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Planning for Success-Businessman Nothhaft Breeds a winner with Pennsylvania Breeding Program

May 23, 2014 No Comments »
Planning for Success-Businessman Nothhaft Breeds a winner with Pennsylvania Breeding Program

Henry R “Hank” Nothhaft Photo Anne Litz Mid-Atlantic Thoroughbred

This Article Originally appeared in the June 2014 Issue of Mid-Atlantic Thoroughbred
It appears here in its’ entirety with Mid-Atlantic Thoroughbred’s permission.

This article authored by Cindy Deubler

Click on Photos for larger image and captions. Supplemental videos added to this article.

Mid-Atlantic Thoroughbred

Henry R “Hank” Nothhaft knows business. Studying spreadsheets,
business plans and bottom lines is second nature to the Pennsylvania
native who resides in California and made a career of taking hightech
start-up companies in California’s Silicon Valley and nurturing them
into multi-million-dollar businesses. Nothhaft applies his business acumen
to Thoroughbred racing and breeding and has his plans in place. Locking onto the
Pennsylvania breeding program, the affable and energetic CEO has leaped in with
both feet, building a broodmare band he boards at Northview PA in Peach Bottom,
investing in stallions, and creating a racing stable on both coasts. And he’s enjoying
every minute of it.
“As a lifelong entrepreneur I knew I’d be bored out of my mind when I retired,
so I thought ‘I’m going to have to start a business to run before retirement occurs,’ ” said Nothhaft, 70, during one of his trips to Pennsylvania over the winter to visit his growing broodmare band. “So I did an analytical approach. . . the competition, the
data-driven aspects, the massive amounts of bloodlines. It had always appealed to
me – it’s very competitive, instant feedback, outsourcing model, no employees, and so
on. I put together a bunch of factors and I chose horse racing and breeding.”
Nothhaft (pronounced note-off) was born and raised in western Pennsylvania,
near the Ohio border, and had no previous
background with horses. His earliest introduction to live racing came at the
Standardbred tracks near Columbus, Ohio,as a teenager. It was a fun diversion.
Nothhaft went the military route early in his career – he graduated from the Naval
Academy in Annapolis, Md., and was a Marine captain who served in Vietnam – and
followed that with graduate school, which led to his introduction to the technology
world, which led to sales for high-tech companies in the 1970s. “That’s very close
to being an entrepreneur,” said Nothhaft, who is quick to admit that he always wants
to succeed in anything he tries to do. “Next thing you know, I wanted to be more than
the guy selling the stuff, I wanted to be more involved in the company and running
it.”
Nothhaft’s passion for the American dream is boundless. The loss of business
in recent decades in the Silicon Valley prompted him to write the highly acclaimed
book Great Again, which came out in 2011 and explores solutions to return the United
States to prominence as an innovation leader in the world.
More than ready to speak out about the political climate in Pennsylvania and its
adverse effect on the breeding industry when discussions come up about taking
away incentives.

Hank with Randie's Legend in foal to Stormy Atlantic

Photo Anne Litz Mid-Atlantic Thoroughbred

“People who are serious about making significant investments in any industry,
including Thoroughbreds, like to have a long-term horizon. And some predictability,”
said Nothhaft. “So if the landscape is negative, you can take that into effect
and decide whether you want to be in that business. If you have a positive environment
and positive incentives, which Pennsylvania certainly has, but you think
they are fleeting and may be taken away at any time, it’s very hard to make multimillion-dollar long-term investments in the industry.”
Nothhaft slips easily into using corporate-world terms when describing his
Thoroughbred operation. “The goal is to breed to race and sell and get quality to
the point where it becomes self-sustaining or grows from the reinvestment of the
profit.” He owns approximately a dozen broodmares, has a stable in California
with trainer Gary Mandella and another string at Parx Racing with trainer Keith
Nations, who had been based in California. “My commitment to Pennsylvania racing is
bolstered by Nations’ move to Parx as my exclusive [East Coast] trainer,” he said.
As with any business plan, adjustments are often necessary. Nothhaft initially
started purchasing horses in California in 2006, but when the financial market experienced its setback in 2008, he sold off all his California assets (although he still has one broodmare in production in the state) and decided to relocate to Pennsylvania because of the strength of the state-bred program.
Nothhaft had already done a lot of homework. “In 2006 I started scratching
the surface of studying pedigrees,” he recalled. “I wrote a business plan. This
was part of that analysis I did. I went to a couple of seminars that the Thoroughbred
Owners of California ran, learning the ins and outs of horse racing, what all the rules were, tax implications and record keeping, breeding. Then I plugged into The Blood-Horse [magazine]. I bought all the books in their library, from breeding theories totaking care of mares. Even though I don’t run a farm, I read all those books and watched all their videos on how to evaluate horse flesh.
“I spent a lot of time self-educating, and then I started meeting people in the
business through these seminars and asking a lot of questions. I’ll be quite honest –
some of the people I got involved with initially, I made poor choices. They weren’t
terrible people, they just weren’t effective and not the right people for me. It’s good I got started to breed to race in California and we had the massive setback. It hit me in the face.”

Hank and Gary Mandella Santa Anita Paddock Area

Photo Hank Nothhaft Jr.
One solid connection Nothhaft made in California was Mandella, his trainer since
2010. Purchasing yearlings for Nothhaft under the HnR Nothhaft Horse Racing
banner, Mandella and bloodstock agent Mary Knight selected the Indian Charlie
filly Kindle at the Keeneland September Yearling sale in 2009 for the novice owner,
spending $50,000.

Kindle Battles Mizdirectin in Grade II Monrovia Stakes

Benoit Photo

Kindle has overcome numerous setbacksto win or place in nine of 11 starts,
take two stakes and hit the board in four graded races. She even pushed two-time
Breeders’ Cup Turf Sprint-G1 champion Mizdirection in last year’s Grade 2
Monrovia Stakes at Santa Anita, losing by a half-length.
Destined for Nothhaft’s broodmare band, the 6-year-old once again went to
the sidelines in January following a solid second in the 2014 Monrovia, her first
start in nearly a year. Back in training, she is being prepared for the Royal Northern
Stakes at Woodbine in late July. Should all go well, a trip to Parx for the Grade 3 Turf Monster in September is on the agenda before returning to California.

Video

Kindle Duels Mizdirection in 2013 Monrovia Stakes

Another significant accomplishment for Nothhaft came through his association
with bloodstock advisor Carl McEntee, formerly with Ghost Ridge Farm and
Northview PA before leaving for Darby Dan in Kentucky. The two met in the
fall of 2010, and McEntee has advised Nothhaft on purchases of broodmares and
European-based fillies at the track. Among the broodmares was Sulis, a
young winning daughter of Maria’s Mon who cost Nothhaft $105,000 at the 2012
Keeneland November sale while carrying her first foal. Three months later, Sulis
delivered a filly by Harlan’s Holiday at Northview PA. In November, the filly was
in the sales ring at Keeneland, selling for $250,000, the top price for a Pennsylvania bred weanling last year.

Sulis 2013 by Harlan's Holiday

Photo Henry R “Hank” Nothhaft

Video

Sulis 13 Harlan’s Holiday Keeneland Sale

“Carl has an uncanny eye and a willingness to have a discipline in bidding for
horses when buying mares, yearlings or whatever,” said Nothhaft. “We set very
specific goals and budgets. . . I go to all the auctions now that I’m retired – even beforeI was retired I went to most of them. Carl and I will sit there and agree on a price before we walk into the room. We haven’t chased the horses – we’ve passed on hundreds But because of our good planning and discipline, we ended up buying a horse
like Sulis. A fantastic buy.
“Our goal has always been to buy the mare in foal, and have the first foal cover the purchase. And so far, other than a couple I kept myself that we could have sold for that, we’ve accomplished that.”
Another rising star found by McEntee is the 4-year-old filly Living The Life (Ire),
a daughter of Two Thousand Guineas-G1 winner Footstepsinthesand out of a Machiavellian
mare. Purchased in February in England for $60,000 and transferred to the
Newmarket training yard of McEntee’s brother Phil, Living The Life has since
won twice in four starts over the all-weather track at Lingfield.

Carl McEntee Hank Nothhaft Phil McEntee Stakes Winner Living the Life Lingfield

Photo Becky McEntee
Her final start before shipping to California came in the $252,000 All-Weather Championship Fillies and Mares Condition Stakes April18, which she won easily. She will be pointed to the Del Mar meet this summer. “Part of my plan is to buy pedigreed
fillies in the U.K. for value prices equal to their U.S. residual value and then try to step them up by succeeding on the track in the U.S.,” said Nothhaft. Two other fillies following that path are Macaabra (Ire), a 4-year-old daughter of the hot international sire Exceed And Excel out of a Sadler’s Wells mare, and the Irish-bred Halljoy (by Halling), Group 3 placed in England last year at 2. Macaabra joined the Mandella barn in 2013, and won an allowance race at Santa Anita this year. Halljoy shipped to the U.S. with Living The Life and is awaiting her first start in the HnR Nothhaft Horse Racing colors.

Living the LIfe Jockey Adam Kirbey led by Phil McEntee Trainer Hank Nothhaft Owner to Winners Circle AW Championship

Photo Ian Headington

Videos

Living the Life Wins All Weather Championship 2014

All Weather Championship Post Race Interview

Those silks have special meaning to Nothhaft – they are Navy blue and gold. “I
have the same relationship with the Naval Academy as I have with horses, I love it,”
he said. And while Nothhaft’s wife Randie and sons Hank and Ryan and their families
enjoy the horses and going to the track onthe West Coast, he said it “has turned into
more of a business for them because it’s isolated from them.”
But Nothhaft can’t help naming horses for family members. One of his most
prized broodmares, somewhat to his wife’s chagrin, is Randie’s Legend. Nothhaft
laughed when he said, “My wife said I could continue in horse racing as long as I
didn’t name another horse after her.”Another was named First Blue Angel
(in honor of his father-in-law Capt. Roy Marlin “Butch” Voris, who founded the
Navy’s Blue Angels flight demonstration squadron). And when he had two grandsons
born a month apart this past year, Nothhaft named a California-bred yearling
using their first names, Sawyer and Jett. “When Sawyer’s Jett goes to the track,
we’re all going to go. I had named her something else, but when we had the two
babies, I wanted to name a horse after them that they could see.”
Nothhaft supports numerous stallions, but connected immediately with two.
Smarty Jones was among the first horses he invested in when launching his
Pennsylvania operation. Nothhaft not only owns shares of the Pennsylvania-bred star,
but revealed “I have a poster of a movie they’ve done on Smarty Jones. I have a
Moneigh by Smarty Jones. I’m a true fan of Smarty Jones.”

Smarty Jones Enjoying the Sun Northview Mar 2014

Photo Henry R “Hank” Nothhaft
He also had a special connection to Breeders’ Cup Sprint-G1 winner Silver
Train. Standing a stallion in the region was an integral part of Nothhaft’s initial business plan and his analysis led him to look for a horse who could stand at a fee to
suit the region, throw winners at distances up to a mile, and produce durable runners.
Silver Train checked every box he moved to Pennsylvania for the 2012
season. The millionaire and A.P. Indy grandson was well received during his two years in the state and provided Nothhaft an opportunity to experiment. Soon after his arrival, Silver Train had a website and Facebook page.“I feel horse racing is an under-covered sport,” said Nothhaft. “So we had our own website, and we could put up any information on Silver Train that we wanted instantly. I had a blog, I wrote a lot of the articles that were there. We had a very active Facebook page. We had really core, true followers who were following the horse. I did a lot of that activity personally. So I learned that social media can be a powerful force.”
The use of social media remains important to Nothhaft, whose mare Kindle has a
Facebook page (HnR’s Kindle) and a section on the Silver Train website.

Silver Train Breeders Cup Sprint Champion

Photo Henry R “Hank” Nothhaft
“It’s amazing when we put a note on there, the interest levels we’ve got on her,”
Nothhaft said. “We’re trying to create value, and Kindle is a brand. She’s got a
following. People want to know when she’s racing. I’m going to try to have some of my
horses as the HnR brand. Hopefully that [Harlan’s Holiday] foal we sold will go to
Saratoga. I hope they get a million dollars and I won’t have any regrets. I own Sulis,
and I sold the horse for good money, and it would help our brand. That’s how you have
to look at it.”
The loss of Silver Train, who colicked while in quarantine in Brazil after standing
in the Southern Hemisphere last fall, was an emotional blow to Nothhaft. And it was
a blow from a business point of view. “I do insure myself, so it wasn’t a nearterm
loss of capital, it was the business momentum,” said Nothhaft, who owned
87.5 percent of Silver Train. “It takes years to get this pipeline going and we had two years worth of getting him going and we were ready to press on the accelerator. It
was a setback.”Nothhaft has moved away from stallion ownership.

Will El Padrino become the next great Pulpit Sire

Photo Anne Litz Mid-Atlantic Thoroughbred
“As far as being an entrepreneur you have to assimilate that, reassess your plan,
look at your strengths and weaknesses, see where you are and go forth,” he said. “I’ve
definitely shifted the emphasis very heavily to high-quality mares, with some ownership of seasons as it makes sense. I found I really don’t need to own the stallion and it gives me more flexibility.” In addition to his interest in Smarty
Jones, Nothhaft has shares in Northview PA stallions Jump Start and El Padrino.
Nothhaft also uses stallions in Kentucky, this year sending mares to, among others,
Scat Daddy, Gio Ponti, Tale of Ekati and Dunkirk.
Nothhaft plans to keep his Silver Train offspring to race. He has five yearlings
by the stallion, including a colt named Thepennsylvaniakid. The final Silver Train
foal bred in his name, a filly out of the Unbridled’s Song mare Aloft born April
19, will be named Silber Zug, which is German for Silver Train. “I’m German by
heritage. . . I generally don’t name horses that I might sell – so that one’s a keeper.”
This year’s Pennsylvania foal crop for the breeder numbers nine, including a
Scat Daddy filly out of Sulis, a Stormy Atlantic colt out of Randie’s Legend and a
Ghostzapper colt out of Canary Diamond, one of Nothhaft’s more recent purchases,
out of the Adena Springs consignment at Keeneland last November.

The Pennsylvania KId (s)

The Pennsylvania Kid (s)

Photo Anne Litz Mid-Atlantic Thoroughbred
“The thing I do like about horse racing, it’s a constant, instant feedback on your
decisions and how you are doing,” said Nothhaft. “Between the racing stock, the
ones in the pipeline, the broodmares, the foals and everything we’ve got going, there
is constant feedback on your decisions and how well you are doing and how well you
are managing your business.

“It’s just exciting, I just have a passion for it. Everything I have ever been involved with I’ve had a passion for it. I don’t have many regrets, if any, but one is I wish I would have gone into this business 20 or 30 years ago, because it’s a long lead-time business. To do it yourself, and bootstrap it, and create the success yourself takes time.”

Photo Anne Litz Mid-Atlantic Thoroughbred
Nothhaft appears to have found the formula of mixing business with pleasure.
“Having a long-term plan, and setting achievable stretch goals, and managing that
plan – that could work in any business. So you get into the horse-racing arena – I’m
sure this is true of startups in technology too – some companies have very concise
goals, very well thought out plans, they execute, they review their results, they
adjust accordingly and so on. Those outfits sometimes can succeed without having the
best technology. That certainly applies to the horse industry.
“[The racing industry] has a variety – big companies to the individual participant.
But at any level, the person who has the appropriate plan will be the most successful.
I really believe this.”

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