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Monday, February 2, 2015

How Lou Guida Revolutionized The Art Of The Deal In Harness Racing

Lou Guida, who passed Friday at age 82, enjoyed tremendous success buying and syndicating horses for the purpose of racing, but it galled him right to the end that so many of those champion pacers and trotters failed to produce as stallions.

He’s best known for his association with Niatross. He bought a half interest in the precocious son of Albatross after he’d made six starts as a freshman. Guida paid $4.2 million, clinching the deal with a series of reachable and lucrative performance bonuses for trainer/driver Clint Galbraith, who owned the colt with Elsie Berger. The syndication price was later upped to $10 million, but in the meantime the crafty money manager sold 37.5 % of his shares to investors, retaining 12.5% and the all-important role as syndicate manager. He expected that sale to net him a $1.5 million profit over the course of a decade.

While the eight lawsuits lodged against the syndicate by Clint Galbraith, who wanted to race the horse at four then stand him at Rodney farms, snaked their way through the judicial system, Niatross stood at Castleton in Kentucky—a neutral site—for $35,000. Three hundred broodmares auditioned for 150 slots in his book. His first two crops contained Nihilator, Pershing Square, Smartest Remark, Carressable and Flight Of Fire. Unfortunately it was all downhill from there.

After Nihilator’s dominant win in the Meadowlands Pace, Lou said that Nihilator along with entry mates Chairmanoftheboard, Pershing Square and Primus would generate $120 million in income over the following twenty years. Not quite. Nihilator was retired to a failed stud career in November; Historic, Native Born and Shore Patrol were his three millionaires. That says it all. And the others were even less successful at that endeavor than he was.

Guida also owned 25% of Dragon’s Lair, from that same crop; he had been syndicated for $12.4 million after a terrific freshman campaign. He won five times at three, but nothing of note. The following year Dragon’s Lair was credited with seven foals from 79 mares. They brought him back to the track for a couple of years, where he won 14 races and banked $400,000, and he subsequently went on to be a mediocre stallion. That wasn’t what Guida had in mind.

Several years earlier, prior to Niatross reshaping the sport, Lou syndicated Sonsam for $6.3 million, which was upped to $8 million when shares were sold. He had won 14 of 17 starts at two and brought folks out of their seats with his Meadowlands Pace heroics, but he was injury prone and couldn’t handle a half. Rival Hot Hitter, who Guida syndicated 60% of for $6 million, won the division. Both stood at partner Morty Finder’s Pine Hollow Stud, with the speedy Sonsam serving as a much anticipated addition to the stallion ranks. Hot Hitter, who won the Jug and the Messenger, never produced a good horse, while Sonsam had some early success with the likes of Hit Parade and Marauder, but soon tailed off into mediocrity, with Till We Meet Again, from his seventh crop, serving as an exception.

The fee for Niatross had jumped to $40,000 when he was moved to Pine Hollow after his spate of early success. As things went downhill, so did his fee. By 1994 he was standing for $5,000 in New Jersey. But remember, Lou had parceled off most of his share early in the process. He was disappointed, but didn’t get caught with an empty bag in his hand.

Something similar happened after Nihilator was syndicated for $19.2 million; Guida retained 29%, but he was forced to unload all of that for tax reasons. He also lost his breeding rights. The result was that he was given a lucrative contract as syndicate manager, leaving him with very limited liability as the horse failed the investors long term, after earning a bundle in stud fees for the first couple of years.

He syndicated Forrest Skipper, who made his mark in the aged ranks, for $5 million. The son of Scarlett Skipper pursued a failed career as a stallion in New Jersey.

He divided BG’s Bunny up into 40 shares, and while he wasn’t a great stallion, it proved to be a very rewarding financial transaction, and set the stage for numerous other deals.

Mack Lobell was a $17,000 purchase; the company Guida formed bought 21 yearlings for close to $2 million and Mack was one of them. This was the same strategy that netted him Nihilator, as he bought every Niatross yearling for sale from the first crop and wound up with several of them. Mack earned almost $4 million—a handsome ROI—but his semen was almost devoid of sperm, a serious drawback for a sire. He had the Victory Song blues.

Lou bought a piece of world champion Pine Chip, who didn’t race at two, from Chuck Sylvester. The son of Arndon earned about $1.7 million. There were fertility issues at the beginning, but he turned out to be fertile enough to cover 200 mares at Castleton. He started out at $10,000 and was up to $20,000 in 2000. He was shipped to Sweden at about that time, where he was very successful. Pine Chip was one of Guida’s breeding triumphs.

Bullville Victory, a $400,000 purchase at three, when he won the Kentucky Futurity, Yonkers Trot and World Trotting Derby, exemplifies Guida’s dilemma. He was from the Valley Victory line and, not surprisingly, had almost no sperm in his semen, yet this line was faster and smarter than the rest. Valley Victory’s first two crops consisted of 84 and 69 foals, and it went downhill from there. Crops three through six had between 42 and 58 foals, and that issue was passed along. [Muscles Yankee, Lindy Lane and Donerail serve as exceptions to the rule.] The same situation existed on the pacing side where sons of Albatross were a risky proposition as stallion prospects—see Niatross. Guida was able to benefit from racing horses successfully while folding caveats into the deals that protected him when they entered the breeding realm.

He paid $250,000 for Westgate Crown (Royal Prestige) the day that one became the fastest freshman trotter ever with a 1:55.1 time trial. He won his division that year but couldn’t buy a win at three. Westgate Crown went on to have some success in the aged ranks and a very modest career as a stallion. He’s in the Canadian Hall Of Fame, but again, that’s not what Guida had in mind.

Lou’s biggest bust was Rodney’s Best, a $1.5 million purchase he said was a shoo-in to win the Hambletonian and would go on to be the greatest sire ever. Not quite.

At one time Guida, who was always looking to spread the risk, believed broodmare syndication would be the next big thing. He saw value in an individual investing in a number of mares as opposed to one expensive stallion. In 1980, when he owned parts of 22 horses, he also owned 85 broodmares. In the mid-1980s he loaded up on shares in thoroughbred stallions—Spend A Buck and Tasso , to name two—and built a band of broodmares to redeem those shares. He repositioned his Standardbred holdings to Italy many years ago, where he was also very successful. Lou was a busy guy.

There are people and events that have altered harness racing in a memorable way: the introduction of night racing to an urban audience at Roosevelt Raceway by George Morton Levy in September, 1940; the opening of the Meadowlands in September, 1976; and the introduction of Joe King’s modified sulky at Yonkers Raceway in December, 1977 represent three of them. I’d have to put Lou Guida in that same category, based on the way he changed the collective mindset with regard to owning horses.

Joe FitzGerald

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