Back in February, we posted a blog titled “A Tough Game to Conquer" about owner Ernie Semersky of Conquest Stables. The blog quoted an article in the Blood-Horse magazine that stated among other things that Conquest had paid over 13 million dollars for horses in 2013-2014 (they’ve paid a lot more since) and explained Semersky “owns several residences, has a private plane, and is into art collecting… when attending the races, he often dresses ostentatiously. Last year at Woodbine, he wore two-toned sunglasses matching Conquest’s orange and blue silks. Semersky said that until six years ago, he also was a financial trader. He has made a lot of money and spent a lot of money. There’s a September 1989 Chicago Tribune article about his $700,000 purchase of a Porsche 959, described as the fastest street car in the world at the time”.

We highlighted the results of a day at Gulfstream Park (January 30, 2016), in which Conquest had runners in a total of seven races including two major stakes and came home with a 2^nd place finish with the even money favorite in an allowance race and six off the board finishes as an example of just how tough and humbling this game can be. According to statistics from the Daily Racing Form, Semersky paid a total of $1,970,000 for these seven horses, who collectively had earned $956,000 as of that date, including a grand total of $28,500 on January 30th at Gulfstream. Take out the 10% trainer and jockey’s share of the purses and it’s unlikely the owner’s share of the purse earnings have fully covered these horse’s training costs, let alone paying back any of the nearly $2,000,000 he spent to purchase them.

Now from the Blood-Horse of August 18^th, comes a story with the headline “Conquest Stables Plans Full Dispersal”, you can read the story in full here. The article says that “Co-owner Ernie Semersky cited personal reasons for leaving racing and breeding” and quotes him as saying "When we launched Conquest Stables just four years ago. Our goal was to build an operation that could compete in the biggest races in North America," Semersky said. "We were on our way to achieving that goal, with seven Breeders' Cup starters, two Sovereign Award winners, and the winners of races like the grade I Darley Alcibiades”.  What he doesn’t say is that he paid tens of millions of dollars to purchase horses that collectively won (and are worth) a fraction of that amount. If you look at all the horses purchased at public auction and the overall results, it appears he came up with very few really good horses for the money he spent, and the stable was likely drowning in red ink. Even brash multi-millionaires have their limits on just how much money they are willing to lose. Call it speculation, but the bottom line might have something to do with his decision to leave the business.

As mentioned in the earlier blog, Semersky is hardly the only owner to enter the game with big expectations and a bigger ego and find out just how competitive and unpredictable horse racing can be. Just as in human athletics where only a tiny number of players can perform at a professional level, only about 3% of all horses ever win a stake race of any kind, and less than 1% end up to be grade I stakes winners. 40% of all thoroughbreds born each year never win a single race and over 80% of those who do win end up as claiming horses. Spending the most money does not assure you of coming up with the best horses. Many a billionaire has spent tens of millions of dollars seeking a triple crown or breeder’s cup horse and had little to show for it except a sea of red ink. Statistics show that more champions are sold for $20,000 - $150,000 than for $1,000,000+, but that doesn’t stop people with huge egos and bank accounts to match from overpaying for well-bred prospects at public auction. Twenty-four of Conquest’s 2014 sales buys cost six figures, most were $250,000 or more. “If we find something we want, it’s going to be hard to outbid us,” Semersky said in the DRF article. 

A few very savvy, business-minded owners do make money in the thoroughbred business, by going to the sales with a strict budget, hiring skilled, hands-on people to manage their horses, and running them in the races where they belong, not where their egos would like them to compete. Paying $500,000 - $1,000,000++ for a beautifully bred yearling frequently buys a beautifully bred claiming horse. Bottom line, it’s not a game for little boys (or girls) in short pants. The lesson is that you are far better off getting into this wonderful but difficult and challenging business with a good long term plan, a large dose of patience and humility, and avoid idle boasting and arrogance. This game has a way of bringing everyone down to earth.