David McDavid knew he had turned the corner from car dealer to cowboy when he decided to pay $1.5 million for a stallion.
The year was 2001. The horse, Hes A Peptospoonful, caught the eye of McDavid and other competitors at the Futurity in Fort Worth, the annual Super Bowl of cutting horse events, where the 3-year-old was “head and shoulders above anything else in the pen.”
McDavid decided he had to have him and ended up paying what he called an “outrageous” sum.
“When I bought that stud and called my CFO to write the check, he said, ‘What? For a horse?’” he recalled.
Hes A Peptospoonful would turn out to be a good investment for David and Stacie McDavid, paying for himself in handsome breeding fees over the years. It also turned the couple’s hobby “into a full-blown enterprise.”
Such a transformation is not unique in the cutting horse world. The sport, where competitors ride into a herd of calves to “cut” one out, then aim to keep it separated in what becomes an artful dance between horse and cow, is filled with wealthy executives and entrepreneurs who trade business suits for Western duds and trek to dusty arenas to compete on a different playing field.
Other enthusiasts include Wal-Mart heiress Alice Walton, who has a horse operation in Millsap; Glade Knight, executive chairman of Apple Hospitality, a leading hotel real estate investment trust; Hollywood producer Chuck Roven, whose movies include The Dark Knight and American Hustle; Tom Bailey, founder of the mutual fund giant Janus; and car dealers Jerry Durant and James Wood. Over the years, the sport has also attracted its share of former athletes, including NFL stars Joe Montana and Jay Novacek.
Many were in Fort Worth last month to compete in the National Cutting Horse Association Super Stakes, one of the sport’s three big events held annually at Will Rogers Coliseum. From attorneys to auto dealers, investment pros to real estate executives, these high achievers share a love of horses, a thirst for competition — and the financial resources to fund their passion.
“To be involved in cutting is not an inexpensive proposition,” said Barbra Schulte, a veteran cutting horse trainer and riding coach based in Brenham. “By its nature, it attracts people who have been very, very successful.”
Like McDavid, many get into breeding so they can raise their own winners, settling in the horse country west of Fort Worth. Mac Coalson, a longtime real estate broker in Parker County, estimates that the area has 300 horse ranches, with buyers coming from as far away as Brazil and Venezuela.
‘Very healthy’ industry
Jim Bret Campbell, executive director of the national association, said the sport attracts a wide mix of participants, from members of ranching families to working professionals to people who have made a fortune in business and “enjoy being a cowboy.”
The economic downturn took its toll on the horse industry, resulting in a dramatic decline in breeding. But participation at cutting horse events has stabilized in recent years, Campbell said, and prices at horse sales have increased with the rebounding economy and a smaller supply of horses.
Today, the industry is “very healthy,” he said, and brings big dollars to Fort Worth. A recent study done for the association says its three big cutting horse events at Will Rogers Coliseum, known as the Triple Crown, generated more than $30 million in spending in the city last year, from hotels and restaurants to saddles and Western wear.
Association members report an average investment of $2.3 million in Parker County ranches, with 138.3 acres and 14 horses.
Dan Hansen has one such ranch. The Idaho native, who grew up on a ranch and competed in rodeo events as a kid, built a successful construction business over three decades. As he got older, he and his wife decided that riding cutting horses was an event they could participate in together.
In 1997, they bought a place in Weatherford that would become their KD Bar Ranch, where they have about 30 horses. Now semiretired, Hansen said he and his wife now split their time between Texas and Idaho, where he also has a working cattle ranch.
Over the years, Hansen said, the sport has provided a welcome respite from the pressure cooker of the business world.
“You put on your cowboy boots and your cowboy hat and bluejeans, and you’re almost in uniform. It’s almost a disguise from what you’re used to in the business world,” said Hansen, 63, whose Hansen-Rice has built about 30 distribution centers for Wal-Mart, including one in Sanger. “You’re kind of able to escape and slip off into a different world.”
‘You do what?’
Others are unlikelier cowboys.
Jon Winkelried was climbing the corporate ladder on Wall Street when he bought a ranch in Colorado and began trail riding with his family. Then the New Jersey native hired a cutting horse expert to do a demonstration for friends and he hopped on and gave it a try.
“I went in there and cut a cow out and tried to hold on for dear life,” he said. “And it was like, ‘This is really cool.’”
Before long, Winkelried was making his way to Fort Worth to attend events and meet people involved in the sport. In 2005, he bought a ranch in Aledo, the year before he was named president and co-chief operating officer at Goldman Sachs. Several times a year, as colleagues headed to the Hamptons or the mountains for a weekend getaway, Winkelried traveled to places like Glen Rose and Alvarado to compete.
“Most of them did not understand it at all,” he said. “They’d say, ‘You do what?’”
After helping guide Goldman Sachs through the financial crisis, he decided to leave Wall Street, retiring in 2009.
“I was ready for a change,” he said.
Winkelried, 55, said he approached his cutting horse hobby like a business. He built his Marvine Ranch into a 100-horse operation with about nine employees. In less than a decade, he produced 23 age-event champions before an injury led his wife to quit riding and the couple decided to wind down their operation.
They auctioned some horses, sold others to the McDavids and put the ranch up for sale.
“The competition was kind of contagious,” said Winkelried, referring to both riding and raising the horses.
“There’s a very cerebral aspect to it. If you really want to do it well, you really have to think about what you’re doing,” he said. “There’s a lot of thinking to be done. That’s the aspect I actually liked a lot.”
‘It’s a lot of fun’
Schulte, who has helped a few businessmen like Winkelried set up horse operations, said they are attracted to the challenge of the sport.
“It’s so agony and ecstasy, so invigorating and yet it’s so difficult,” Schulte said. “You can be on the verge of winning $200,000 at the Futurity and in the last five seconds you can lose it because the cow decides to put a dirty move on you. There’s this element of suspense and challenge.”
Schulte said it’s natural for executives to want to apply their business skills to the cutting horse enterprise, but it doesn’t always work because “by the nature of animals, it’s too unpredictable.”
In the business world, “you can set parameters, you can hire and fire,” she said. “With the horses, not only do you need savvy, but you need lady luck on your side.”
For that reason, she finds that businessmen who succeed and stick with cutting are not in it to make money but develop a true passion for the sport.
Bailey, who founded the Janus mutual fund company in 1969 and is now a billionaire, agrees.
Bailey was introduced to horses after he retired and bought a small ranch in Colorado so he could go fly-fishing. He first rode a cutting horse under the watchful eye of Schulte, likening the feeling as the horse quickly makes its turns to an exciting ski run.
“It takes a lot of time to be halfway proficient at it. If you like the horses and appreciate the horses, it’s a lot of fun,” he said. “It’s a sport. It’s a joke if you want to do this for money.”
‘Truly love cutting horses’
What started as a hobby for the McDavids has become a business and a lifestyle.
A Weatherford native who recalls riding his horse to the movies as a kid, David McDavid attended cutting events with his father but found them boring. Following his father into car sales, he built a network of 23 dealerships around Texas that he sold in 1998 for about $260 million to Asbury Automotive Group.
Reintroduced to cutting in the early 1990s by a colleague in Houston, he decided to get involved.
“If you have a competitive spirit at all and you get older, some of the things you used to compete at, you physically can’t really compete with younger people,” said McDavid, 73. “And this was an event that you could. I loved it.”
He bought a horse for Stacie and persuaded her to ride as well. A former college track star who rode horses for recreation as a kid, she was lured by the challenge. “I knew we were going to have to devote a certain amount of time if we were going to be competitive,” she said.
They started out simply, “but before long we realized that there was some potential to make some money out of it,” he said. They acquired some highbred mares and started breeding. And then along came Hes A Peptospoonful.
The stallion’s success at the Futurity and other shows generated interest. Breeding fees started rolling in, up to $8,500 apiece, and the couple expanded their stable of mares to crossbreed and “own the factory,” he said.
The business was rolling until 2008, when “the bottom fell out” with the financial crisis.
“We’re just now getting out of that,” he said. “The whole equine business was hit, not just cutters.”
Today, the McDavids run a scaled-down operation at their Thunderstick Ranch in Parker County. Despite the unexpected death of Hes A Peptospoonful in 2012, the couple still breed mares and have about 60 horses, down from a peak of a couple of hundred.
“The thing about the McDavids is that they love the sport,” Schulte said. “They have applied very sound business practices. But through the ups and downs, they’ve stayed with it because it has been fun for them. They truly love cutting horses.”
David McDavid said he has always considered himself a cowboy and now revels in being known as “the horse guy.” Stacie McDavid, who grew up in Denton, said there’s something special about living the Western lifestyle.
“It’s definitely not fantasy. What it is is romantic,” she said. “Everything about it is romantic.”
Steve Kaskovich, 817-390-7773