Q&A: Epstien Talks Goals for Horse Racing League

Following the July 9 announcement of the launch of the Horse Racing League, a new team-based Thoroughbred racing league scheduled to debut in February, Danny Epstien, founder of the investment firm Skylark, spoke with BloodHorse news editor Byron King. Epstien, part of the league's leadership with Greg Maffei, the former CEO of Liberty Media, shared details about the league, its prominent team owners, and league race days planned at Gulfstream Park, Santa Anita Park, and Keeneland. The following question-and-answer session is edited for brevity and clarity. BloodHorse: What made a horse racing league so attractive? What made you dial in on this sport? Danny Epstien: So I have always been a horse racing fan. I grew up going to Gulfstream with my grandfather and to (New York harness track) Yonkers Raceway in high school. I then spent five years at Caesars Entertainment, where we owned a number of tracks, but most recently had experience working in Formula One, which is where Greg and I know each other, and there were just so many similar dynamics where a sport in F1 that was kind of stuck in the path with a big international audience. Bringing great content and storytelling got people really excited. And I think you look at the numbers in horse racing—it's incredible what has happened with the Kentucky Derby (G1) and how much growth there's been, and you look at how much fun there is going to the track. And then the last thing I'll say is, when you look at what's happening in sports right now, people are watching the last five minutes of a game or the last inning because attention spans are short. There's no other sport in the world where in two minutes you see an outcome, and so it has all of the things that I think make it so great for the fans that are already in the sport, and so we got excited by the opportunity to bring new people into it. BH: When you look at what could be done visually with horse racing, what avenues do you see to put the viewer in the driver's seat if we stick with this F1 scenario? DE: So I think there are a couple of things prior to race day. I think giving people access to understand what goes into getting ready for the race day, how an owner of a team is going to select which one of their horses on the roster is going to compete—like letting people under the hood in motorsport but into the barn I think is really compelling. And when you look at social content like the drone footage that we're seeing now showing up at some of these bigger races, and especially if you see it in vertical video, it's incredible, right?... I think from a team standpoint, too, we really want this to be authentic, which is why we partnered with the industry leaders in the game. … We want great stables and great brands that people can get behind and root for. BH: This is a who's who list of participants—whether it's horse owner Vinnie Viola, or Godolphin or WinStar—What was your pitch to them when you said, "Hey, here's what I want to do. I want you all on board. Here's how it's going to work for you." DE: We approached this in a unique way in terms of when we started working on this over a year and a half ago. Greg and I started with industry stewards that we were excited about being a part of this, and we approached it with what we think the opportunity is from F1. How do we all work together to figure out the best format to actually make it happen?... So that's how we really approached it, which was getting them on board as real partners rather than just buying a team. BH: What are the goals, both for you and for the team owners? What defines success in this league? DE: What's really exciting for me, being an enthusiast in the sport, is we're launching for three days next year, and then we'll go to (each venue), and in each one of those days, there are only four HRL races. There'll still be a six-race undercard that will be for the local horsemen. We will hopefully expand to six days over the coming years, and so that's like a very small number of races when you think about 24 races out of (about 30,000) in (North America) in a year. Our goal is (to have) people come in who aren't in the sport right now. They find it, they love it, and they'll stay, right? And I think that is the big opportunity here, where if we do a good job, it should be great for the industry and for all of the participants. So that's how I measure success in the league because if we win, horse racing wins, and it's very cyclical. On the team side, I think the partners we have share a similar sentiment. I think, on one hand, they're all uber competitive and they're really excited to fight it out in a new format that's different. But they also were all founding team owners because they believed that this is good for the sport. BH: When you envision going behind the scenes, visiting the barns, being alongside the participants—talk to me about authenticity and how you hope to maintain that. Did you watch "Race for the Crown" on Netflix? There were a little bit of the behind-the-scenes things in that show that felt a little bit manufactured. How do you keep authenticity and, at the same time, make good programming? DE: I think that show is a good first dip of the toe in the water, but I think there are so many other interesting things. For instance, you look at the Keeneland (September Yearling) Sale; it broke all the records last year, right? It's like most people have no idea what's going on outside of the industry, and it's one of the most fascinating things of all time, right? The amount of money that's moving, the people that are in there, and so we really want this to be full circle in terms of the process of the league: acquiring horses, how the teams train the horses, how the teams make decisions. All of the teams have social media requirements so that they are part of the storytelling. Because I think what people want is transparency and authenticity, and it cannot be manufactured. That's why all of the people that we're talking to—even when we're talking to various celebrities that we'll announce later that want to be involved—they all have some ties into either horse racing or equestrian, something within the equine community. Because people are really smart, and they can tell when things aren't real. And we want to give people something that is real here, and that they can get excited by, and giving them access is the key to doing so. BH: I'm curious to get your thoughts about horse racing leagues that have been tried before. There is one called the National Thoroughbred League, where famous sports celebrities appear at a number of tracks. How do you see your league as being different? What takeaways do you have from that one, and how do you expect to differentiate yourself? DE: I think there are a couple of things. One is with our league, the teams actually own all the horses, and I think that's step one. When we think about the authenticity in creating a real league and it being differentiated, these teams—it's their stable. They're not picking a city. They're actually buying all of the horses that are on their team and will compete. … It needs to be a real league. I think with the NTL, it's a really interesting concept what they did. I know that they've done some fun, interesting events on the lifestyle side; but their system of how the teams operate is very different than what we're doing here. And when we say we're drafting a horse, we're not borrowing them for the day. (Our teams) are buying the horses, right? So the teams have an eight-horse roster. Only four of them are running on any given race day, so there's never any pressure to run a horse, and it's really about the league. Our goal here on the horse racing side is to be an actual league structure with real teams that operate, like a front office and a back office. On the event side, we're focusing on premier tracks. We have some really exciting news about food and beverage and hospitality that we're thinking about, as well as some partners there, and how we do a race-day experience, and we're fortunate enough that we have great partners in 1/ST (Racing) and in Keeneland that we're able to be at the most iconic track because they believed in the vision for what we want to do. BH: Lastly, it seems like private equity is getting more involved in professional sports. Why do you think private equity sees horse racing as this exciting investment and, for that matter, other types of professional sports? DE: So I think that sport is one of the last things that (artificial intelligence) will have a problem disrupting in terms of the live sporting experience because you have to watch live to see the outcome. Otherwise, it's going to get ruined, right? You'll see a post or you'll get a news alert on your phone. … We see it with the World Cup right now. The numbers are wild and people are tuned into their stream because you need to see that goal live, right? And so I think that's why you see so much investment pouring into sport right now because it's not something that can be replicated and will be very hard to disrupt. And that's why we think there continues to be such (promise). Horse racing is such a magnificent sport, and so if we can do a good job of helping bring new fans into it, the opportunities for this system and horse racing in general, we hope it's just a huge win.