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  #21  
Old 11-12-2006, 01:19 AM
Rupert Pupkin Rupert Pupkin is offline
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Quote:
Originally Posted by Merlinsky
Ok question I hear about "insurance premiums" in general but really how much can we guestimate that a horse like Bernardini or Henny Hughes costs in payments? What's a monthly look like?
Let's figure that Bernardini is worth about $60 million. The insurance premium is usually about 5% of the horse's value. So if Bernardini is worth $60 million and they want to insure him for $60 million that means it would cost about $3 million a year to insure Bernardini.
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  #22  
Old 11-12-2006, 10:29 AM
ELA ELA is offline
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The insurance premium is one aspect -- the other is capacity. I am not saying that you couldn't get $60m of coverage, but there has been drastic changes in the insurance and more importantly reinsurance marketplace.

I don't count other people's money, literally speaking, and there is an irony there considering I am in the financial business and exclusively work with wealthy people, high-net-worth/income, etc. However, if you have a horse that you would like to insure for $60m and the cost to insure him is $3m -- that might be a true "out of pocket" as the horse may not have earned $3m. I am not defending those who own the horses or critisizing them for that matter. You want to play you have to pay. That's the price of admission.

There is an economic side to this. People make financial decisions for two reasons -- economics and emotions.

Eric
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  #23  
Old 11-12-2006, 11:29 PM
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But really how many gamblers have you seen boycott the races since they announced Bernardinis retirement ? We arent talking about small fries we are talking about big horses , and I was just putting one aspect out there, of course we know the sheiks have plenty of money and the insurance rates are nothing to them. But they are to some people, so owners are supposed to just forego the risk and keep forking out the dough and hope when its all over they have something left.
I would purpose that no good buisnessman would bock at a turn around in their investment, one that could actually provide future money to keep buying breeding and racing horses for a very long time.
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Last edited by Kasept : 11-13-2006 at 08:41 PM.
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  #24  
Old 11-13-2006, 03:26 AM
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Quote:
Originally Posted by BellamyRd.
I meant the owners of the animals the public wants to see run
As a fellow "small timer", I have to thank you for pointing out that the public does not want to see any of my horses run.

Guess I should go ahead and retire them now.
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  #25  
Old 11-13-2006, 08:49 AM
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Ill buy them bigsmc, what do you have Dont retire them
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  #26  
Old 11-13-2006, 08:59 AM
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Got it. Even so, I am not sure what % of high-profile horses are owned by royalty, the super-wealthy, etc. nor in my mind is there a direct correlation. Like I said, I am not counting other people's money, nor am I judging. However, if the next super-horse comes along and is owned by a working class class guy who got lucky, common sense or a knee jerk reaction would be that they take the money and run. Whether it's common sense, diversification, risk, who knows.


However, if that same horse is owned by a sheik, a prince, or a king, or someone of incredible wealth -- wouldn't the same thinking dictate that "they didn't need the money" or something along those lines. Maybe there is a "quit while you are on top" mentality. I don't know.

If Empire Maker was sound, would he have raced as a four year old? Who knows. I think many can make a very convincible case either way.

Eric

Last edited by Kasept : 11-13-2006 at 08:42 PM.
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  #27  
Old 11-13-2006, 09:20 AM
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Thank you Andy.

Personally, I think there is a much bigger issue going on here. This is not an accusation or stereotype so just bear with me here. Often, the bettors feel that their dollars "drive the boat" so to speak. The owners feel they are responsible for making the game happen and putting on the show. I've heard trainers say that the jocks shouldn't get the same % as the trainer as the trainer is the one who does the real day to day with the horse. The jockeys want health insurance and rightfully so. The big owner wants higher purses for the big stakes, bonus money, syndications with real cash, and so on. The small owner wants to be able to pay the jock fee when his horse finishes up the track and wants higher purses for $5k claimers (by the way, I have one of these racing today so don't think I am preaching to a choir that I am unfamiliar with, LOL). The tracks want more simulcasting revenue, VLT's, better tax deals and legislation, and more of the ever shrinking pie.

Anyway, do all of us see a theme here? Does everyone see what's going on in the background. Think about it. Everybody wants something, most often for themselves. It's the "what's in it for me" mentality. I've seen it go on for many years. Now I am not critisizing any one of these factions -- but they are factionalized.

I have said it before -- there needs to be a massive paradigm shift in the mindset of all of these parties. They need to be brought together, to work together on the sport and on the business.

Anyway, that's enough transformation talk for now, LOL. Thanks again Andy.

Eric

Last edited by ELA : 11-13-2006 at 11:08 PM.
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  #28  
Old 11-13-2006, 09:24 AM
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Quote:
Originally Posted by The Bid
Ill buy them bigsmc, what do you have Dont retire them
He has the the 2008 Tampa Bay Derby winna......

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  #29  
Old 11-13-2006, 09:27 AM
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Quote:
Originally Posted by ELA
Thank you Andy.

I have said it before -- there needs to be a massive paradigm shift in the mindset of all of these parties. They need to be brought together, to work together on the sport and on the business.
Yep, very true, the exact reason why this sport goes nowhere in the public. It could easily be a top 5 sport, never as big as Football/Baseball/Soccer/College Basketball but could easily get right under that as far as public following........
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  #30  
Old 11-13-2006, 09:45 AM
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Quote:
Originally Posted by Rupert Pupkin
Let's figure that Bernardini is worth about $60 million. The insurance premium is usually about 5% of the horse's value. So if Bernardini is worth $60 million and they want to insure him for $60 million that means it would cost about $3 million a year to insure Bernardini.
I understand that profitability can easily revolve around a 5% expense. But still...I can't help thinking that it just might be okay to end up with $57 million for Bernardini rather than $60 million, and have the pleasure of watching him run as a 4-yr-old. (and that assumes that he would only break even on costs/income while running).

I understand there are other risks, too. Mainly, that a horse like Bernardini may not live up to expectations as a 4-yr-old, thus reducing that $60 million estimate of worth.

Perhaps that is the main reason horses are rushed to stud--fear that they are not as good as the market currently values them.

--Dunbar
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  #31  
Old 11-13-2006, 09:57 AM
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Quote:
Originally Posted by Dunbar
I understand that profitability can easily revolve around a 5% expense. But still...I can't help thinking that it just might be okay to end up with $57 million for Bernardini rather than $60 million, and have the pleasure of watching him run as a 4-yr-old. (and that assumes that he would only break even on costs/income while running).

I understand there are other risks, too. Mainly, that a horse like Bernardini may not live up to expectations as a 4-yr-old, thus reducing that $60 million estimate of worth.

Perhaps that is the main reason horses are rushed to stud--fear that they are not as good as the market currently values them.

--Dunbar
You know... I think that's probably the main reason in most cases, but I don't think that's the case with Bernardini. I think that his chances for improvement as a 4 year old were probably very good, but I think that they retired him early due to the risks associated with him running a 4 year old campaign. They've got a better chance of getting a classic winner out of Bernie than they do Discreet Cat or Invasor, so why would they risk it by running him another year? I dunno... I wish we could have seen him run another season. It's typical that I finally gain respect for the colt after his BCC loss and now he won't be running anymore. DOH!
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  #32  
Old 11-13-2006, 09:58 AM
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Quote:
Originally Posted by Dunbar
I understand that profitability can easily revolve around a 5% expense. But still...I can't help thinking that it just might be okay to end up with $57 million for Bernardini rather than $60 million, and have the pleasure of watching him run as a 4-yr-old. (and that assumes that he would only break even on costs/income while running).

I understand there are other risks, too. Mainly, that a horse like Bernardini may not live up to expectations as a 4-yr-old, thus reducing that $60 million estimate of worth.

Perhaps that is the main reason horses are rushed to stud--fear that they are not as good as the market currently values them.

--Dunbar

I agree with some of what you said but there is another issue involved. Lets take a look at Flower Alley, a horse whose BCC figure wise and visually was every bit as good or better than Bern's BCC.
The owner of FA is a billionaire, and although he could easily have gone to stud at 50 g's a pop at the end of last year(grade one 1 1/4 mile winning son of superhot Distorted Humor who also placed against HOY in the biggest race we have) but he chose to race on with him.
FA didn't go on at age 4(to say the very least) and who can say why? In any case now he goes to stud at 25 g's and was the subject of ridicule.
When you send a horse to stud "leaving them wanting more" his image forever remains intact. Bringing them back is risky not only in terms of cash, but in how it hurts to see your horse being the subject of jokes and ridicule.
Had Funny Cide had nuts, he would have gone to stud at the end of his 3YO year and be remembered as a duel classic winner. Now hes the subject of endless jokes and ridicule.
People who own these horses take tremendous pride in them, huge pride. It extends even further than that, breeders, trainers, agents, the people who raised helped raise a horse on the farm(I believe we have a Henny Hughes raiser on the board) all take tremendous pride in watching a horse that they had a part in accomplish something at the highest level. It hurts tremendously to see people taking pot shots at the horse even more than it ever hurts financially. Its a tough call for an owner to bring a horse back for another year, especially if hes had any problems that may or may not be 100% fixable. The loss of cash hurts, but hearing people talk about your horse in a negative way hurts far more. I've listened to owners in the situation of having a horse regress after being top notch at one time, and they are more hurt with stung pride than they are anything else.
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  #33  
Old 11-13-2006, 10:01 AM
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Quote:
Originally Posted by oracle80
I agree with some of what you said but there is another issue involved. Lets take a look at Flower Alley, a horse whose BCC figure wise and visually was every bit as good or better than Bern's BCC.
The owner of FA is a billionaire, and although he could easily have gone to stud at 50 g's a pop at the end of last year(grade one 1 1/4 mile winning son of superhot Distorted Humor who also placed against HOY in the biggest race we have) but he chose to race on with him.
FA didn't go on at age 4(to say the very least) and who can say why? In any case now he goes to stud at 25 g's and was the subject of ridicule.
When you send a horse to stud "leaving them wanting more" his image forever remains intact. Bringing them back is risky not only in terms of cash, but in how it hurts to see your horse being the subject of jokes and ridicule.
Had Funny Cide had nuts, he would have gone to stud at the end of his 3YO year and be remembered as a duel classic winner. Now hes the subject of endless jokes and ridicule.
People who own these horses take tremendous pride in them, huge pride. It extends even further than that, breeders, trainers, agents, the people who raised helped raise a horse on the farm(I believe we have a Henny Hughes raiser on the board) all take tremendous pride in watching a horse that they had a part in accomplish something at the highest level. It hurts tremendously to see people taking pot shots at the horse even more than it ever hurts financially. Its a tough call for an owner to bring a horse back for another year, especially if hes had any problems that may or may not be 100% fixable. The loss of cash hurts, but hearing people talk about your horse in a negative way hurts far more. I've listened to owners in the situation of having a horse regress after being top notch at one time, and they are more hurt with stung pride than they are anything else.
Very well said, Mike.
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  #34  
Old 11-13-2006, 10:01 AM
ELA ELA is offline
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I understand your point, and in this case while it might be true in the abstract -- it doesn't make it so. What I mean is that obviously the owner(s) of Bernardini can afford do to whatever he/they choose. The ironic part is that he/they did! Do you think the horse was retired so that they could see an ROI? Remember, nobody is writing them a check for $60m. Anyway, they probably spent 10 times that amount over the last 10 to 15 years worldwide on their operation. It is not an ROI issue, at least I don't think so. Does anyone know how many shares in Empire Maker were sold? Will they be selling shares in Bernardini?

As much as it is human nature to do so, I do not think the public, fans, bettors, other owners, etc. can have an expectation that (other) owners will do as they would or the so called "do the right thing".

If we do, then we will consistantly be disappointed. Period. Who is to say what "the right thing" is? It sounds far to judgemental and self-imposing to me. Did I want to see Bernardini run as a four year old? Of course I did. I am a fan first, and an owner second. But they retired him -- so be it. We have every right to be disappointed; but to go further and critisize, personally, I don't see it.

Eric
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  #35  
Old 11-13-2006, 10:11 AM
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Quote:
Originally Posted by oracle80
I agree with some of what you said but there is another issue involved. Lets take a look at Flower Alley, a horse whose BCC figure wise and visually was every bit as good or better than Bern's BCC.
The owner of FA is a billionaire, and although he could easily have gone to stud at 50 g's a pop at the end of last year(grade one 1 1/4 mile winning son of superhot Distorted Humor who also placed against HOY in the biggest race we have) but he chose to race on with him.
FA didn't go on at age 4(to say the very least) and who can say why? In any case now he goes to stud at 25 g's and was the subject of ridicule.
When you send a horse to stud "leaving them wanting more" his image forever remains intact. Bringing them back is risky not only in terms of cash, but in how it hurts to see your horse being the subject of jokes and ridicule.
Had Funny Cide had nuts, he would have gone to stud at the end of his 3YO year and be remembered as a duel classic winner. Now hes the subject of endless jokes and ridicule.
People who own these horses take tremendous pride in them, huge pride. It extends even further than that, breeders, trainers, agents, the people who raised helped raise a horse on the farm(I believe we have a Henny Hughes raiser on the board) all take tremendous pride in watching a horse that they had a part in accomplish something at the highest level. It hurts tremendously to see people taking pot shots at the horse even more than it ever hurts financially. Its a tough call for an owner to bring a horse back for another year, especially if hes had any problems that may or may not be 100% fixable. The loss of cash hurts, but hearing people talk about your horse in a negative way hurts far more. I've listened to owners in the situation of having a horse regress after being top notch at one time, and they are more hurt with stung pride than they are anything else.
I agree with what you've said here...and the chance of a horse 'falling on his face' when they return the next year is a real possibility...but equally frustrating is watching a horse that you feel could be truly great throw in a clunker of a race and then retire the next day...talkin bout Henny of course.
And it's true that any person who had any hand in raising or training a horse then feels a measure of personal satisfaction and pride when they run well...but not just at the highest level---I was more excited yesterday when a filly that I bottle fed ran 2nd in a MSW for 3YO. It extends to every level of the sport.
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  #36  
Old 11-13-2006, 10:11 AM
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Quote:
Originally Posted by Scav
Yep, very true, the exact reason why this sport goes nowhere in the public. It could easily be a top 5 sport, never as big as Football/Baseball/Soccer/College Basketball but could easily get right under that as far as public following........
Racing is not as big as soccer in this country? And to think I missed the MLS cup or whatever its called.
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  #37  
Old 11-13-2006, 10:12 AM
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Quote:
Originally Posted by Kasept
An FYI to all..

Anyone who is involved in the game at ANY level, inside the oval or as a player, that is sharing their knowledge and experience with everyone else, is welcome and appreciated.

Steve
Steve, please suspend me for a day so I can get some work done.

Last edited by Kasept : 11-13-2006 at 08:45 PM.
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  #38  
Old 11-13-2006, 10:13 AM
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Steve, please suspend me for a day so I can get some work done.
be careful what you wish for dear...I can do it too...
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  #39  
Old 11-13-2006, 10:15 AM
ELA ELA is offline
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I think oracle80 brings up several points -- first, the "wanting for more" aspect is very true. The "intrinsic" aspect of a stallion, or the aura of the horse, plays out here. The image, along with maximizing value is key, but I would say that many people feel it is more key for someone who "needs" the money. Again, who knows.

Having a stallion peak in value can make one become very vulnerable. Often the stallion has way more downside then up, and often has only downside. Professionally, I work with athletes, entertainers, and high net worth families and individuals. I hate to stereotype but often the more zeros on your balance sheet, the more "ego" can potentially come into play, the more "image" can come into play, etc. I mean how many homes can you own? How big can they be? It is more than relative as you move up the wealth scale. Look at a generic person worth $50m and then the generic someone worth $1b. Sure, there are exceptions and perhaps no rules as well.

I was in the paddock recently when one of our horses was racing. I knew the horse would run but just wasn't sure how well (layoff). Anyway, we are second/third choice and there's a 2/5 or 3/5 shot in the stall next to us. The jock riding the heavy favorite comes out and says to the trainer "so, what do we look like here, is there anyone here I need to worry about" or something along those lines. The trainer responds "just point him in the right direction, enjoy the ride, and I'll see you in couple of minutes and get ready to get your picture taken"

Anyway, of course there is pride and ego. I immediately wanted to finish ahead of that horse, even if it was second to last. It's human nature. Now I would never change strategy or make it a personal vendetta and with me that thinking lasts a few seconds. But we need to think about things sometimes with a different perspective.

Eric
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  #40  
Old 11-13-2006, 10:17 AM
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Quote:
Originally Posted by paisjpq
I agree with what you've said here...and the chance of a horse 'falling on his face' when they return the next year is a real possibility...but equally frustrating is watching a horse that you feel could be truly great throw in a clunker of a race and then retire the next day...talkin bout Henny of course.
And it's true that any person who had any hand in raising or training a horse then feels a measure of personal satisfaction and pride when they run well...but not just at the highest level---I was more excited yesterday when a filly that I bottle fed ran 2nd in a MSW for 3YO. It extends to every level of the sport.
Anyone with even half of a pea brain will not judge Henny based on the BC Sprint. Its quite obvious that something was awry, and that race was a tossout.
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