horse owners

[paisjpq]

Originally Posted by ELA

BTW, here is an interesting question -- so the owner(s) of Bernardini can easily afford this type of insurance premium from "other wealth" and perhaps as such, the fans feel a certain way (of course for other reasons as well).

What if Bernardini or a similar type of horse worth the same money was owned by a working class guy, or someone who did not have wealth per se. If that person did not have other assets or couldn't get a farm to offer up enough real cash, etc., and they could not "afford" the premium -- would people feel differently? What about if there was an estate tax/liquidity issue (ie: Joe Robbie and the Miami Dolphins)?

Any thoughts? Thank you.

Eric

there is no question in my mind that if this horse was owned by some blue-collar types and they decided that they couldn't afford to take the risk of racing the horse next year the backlash would not be nearly as severe.

[paisjpq]

Originally Posted by DaHoss9698

Yeah, I definitely think this is the case. I think there are a few factors here. Number one, after Barbaro, fans needed something, anything to get their minds off of what happened in the Preakness. Well here comes Bernardini, with the looks, pedigree, and easy win after easy win. Some thought he was the next coming. And fans want to see a good one run, they could care less about anything that goes on in the business side. To be retired, assuming he's healthy after a very good, but not great 3 year old campaign is kind of premature. Number two is, and many will not admit it, and I'm not saying anyone here, because with the exception of maybe one person, I haven't heard any of this crap, but the fact the owners are Arabs bothers people. Lastly, the fact that the Shieks are seemingly buying everything in site doesn't sit well with people. It's one thing to be like the Phipps, and breed and own your champions, but it's another thing to just buy up most of the prized stock, and race it a few times. I definitely think it's a pissing match between Godolphin and Coolmore, because Coolmore has been much more successful in the breeding shed.

IMO the fact that the Boys from Dubai are buying everything they can get there hands on is not good @ all...and it has nothing to do with where they are from...right now they are the homerun every breeder wants to hit when they are selling horses...they lay out a fortune @ auction and are the underbidder on a great many more, that they don't feel they 'have to have' for one reason or another...
So right now they are buying the best broodmares the best studs and the best racehorses...to go along with all of their yearling puchases....Sooner or later they will have what they need and there is no doubt in my mind that they will stop participating in the buying and selling because they will have what they need on the farm already...Look @ Juddmonte. They don't buy and sell because they have one of the best groups of brrodmares in Kentucky.
If they Sheik's go this route (and it may take another 10 years 15 years who knows)...then the breeding/auction market suffers and the trickle down affect could be severe. JMO

[Cannon Shell]

Originally Posted by DaHoss9698

I agree, what they are doing at sales and such isn't good in the long run. It's lining some pockets now, but what happens when they get everyhting they want. I think you are right, it'll be kind of like Juddmonte. The point I was trying to make about saying where they are from is honestly, and again I'm not saying anyone on here, with the exception of one person, I think if these horses were owned by someone like Bill gates, or even someone like Mary lou Whitney, there wouldn't be such an outcry about it. And trust me, I for one am totally against the premature retiring. I understand where the owners are coming from, but as a racing fan, I like to see racing, plain and simple.

I dont think they'll ever get everything they want. I think the way they work against the good of both racing and breeding is the unrealistic surge in bloodstock prices that is going to crash eventually. All markets eventually bottom out but by the same token they all have a peak and we have to be getting close. A lot of the suppliers of stock (breeders) do this as a business and as such borrow money for farm upkeep, mare acquisition, insurance, stud fees, etc. Because they prices of the top level prospects keeps going up and with it stud fees and mare prices, they must borrow more to continue to produce the same product. Therefore putting themselves further in debt. The odds that you will sell a huge homerun horse are still reasonably the same but the urgency is greater, especially with interest rates climbing. Also dont forget that many of the non-arab, mega-purchases are also rarely without some kind of "extra" cost right off the top.
I have clients that sold a horse for $750k a few years ago. After they had paid expenses, consignor fees, sales company %, and a cut to the agent who bought the horse thier take was down to $400k. Considering that the stud fee was 125K and the mare cost them 220K, the amount of "profit" was not all that much. And to the outsider it looked like a home run.
As stud fees rise, it is harder to make a profit on horses. The few farms that are big enough to stand many high dollar stallions still do well but the medium sized farms with the hard knocking stallions that cant afford to go after the bigtime stallions are going to suffer as their expenses keep rising but thier market(the middle to lower) is stagnant.
The reason that this whole economic situation affects racing is that because the "end users" are forced to spend more to purchase horses. With purses being flat with the exception of slot tracks and regular expenses rising, the odds that an owner can make any money decrease therefore causing owners to buy fewer horses which ultimately hurts the middle market more than the high end where the expenses are less important. The bloodstock market CANNOT go up forever and when it slips due to industry problems, global problems (terrorism/ another 9/11) or the fact that the democrats in control of Congress are far less likely to pass economic relief to the "rich" through tax cuts or incentives, the flood of farms and trainers going out of business will be ugly.
Now this is not all due to the Arabs spending habits but they are the big carrot dangling out in front of this whole industry.

[Linny]

Cannon Shell and ELA make great points. It's simple for fans and bettors to say "they are rich...they dont need the money." Because a wealthy owner has income from non racing sources does not mean that he or she should run the racing enterprise like a charity.
Darley is a business. I have no idea how much Sheik Mo has spent on it this year but lets assume that it's $100M. Add up his purchases, his expenses in running several farms (everything from grass seed to matching jackets for grooms + insurance and related business expanses/salaries) the fees charged by trainers and the trainer and rider fees for winning performances, insurance for his stock, global shipping, medical care and farriery... It could easily exceed $100M. That said, why begrudge the man for wanting to recoup some of those expenses in stud fees from one of the hottest young properties in the stallion market? Everyone loves Sheikh Mo when he's buying something and hates him when he's selling. Why?
Just because owners like Sheikh Mo and others seem to have a bottomless pit of money doesn't mean that they should operate their business as such.

I would like to see horses race more often. I'd like to see top 3yo's stay in training at 4. I'd like to see more matchup between top class runners all season long. I'd like a gazillion dollars and a new Mercedes too...

[Cajungator26]

Originally Posted by Linny

Cannon Shell and ELA make great points. It's simple for fans and bettors to say "they are rich...they dont need the money." Because a wealthy owner has income from non racing sources does not mean that he or she should run the racing enterprise like a charity.
Darley is a business. I have no idea how much Sheik Mo has spent on it this year but lets assume that it's $100M. Add up his purchases, his expenses in running several farms (everything from grass seed to matching jackets for grooms + insurance and related business expanses/salaries) the fees charged by trainers and the trainer and rider fees for winning performances, insurance for his stock, global shipping, medical care and farriery... It could easily exceed $100M. That said, why begrudge the man for wanting to recoup some of those expenses in stud fees from one of the hottest young properties in the stallion market? Everyone loves Sheikh Mo when he's buying something and hates him when he's selling. Why?
Just because owners like Sheikh Mo and others seem to have a bottomless pit of money doesn't mean that they should operate their business as such.

I would like to see horses race more often. I'd like to see top 3yo's stay in training at 4. I'd like to see more matchup between top class runners all season long. I'd like a gazillion dollars and a new Mercedes too...

I agree, Linny. I'll take a new Mercedes as well!