March 2017 | High-Tech Entrepreneur Making His Mark in Racing Game
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High-Tech Entrepreneur Making His Mark in Racing Game

Terry Conway - March 2017

Grand PrixGrand Prix as a yearling

A few years back Henry "Hank" Nothhaft wrote the popular business book "Great Again" about how America can revitalize its innovation leadership and kick-start the economy again.

It captured the wisdom of his 35 years in California's Silicon Valley where the serial entrepreneur fashioned a career of taking high-tech start-up companies and transforming them into highly touted, businesses. Nothhaft showed how small technological companies with manufacturing and engineering skills can survive, and even hit the winner's circle if they take the right risks.

Born and raised in Sharon, Pa. in the western part of the state, several years ago, Nothhaft (pronounced note-off) saw retirement staring him in the eye. Not a sit around kind of guy, Nothhaft began researching opportunities that would continue his lifelong entrepreneurial quest.

"I landed on the thoroughbred industry-- big rewards if you take the right risks, " he explained in a telephone interview from his home in Saratoga, Calif.

"I took my usual analytical approach. I love the competitive, data driven field of racing and breeding. You acquire instant feedback and have a limited number of employees. I jumped in. I treated it as a start-up, a boot-strap operation that could be self-sustaining, generate cash flow and reinvesting the capital."

Nothhaft attended a number of California Thoroughbred Owners seminars, mapped out a business plan, dove into tax implications and spent countless hours studying pedigrees and analyzing the best sires to mate with his mares.

"I bought books, videos, started reading Blood-Horse on how to evaluate prospective sires and mares. It was a lot of self-educating," said Nothhaft, a graduate of the U. S. Naval Academy, and a former Marine officer who served in Vietnam.

"It hasn't been a curve left to right to profitability, more a jagged edge. But all things considered it's worked out very well."

Nothhaft's first taste of racing came at a Standardbred track near Columbus, Ohio as a teenager. He purchased his first thoroughbreds in California in 2006, operating under HnR Nothhaft Horse Racing. His business model was mostly breeding to race but when the economic meltdown hit in 2008, two years later he sold his horses and eventually relocated the business in Pennsylvania teaming up with Northview Stallion at Peach Bottom, Pa. Gradually he started adding some mares he could sell after their racing careers or keep to be bred.

Purchasing Euro Fillies

Nothhaft knew he couldn't afford the top-tier yearlings at sales in the U. S., but understood he could obtain better value with racing fillies in Europe. Working with Darby Dan Farm sales and bloodstock director Carl McEntee, Nothhaft travelled to England where in 2013 he purchased Macaabra, who came to Santa Anita and scored in an allowance race in early 2014.

Pleased by the result, McEntee was sent back the following year and zeroed in on a pair of sharp fillies, but the more highly touted filly failed to pass the vet's exam. The plan was when that filly passed the exam, Nothhaft would ship both over to Santa Anita.

In the meantime, McEntee's brother Phil was training a small string on an English farm. The second filly was the quirky Irish-bred Living the Life, daughter of Footstepsinthesand. She became his pet project.

"Phil had time to work with Living the Life and eventually he figured her out mentally," Nothhaft noted. "So we entered her in a handicap at Lingfield Park's synthetic racecourse that she won and then turned in a nice performance there in a much tougher race finishing third."

The owner and trainer entered the filly in the $247,000 All-Weather Fillies and Mares Championship Final staged on Good Friday in April 2014. With Adam Kirby in the irons, the 8-1 favorite Living the Life dominated from the get-go, cruising to a 3 1/2 length score. Nothhaft calls it his biggest thrill in racing.

"I love the racing atmosphere in England," he explained. "To me that victory is what racing is all about. I've also been a big fan of Dick Francis' horseracing mysteries and I felt like I was living one of his books that day. I met everyone and anyone in British racing. The day before we travelled to Newmarket to take in all its splendor. What an amazing adventure."

Afterwards Living the Life was shipped to Santa Anita trainer Gary Mandella (son of Hall of Fame trainer Richard) who began mapping out a racing schedule. Under Mandella's tutelage, she won the Presque Isle Downs Masters Stakes (Grade-2) twice but just missed a third score, when Living the Life ran second despite a compromising trip last September. A synthetic-track star, Living the Life whipped the boys last May in the All American Stakes (Grade-3) at Golden Gate Fields and finished runner-up in the Santa Margarita Stakes (Grade-1) on the dirt.

Pointed at the $1 Million Breeders' Cup Filly & Mare Sprint, the 6-year-old Irish-bred mare developed an ankle injury the week leading into the race. She was scratched and retired. Living the Life concluded her racing career with a 10-6-4 record from 35 starts and $1,028,394 in earnings. She joined Nothhaft's broodmare band of seven at Darby Dan Farm in Kentucky.

Homebred BC Champion

Still, Nothhaft had another strong rooting interest in the BC Filly & Mare Sprint, his homebred Finest City.  He purchased her dam Be Envied (by Lemon Drop Kid) for $37,000 at the Keeneland Sales while in foal to City Zip. Finest City was foaled at Northview-Pa.

Named for the city of San Diego, Finest City fought off a late challenge by Wavell Avenue (the 2015 winner), to win the 2016 Breeders’ Cup race by three-quarters of a length. She joined an elite group of three other Pennsylvania-breds (Alphabet Soup, Go for Wand, and Tikkanen) who have won a Breeders’ Cup race.

A pair of father-and-son tandems contributed to Finest City’s success. Wayne and Tyler Seltzer race her in the name of their Seltzer Thoroughbreds, while Eric and Ian Kruljac have collaborated on the 4-year old mare's training. Finest City was the first horse that 28-year-old Ian trained under his own name.

When Living the Life came up lame Nothhaft gave his Breeders' Cup tickets to Gary Mandella, a decision he still regrets.

"We have a racing room in our house and my family and I were glued to the big screen TV watching Finest City's race" he recalled. "When she won we were excited beyond belief, literally jumping for joy. Within moments my cell exploded with texts and calls. I've never experienced anything like that."

Finest City kicked off her 2017 campaign with an impressive victory in the $200,000 Santa Monica Stakes pulling away in the stretch to win by 3 3/4 lengths on January 21 at Santa Anita. That evening she took home the 2016 Eclipse Award as top female sprinter.

“She was a knockout from day one, athletic, well-balanced and somewhat precocious,” Nothhaft remembered. "One of the reasons Carl and I decided to sell her was we thought we were going to be able to get $150,000 for her to build up my breeding business. She was the first horse I bred who sold commercially at auction.

"We had some top-flight horsemen looking at her at Keeneland. But, the bidding just never took off. You could feel the air go out of the room. Later I found out that on x-rays at the auction it looked like there's a cyst or OCD of some kind, shadows that showed up. It held the price down. She went for the reserve, $50,000. I never would have entered her in the sale, but kept her to race, as I did with (his homebred stakes winner) Mister Nofty for the same reason.”

Building Breeding Program

Nothhaft credits the PHBA awards program for the purchase of Silver Train that enabled the owner to move him to Northview-Pa. where he built a broodmare band to support the stallion. Finest City was one of the first colts produced.

Then tragedy struck. In late December 2013, Nothhaft received a phone call that Silver Train had died from a swift attack of colic while traveling to quarantine in Brazil awaiting his return to the U.S. Even though he was accompanied by a veterinarian when he became ill, the 11-year old horse by Old Trieste died before reaching an equine hospital. Silver Train had just completed his second season of Southern Hemisphere stud duty.

The winner of four graded races including the Breeders' Cup Sprint (Grade-1) and Metropolitan Mile (Grade-1), Silver Train moved to Northview-Pa. in September 2011, after being purchased by Nothhaft. Ranked among the nation's leading young sires since his runners first appeared in 2010, He sired 14 stakes winners, six of them graded/group winners and two champions. From 2011-2013, his progeny earnings exceeded $3 million. His runners averaged an impressive 17 starts for their careers.

“Silver Train was all class, the consummate professional, " said Nothhaft, the majority shareholder. “Given his proclivity for producing winners, we expected big things from Silver Train for years to come. With our expansive plans for him in 2014, his sudden passing was a real shock.”

Nothhaft's strategy has been to move up the value chain with both mares and sires in order to address the high end of the market which has been good to strong for some time.

"The middle of the market commercially is hit or miss, and the low end commercial market is not viable from an economic point of view," he noted. "As a result, I have retained my middle market bloodstock and am racing them, primarily in PA. Of my top of the market horses, I am selectively selling and retaining the rest for racing."

Nothhaft's primary stable is with Gary Mandella at Santa Anita and he keeps a string of runners at Parx with trainer Keith Nations, who had trained for the owner in northern California. Through 2016 HnR Nothhaft Horse Racing has career earnings of $2,058,285 with 34 wins, 33 seconds and 36 thirds.

One of his top runners is 3-year old Grand Prix who scored her first stakes victory in 2016. She is a Pa.-bred, a filly by Tale of the Cat, trained by Mandella.

"We're hoping she continues to develop so we can ship her to the Masters at Presque Isle where I had some much success with Living the Life," Nothhaft observed. “Her value has been significantly enhanced by Finest City's Breeders' Cup win."

Breeding to Top Stallions

This year Nothhaft bred two of his mares to American Pharoah. Kindle is carrying a colt and graded stakes placed Halljoy, who he purchased in UK and raced in California, is expecting a filly. 

"The plan is to sell the Kindle and retain the Halljoy to race," he said. "We believe the Kindle could be a very commercial foal.  This year Kindle and Living the Life will be bred to Pioneer of the Nile. We are moving to stress quality over quantity. I can’t think of anything better than to own a high-quality PA-bred running there.  As the breeder and owner, the right PA-bred horse can be very exciting and profitable."

Nothhaft believes Pennsylvania's breeding program has weathered the storms of budget fights in Harrisburg that stopped its momentum after the economic meltdown of 2008/2009. He sees reasonable stability and improved breeding incentives.  

"I am starting to increase my activity again in PA after moving resources to other states over the last few years," he noted. " The current program is one of the best if not the best in the U.S.  The PHBA has become aggressive in promoting PA’s advantages.  It takes a while to turn a large ship, but I see activity and enthusiasm starting to pick-up. Our industry is fueled on discretionary income, and the stock market is always a good barometer on how things are going to develop."

Nothhaft is bullish on mid-Atlantic racing, pointing to Pennsylvania being in the early stages of a turnaround with new legislation and increased breeder awards, along with Frank Stronach’s strong commitment to Laurel Racetrack as well as Delaware Park's being stabilized at a reasonable level.

"If nothing changes we could be at the beginning of a golden era for the Mid-Atlantic," Nothhaft observed. "My view is one of guarded optimism and excitement going into the next few years."