Race horse syndication.

It's big business. Given the number of the syndicators competing for business - who is out there and (more importantly) how do they differentiate themselves?

For the purposes of this case study I have focused on Team Miracle. Lord Lodge, Shelley Hancox, Aquanita, Star Thoroughbreds and Slade Bloodstock will be discussed in separate studies.

Syndication for the masses

Team Miracle is based on the theory that anyone can be involved in horse ownership. The company does this by creating such a large shareholder base that costs are kept to a minimum. They charge a one-off fee (unlike most syndicates which have monthly fees in addition to the purchase price of the share) and generally design syndicates that involve more than one horse. These large-scale syndications have a lot more to do with people feeling part of something, being able to say they own "part of a racehorse", and having a vested interest in watching the races than on tangible dividends (although the (very faint) possibility of that is always an added incentive one presumes).

The concept for 'Team Miracle' came from Malcolm Johnston, a famous Australian jockey who was branded whilst still in the saddle as the 'punters' pal'/ 'Miracle Mal'.

The company's objective is to extend the opportunity of racehorse ownership to people from all walks of life without outlaying the considerable expense involved in purchasing a horse and then meeting the substantial ongoing costs (transportation, breaking in, training [and related racing] fees, agistment, feed, veterinary care, farrier etc etc).

Malcolm Johnston trains the horses out of his Miracle Lodge complex at Hawkesbury, NSW, Australia. Malcolm is a director of Team Miracle, along with businessman/solicitor/racing enthusiast, Mark Duffin, and veteran sports journalist, Greg Martin.

Syndicate structure

The first syndication was named Team Miracle No 1. The syndicate consists of 1000 shares, each of which was sold for $650. Many of those shares are split between two or more people.
(For example, 28 members of the Batlow Hotel Punters Club share in Team Miracle No 1 Share 0032. Each of those 28 BHPC members is regarded as a full member of the syndicate.)

4 horses make up the Team Miracle 1 syndicate and the individual share price of $650 covers the full cost for three seasons after which the horses will be sold and dividends issued from the proceeds of the sale and any accumulated prizemoney.

Team Miracle No 2 consists of 100 shares in one filly. Each of the shares cost $1582 – again this is the only outlay shareholders make during the life of the syndication, which is three seasons. Again, dividends will be issued from the sale of the horse and any accumulated prizemoney.


Marketing differentiators

Target audience

The target audience for this syndication business is a group who would not normally be able to afford to own and race horses individually or as a small group. Of interest the company is also targeting the corporate sector with Corporate Packages for just $1999 (entitling a company a share in Team Miracle No 1, Team Miracle No 4 share and a framed and autographed The King and I print signed by Miracle Mal Johnston ... no doubt for the office wall).

The name of the game at Team Miracle is ‘fun' ... "Enjoying the thrill of racing a thoroughbred and mixing with like-minded people". Thus, As well as racing their horses, Team Miracle members participate in a number of functions such as trips to bush race meetings, harbour cruises, golf days and Team Miracle ‘soirees'. It's all about creating a sense of community.

Pricing

In each of the syndications, shareholders are given the opportunity to join by way of a part payment scheme - a $250 deposit and regular installments.

The deposit/time payment plan is a rather novel approach. "The whole idea of the concept is not to preclude anyone from becoming a member just because he or she couldn't come up with the entire share amount," Mal says on the Site.

Communication

With this number of owners the syndicate designers had to be careful how they managed the communication aspect with clients. As a result the website provides almost daily updates via the "Miracle Murmers" column.

Branding

Branding takes place via a well designed Website (http://www.teammiracle.com.au/default.asp) and a focus on merchandising. This syndicate is positioned to appeal to those people who wish to be part of a specialist community. Identification with the community is enhanced via the use of merchandising - in addition to polo shirts, the company offers, for example, sterling silver rings in the shape of the Team Miracle logo to signify "your affiliation with Team Miracle" and photographs.

The company uses language such as "join the team" and "affiliation" to encourage people to feel that sense of community.