Dick Jerardi – Racing Economics with Butch Reid
Butch Reid has been training horses since 1985. Like so many of his brethren, he led the life of a gypsy, going from track to track depending on the season and the horses in his barn. He has won 729 races with purse earning for his owners of $22.2 million, nice numbers but, once you start factoring in all the expenses, nothing that is going to make anybody rich.
When he heard a casino was coming to Parx, not all that far from where he grew up in South Jersey, he said “I decided I might beat the gate and get here as soon as I could.”
So he arrived with the slot machines. He had some good years and lean years before that, but his best years have been between 2008 and 2018. His stable typically wins between 30 and 55 races each year with purse earnings for his owners between $1.1 million and $2.2 million.
“I don’t think anybody could have imagined it turned out to be as big as it did,” Reid said.
His four main owners, prominent businessmen in the Philadelphia area, have invested millions in the horse business. His wife Ginny is right by his side at the barn every day, a partner in every way. Together, they won the 2011 Breeders’ Cup Marathon with Afleet Again the year before their Poseidon’s Warrior won a Grade I stake at Saratoga. The out of town success is nice, but almost all of their business is at Parx with Pennsylvania people.
Reid keeps 20 to 30 horses depending on the time of year and has 14 full-time employees. His 2017 payroll was $430,000.
“They have apartments and houses in the area, pay their taxes, pay their unemployment,” he said. “I paid over $100,000 in workers’ compensation to the Commonwealth of Pennsylvania in 2017 so we are definitely contributing to the local economy and the statewide economy.”
Multiply Reid’s stable by hundreds statewide and the economic impact becomes even more obvious.
Why, Reid was asked, is that not well known?
“I think it’s a marketing problem,” Reid said. “It’s great that we have a casino, but we’ve been dominated by the casino. Several people don’t even know there’s live racing that goes on here.”
Reid knows it because he lives it. As do his owners who spent several hundred thousand dollars last year at a Maryland horse sale strictly on Pennsylvania breds.
“There’s so many phases to a horse’s life,” Reid said. “Most of them start out in a nursery and most of them are in the state of Pennsylvania. Horses are being bred and foaled there. Then, they go to another facility for breaking and training with more farm land being used and a bunch of employees there too. One thing about this industry is that it’s very labor intensive. All along the way, there are at least two people for each race horse.”
Contrary to popular opinion, Pennsylvania horse owners are not making a killing in the business. In fact, the vast majority lose money because it is so expensive to keep a horse in training.
“It’s sport,” Reid said. “They like the action. It’s for the excitement and the adventure of it.”
One race horse, Reid said, costs about $3,000 per month to train. There are training bills, vet bills, feed bills, transportation bills, bills and more bills.
“There are at least 10 people that see each horse every day,” Reid said.
The increased purses at Parx actually give owners a chance, but it is no get rich quick scheme.
“It is imperative the horses are competitive, getting at least a part of the purse just to keep the business afloat,” Reid said.
Extrapolate that $3,000 per month over a year, factor in that 10 percent of each owner’s purse is deducted for trainer and jockey shares and Reid estimates $50,000 per year is the break-even point for each horse.
“It is not for the faint of heart,” Reid said. “It is a risky business.”
But it also a great business, Reid said, especially since they have come to Parx full time.
“We’ve set up here,” Reid said. “It’s been great. Year-round racing really helps. A lot of times, you are going to have pick up and move every three months.”
The Reids’ daughter Whitney went to eight schools by the time she was in eighth grade. A recent Drexel medical school graduate, Whitney will begin her residency at Children’s Hospital of Philadelphia, not far from where he parents live in Bucks County, a home that horse racing at Parx made possible.
-By Dick Jerardi