducts its racing operations as Mojo Racing Partners) is based in Fort Worth, TX and was formed in 2006.  Since then, Mojo has raced at Arlington Park, Churchill Downs, Indiana Downs, Keeneland, Kentucky Downs, Lone Star Park, Remington Park, and Turfway Park.

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