I don't get it. Why would your friend's father be mad at the consignor? The consignor offers him double what he paid for the horse and your friend's father gets mad? I don't get it. What am I missing. there is nothing sinister here. I don't see what the problem is. This type of thing happens all the time, even in real estate. It's not uncommon in real estate for someone to buy a property for $1 million and then get offered $1.1 million a week later.

Rupert I had to reread that post 4 times to try and understand the problem!!!
What the hell is the matter with that? They should have fallen to their knees and thanked the guy for doubling their money in one day.
I don't see a thing wrong with that on either side.
Many times a guy will have a client who says I like horse number "123" in the book, what do you think he will go for? Agent says, that one oughta go for about 400 grand. Guys says thats too much for me. So they don't even bother trying to bid.
The sales results come out the next day and number "123" sold for 180 grand. Client says geez, I woulda gone to 250 on him. So they call the buyer and often times the horse is flipped on the spot.
Everyone should be so lucky!!!

That is exactly right.

The above is an example of how it works most of the time.....people would be shocked if I mentioned names of trainers and bloodstock agents that I have a VERY knowledgable account of them pulling these kinds of shady deals.....shocked I tell you...I could even nae the sales, the horses and the way it was done - but I obviously would never do that here....I acknowledge these accounts on this forum just to let you understand how FURIOUS I get when I hear or see it happen....:mad:

It is the single biggest thing wrong with our industry today IMO...OWNERS PROTECTION (we don't do enough of it) these guys screw (gentle term) the very people that fnd the game and personally patron them as trainers and keep them in business...How cold is that?

An absolute cancer to our game and it WILL eventually kill our game...mark it down, unless something changes....Think about it for a minute...There are too few wealthy persons that are eligible to own horses anyway - say maybe the top 3-to-5 % people in the country and less in the world (percentage wise)....Now, tell these owners - many of whom made their fortunes through SOUND business practice - that they will now be investing in a game that is a 95% chance that they will lose money every year involved based on racing costs and revenues, and is also a high-risk proposition in terms of the actual principle investments itself (the horse(s) ) as far as paying $5,000 - $5 ,illion on an animal that can break down or colis and die at any minute....Adding to the intrigue now, you have these *******s - these opportunist leaches and scumbags of the earth - who are supposed to be your advisors to help you succeed in the game when they are really looking to drain you for every dime you can before you have bad luck and leave them (which is inevitable)....(BTW, I've even heard a VERY famous trainer say that he drains them aggressively early on because you never know how long they'll be with you - referring to rich clients)...Once horse racing is exposed for this type of wide spread scandal beyond the other scandals that already exist in our game, DOES THIS SOUND LIKE A GAME YOU WOULD BE INTERESTED IN INVESTING YOUR TIME, MONEY, AND ENERGY IN? :eek:

These *******s are getting rich on ZERO credentials and ruining our great game at the same time...I hope everyone of them gets caught and prosecuted..I really do....we have to come up with a better way to protect our owners before it is too late to where our reputation is such that horse racing will be known as a game of frauds and cheats and one that nobody will touch with a ten-foot pole when it comes to investing in it....scary thought, but think about it..

I don't care how dumb some people are, NOBODY will just sit there and lose their ass in an industry and take it with a smile - I guarantee you that...not even most of the wealthiest people in the world.....and now with all of this stealing and dirty business with trainers and agents with buying horses - I REALLY guarantee that people won't sit back and get humiliated and allow people to cheat them, even if its more principle that money driven...

Let me also say this.....trainers need to accept more responsibilty when it comes to buying horses legitimately too IMO......If you are a trainer and you think a horse is worth $100,000 and want to buy him at a sale and you go to $150,000 to buy the horse because you think you can because it is the owner's cash and not yours - that is wrong and unethicle IMO....Trainers should spend the money as if it was their own, but they don't becasue they are usually lazy and ultimately do not care about what the owner spends for a horse as long as they get to train it....(not all trainers are like this obviously..I'm singling out a popular group that I see this sort of behavior from all the time). I laugh because they raise their hands like its no big deal at all....I watch some of these guys at the auction..a horse will be going $400,000....$450,000....$500,000 and the hands effortlessly go up in the air and I can't hal;p but think to myself with soem of these guys that "Damn, he has never probably even seen $500,000 in his total life - yet he is effortlessy bidding it as if it were like chump change" - how ironic I find that....

This game has ALOT of horrible habits ad traditions that simnply need to be run out...they are cancerous and sometimes as an owner you almost get the fealing as if your are supposed to be f *cked over in this game when this sh it happens....its almost like they expect you to accept it....

The overall fact that the owner economics in this game are WAAAY upside-down suggests that we really need to address this issue fast and make it right...

Think about it...if you were a stockholder in a company that always lost money, wouldn't you sell and find a better investment?..Of course you would....Owners are the lifeblood of the industries...without them there is no product...no horses....no trainers get paid, no jockeys get paid - see where I'm going?

Yet despite that fact, 95% of the owners in our game lose their asses every year while some of the trainers and jockeys get rich....upside-down economics....

Owners pay for everything...the last thing they need now is getting a ram-job from these *******s who claim to be professionals - but are really just fraudulent crook hillbillies that call themselves trainers and bloodstock agents (again, most trainers are probably okay people...as for agents - no comment...I'd never use one...)

The way I read it is the father's deal got pushed off the table by the consignor when the bigger money showed up.

Could be wrong, but that's how I read it.

Joel I agree with just about everything you say. Its extremely frustrating to be an agent in private sales, attempting to purchase one who has already shown ability on the racetrack, and not be able to get someone to pay 300 grand for a horse who has already shown proven ability, yet see people paying high 6 figures at sales for horses that have almost zero chance of ever earning that much.
I've just never understood that, as hard as I try. I realize that people at yearling sales are buying " dreams" and can fantasize that they just bought the next Smarty Jones(until it debuts of course) but it makes no sense to me and never has.
I wouldn't paint all agents with the same brush. The day that Edmund Gann met Mark Reid was indeed a lucky day for him. Mark buys off the track and purchased medgalia for the neighborhood of 350, and the grade one winning mare You for a pittance, Peace Rules, etc.
Frustration is asking someone if they are interested in a filly who debuts with a solid number and decent pedigree and hearing no, and then seeing them buy a yearling for 800 grand the next week.
I think that painting all agents with the same stroke is unfair. Agents have become specialized in different areas and not all buy at auctions.

Stud he can't do that. No way. Once the horse is sold at auction its the property of the buyer. Doesn't matter if they show up with a boatload of money the next day. If that consignor actaully did that he could be sued and see no way that he could win the lawsuit.

THIS is what people in positions of influence in the industry should be writing about. How come this story is never found in the racing press until it's too late, then it just gets swept under the rug?

I'd guess things are different state by state... true? Even if that's true, why aren't there "model" regs from an national organization (NTRA?) in place?

Disclosure, audiitng, etc... And if it's as bad as this, I gotta assume a lot of the dirty money is cash.

I might add that the reason people use agents in private sales and buys is time. Most owners don't have the time or the know how to watch a zillion races a day, nor do they want to. They figure if they hire someone to do it, that its worth a small percent.
By the same token agenst are often used to sell horses, especially brrodmare and sire prospects. Owners simply have too many other things going on in their lives to do that. it involves making a lot of phone calls and contracts and haggling, etc. So they just tell someone how much they want for a horse and let them do what they consider to be nuisance work for a percentage.

No. He said that his friend's father bought the horse in the auction ring. Then the next day, the consignor offered the guy double for the horse. Once you buy a horse at auction, the consignor can't back out of the deal even if he is offered 10x more for the horse. The only thing he could do is ask you if you want to sell the horse back to him or to another buyer.

it is amazing that people are so shocked by this type of thing. all of the top people in this business cheat and lie. drugs are rampant too. horse racing is no different than baseball, cycling, track & field, football, etc. cheating and lying are in every sport where there is money. it is amazing people think these businesses are honest. if you don't cheat in some way, you will never get to the top. some honest guys have the occasional horse, but the guys consistently at the top are the best cheaters.

o80, rupert, c-ham... thanks for the insights. Most of my assumptions were wrong. Goes to show to do business only with people you trust and then do so carefully. TY again.

Let me rephrase that - agents AT AUCTION...too many of them are in cahoots with consignors and it is simply a matter of running up as much money as possible between the consignors and agents and then chopping it all up at the end of the day - end result: Consignors and Agnets are overpaid for their product and the owner gets his horse paying way more than it was worth......If I would have journaled everytime I have seen this behavior at sales or heard of it first hand, I would probably have a pretty significant binder....damn shame...:(

The problem that lies here is that some of the people that advertise and patron many of these publications are the same people who participate in this type of stuff - and you obviously don't want to lose thier business...

I agree that its not right at all and i've been waiting on that brave soul who knows its going on and has the balls to do a write-up with documented incidents and exploits the cheats for who they are.....I wait for it everyday but knowone willl ever do it for the same reason I won't do it - I want to keep my job :)

Sucks....but its taboo....

Explain to me how George Steinbrenner gets cheated out of his cash in the major leagues.....Unless Cashman is embezzling from him then he doesn't....the bottomline here is that its the financial supporters of this game who are being cheated.....not just people "cheating" in general....

If Cashman embezzled money from the Yankees he could be booked for it and face jail time, yet when an agents basicaly steals $95,000 from a horse owner he works for - he just gets suied over it.....

If you can find 300 grand that I ever made buying a horse at a markup, you can keep 298 grand of it and just give me two grand to play the Belmont card tomorrow.
Private buying agents probably work as hard as anyone you ever met in the whole industry. Honing skills to determine what talent is, then having someone teach you residual value(thank you Mr Fox, the guy on Steves radio show lately is the guy who taught me when I was younger), then having to make a thousand phone calls that almost always end with no sale.
Then you have to work hard to find clients who trust you and trainers who trust you.
All for 5-10% of a deal.
I see guys wearing suits at saratoga who are nothing more than guys who are guessing at pedigree getting into Limos and heading to the windows with wads of bills that would choke a horse to make bets. Must be nice.
By the way, I have made offers for someone who is being accused on this thread many times. Hes had me make offers in the multimillions, multiple times, and hes never ONCE asked me to do anything wrong. Never ONCE has he asked me to pad a deal, and when i asked him if I should split a commission from a possible sale with him the first time I made an offer for him, he said no, thats your money if you get it, you earn it. Hes aces in my book. And I can only judge people based on how they have acted towards me and with me in dealings.
I think all sides of the story need to be heard here before anyone judges anyone.

the sport is full of cheats. only dishonest people and people that keep quiet will ever get anywhere near the top and stay there. this is the case in all professional sports. i laugh everytime i hear people say a guy like lance armstrong did not cheat. they all cheat and horse sales and racing are no different.

The biggest problem with horse auctions lies with the autions themselves. The fact is that you do not even have to be registered to bid on a horse nor does the sales company even keep track of the bids outside of the final one. As a matter of fact the bid spotting process often leads to phantom bids being accepted such as a case where two bid spotters call out the same bidder. But in an unregulated forum that the auctions are cheating and fraud are unusually easy to accomplish.
I think its important to understand that very rarely are all bids live. Most of the time a consignor will assign a Reserve price and then have an agent bid the horse up to right below the price. So the unknowing bidder is actually not bidding against a live buyer, he is said to be bidding against the reserve. Being that you dont know what the reserve is beforehand sometimes the consignors agent will play a little russian roulette by continuing to bid past the reserve, known as running the bid up. This is a fact of life in the auction game like it or not. Often the sale is a bogus one such as when Scipion was sold at Saratoga a few years ago. Bred by Mrs. Payson, he was purchased by P. Biancone, agent. He ran and continues to run as the property of Mrs. Payson. There was no actual sale but he was showcased in the Bloodhorse as the sales topper.

All of these things and the other little issue raised by mattress mac could be eliminated if the sales companies would sell horses like art is sold, numbered, registered bidders. the bids could be tracked and recorded so when there is a problem like this there would be a record of who bid on who. Considering the fact that a billion dollar business is so unregulated it is shocking hat it has taken so long for cases like these to be unearthed. Also all agents that are given bidding privilidges should be licensed and subject to loss of license if found guilty of fraud.

But, alas it wont happen because that would decrease the price of horses therefore decreasing the profitability of those in charge of this sport, the breeders, consignors, and sales companies along with several powerful agents and trainers.

Funny thing about this business is that all the things that would make the sport (racing) healthier like dropping averages at the sales are thought to be horrific to the Lexington and Ocala crowd who really are the profiteers in this industry. Like Joel said if prices keep going up and expenses keep going up and scandals (sales and drugs) keep popping up and purses are stagnant, then how long until the bottom drops out?? Despite the press we could all get along very well without The Arabs, Coolmore and Storm Cat.

Stud,
Lansdon is my best buddy so I don't really work for him anymore, its more like him asking me what i think about something and me being glad to do it for him.

If you are lucky you work with good people. Sanford Robbins is one of my clients and he is about the most honorable human being you could ever hope to meet. Guy does business on a handshake and his word is as good as gold.
If you are lucky you have good folks like that to work for. I couldn't tell you how pleased I was that the first grade one winner I bought was for him(he later sold some of her to IEAH, and they are great folks as well).
You don't wanna hurt people like that, you wanna do good for them. And always remember this, if you don't do any good they don't keep you around. Its the same as any other business, you don't get it done, you are done.

I get so excited at dreaming about that that I have to take a drink just to calm down.
Having the yearling market become more realistic would mean having more middle and lower levl players buying yearlings who have a shot to make it.
That would mean more horses who debut or run well early who could be bought privately at more reasonable prices.
If that ever happens agenst who buy privately off the racetrack will have a much better shot to make a great living just like the "pedigree" experts who make a ton at the sales telling people to go to 800 grand on a horse who won't ever make a quarter.
What a beautiful world it would be!!!

Nice post, Joel.

I feel the exact same way.

Effing right!

I agree with the part that the Sales Companies are not very interested in catching these people because they are profiting too when prices soar beyond the actual worth of a horse(s) - Thus, why should the sales company mandate a task force that would hurt their revenues in the short term and piss off some of their better clients (the crooked trainers and agents)?

Sales Companies need to understand that our market would be healthier in the LONG TERM if we rid the industry of this type of behavior because more new clients would enter the game and there would be more cash at the sales, which would in-turn be more profitbale for the Sales Companies....but nobody looks at the long term in this business....that is also a big downfall of this industry IMO.....

The sales companies are tentative to "take sides" if you will because of exactly what you just said, Joel. I agree.

Why piss off some of your biggest clients when you can just look the other way and write in clauses in your sales agreements excusing you from all liability...

Someone does need to come to the forefront and speak up and do exactly that... Take a side. The right side.

It would seem that Keeneland would get the balls to do this sometime in the near future.

If you are a seller and you put a reserve on a horse, you don't need to bid. The sales company will actually bid against buyers until the reserve is met. So if you are a buyer and you are bidding, sometimes you aren't even bidding against anyone. You are just bidding against the sales company, but you won't know it at the time. They are bidding against you and you think you are bidding aginst another buyer but you are not.

This isn't a secret. That's what a reserve is. If a seller tells the sales company to put a $300,000 reserve on a horse, the sales company is not allowed to sell the horse for less than $300,000. So if someone bids $200,000 and there are no other bids, the sales company has to bid $210,000. If the buyer then bids $220,000, then the sales company has to bid $230,000. They have to do this until the $300,000 reserve is met. If the sales company bids $230,000 and that is the final bid, then the horse will be listed in the results as $230,000 RNA. RNA means "reserve not attained". In a case like that, if you are a buyer you can go to the consignor after the sale and ask him how much he wants for the horse. We have bought a lot of horses like this. If we suspect that we are bidding aginst the sales company, we would stop bidding immediately and try to buy the horse after the sale.

good post and it rings with me. the sport needs a lot more regulation to make it legitimate. and i agree, Coolmore, the sheiks, they don't make the sport. the sport makes them.

Thanks, Rupe.

I take that to mean an "Agent" can be acting on behalf of the seller for one horse and as a buyer's agent on another horse. If so, I do not see how anyone with any good sense would put themselves in that position.

It's more like chicanery than outright theft.

Anyone who spends $1 million on something that he knows nothing about ...

... either has lots of millions ... or is a complete chump.

The scheming trainers and consignors don't put a gun to anyone's head ... the chumps do these things voluntarily.

If you pay $100 for something ... then see it selling for $60 everywhere else ... is the person who sold it to you a thief ... or is it your fault for not being diligent?

it is criminal, not chicanery. the owners depend on the trainer that works for them to be honest. if you hire an accountant and he plays with numbers to his advantage, or if you hire any professional and they are cheating you behind your back that is wrong. you are paying for their expertise, not for them to be a thief.

Most owners don't claim to be experts. They don't know how to pick out a horse at a yearling sale or 2 year old sale. So they hire an expert to do if for them. They don't expect the expert that they hired to rip them off and charge them double the actual price.

Yes, exactly.

"Value" in a unproven racing prospect is about the most subjective thing on the planet.

A horse that sells for a million in one sale, might be worth $75,000 in another sale.

The trust is placed with agents to see the best value and know the worth of what they are really buying, and get it for the cheapest price possible for their client in my opinion.

I could be dead wrong, as always.

At a sale, a seller doesn't have an agent. He has the consignor who is selling the horse for him. The consignor is really the agent. The consignors are usually not the agents buying horses for people at these same sales. The consignors are busy showing their consignment and trying to get all the horses in their consignment sold. They don't have time to be acting as agents for buyers. A buyer's trainer is often times his agent.

well, that explained perfectly something i had wondered about! i'd see that a horse was reserve not met, and that they then sold the horse for less than the final bid, which made no sense unless of course they only sold part of the horse.

That only depends on there being a contractual agreement which rules out such transactions.

And an accountant can't play with numbers ... if you require him to give you regular accountings. If your head is up your butt ... that's as much your fault as his.

Let's face it ... there is no known value or price for any race horse ... one man's million-dollar horse is another man's nag.

How can anyone say, "The horse was only worth $100,000 ... but I paid $200,000"? Hey ... the horse may really be worth nothing ... or millions. A yearling may never get to the races ... or he could be a champion. A broodmare may be barren ... or she may drop five SWs. A champion race horse can go to stud and be Coaltown (0 SWs from 160 foals) ... or Bold Ruler (24% SWs).

The price of anything ... horses, cars, cigarettes, or toothpaste ... is what you're willing to pay for it ... and what someone else is willing to sell it for.

If some hustlers take you for a ride ... you let your own greed and/or indifference play you for a chump.

However ... this has been a most interesting and informative thread. Thanks to all who contributed ... or almost all.

The final bid is often times not even real. There's so much funny business going on that you don't know if the bids were real or not. Sometimes there is one legitimate bidder like in the previous example I gave. Let's suppose you were the legitimate bidder in the previous example. Your final bid was $220,000. you thought that you got outbid by a real person that bid $230,000. Then you go check to see who bought the horse and you see that it says $230,000 RNA(Not Sold). At that point, you realize that you were bidding aginst the reserve. In a case like that, you can go the consignor and make him an offer. The consignor knows that there were no live bids other than you. At this point, maybe you offer him $190,000 for the horse and see if he will take it.

There is a "Sales Integrity Task Force" there as you may know, but it is bogus and not moving forward for these very reasons...nobody wants it to......very interesting that the industry doesn't ant to get right.....shows there is as much illegitimate money being made in the sales arena as legitimate business in the sales arena if you ask me.....what a damn shame and a black eye for our sport that we can't even support the groups that are trying to make things fair....

There are ALOT of cheaters in this game, boys....:mad:

That task force is the biggest joke I have ever seen.

A lot of "eye winking" going on in my opinion.

sounds kinda crappy!! ....of course you'd think most breeders wouldn't set an unrealistic reserve price, as they don't want to take horses home--not good for future business.
thanks for putting that up there, good to know--and i don't think anyone can ever know too much.