The Book of the Week is “Wild Ride” by Ann Hagedorn Auerbach, published in 1994. This is a long story largely similar to many others in which one person acquires and abuses too much power in an organization that eventually comes to a bad end.
The horse racing industry is largely a playground for the wealthy, as it costs big bucks to purchase, stable and train horses for racing. There is only a tiny probability of profiting, considering all the different risks, and the factors required to produce a winning horse.
Major racing sites are located in Louisville and Lexington, Kentucky; New York City, Saratoga Springs in New York State, and Hialeah in Florida.
Calumet Farm was the site of the training and spawning of racehorses. It was owned by the Wright family, whose patriarch’s goal in the 1980’s was to turn it “… into a bustling assembly-line style breeding operation, hellbent on producing winner after winner.”
In the early 1980’s, J.T. Lundy wed a Calumet heiress with the aim of inheriting the large horse farm. He inherited it at 41 years old. He immediately engaged in excessive spending on farm renovations, the purchase of a corporate jet and additional horses, and paying more workers. In the industry in general, new systems were created by financiers to cash in on the horse-racing boom.
Lundy spent other people’s money (namely the Wright family’s) to fund his wheeling and dealing, while also commingling personal and business funds. The family (who knew nothing about horse racing) trusted him and his colleagues (who had numerous conflicts) to run the business and do what was in the family’s best interest.
The chief financial officer of Calumet attempted to duly inform Lundy of the farm’s mounting debt service, the unpaid insurance premiums and dwindling resources, etc. at the end of the 1980’s.
By November 1990, Calumet had approximately two hundred thoroughbreds and one hundred employees. Its fifteen-year-old stud Alydar, accounted for a large part of its revenue.
Sadly, the industry would reach its saturation point within a decade of Calumet’s soaring reputation as the premier place to breed winning horses. Read the book to learn the details of how the farm had gone from owing not a cent with the death of an heir prior to Lundy’s takeover, to the largest instance of debt explosion in the history of bluegrass.