The Buy-Back Dilemma: Can Anything Be Done to Get More Select 2-Year-Olds Sold?

re: The Buy-Back Dilemma: Can Anything Be Done to Get More Select 2-Year-Olds Sold?

Ms. L — Sat, 26 Mar 2011 19:53:24 GMT

I am with 2 big outfits now and the concentration has been buying 2 yr. olds. I do agree that some horses are ruined just getting ready for the sales. You have to have trust in the people you are working with. Some of my purchases have panned out and some haven't but that can happen even in the claiming game. Several years ago when I got back into partnerships I felt that the principals kept the "best" for themselves and gave the rest of us what was left. My undoing was the purchase of a foreign horse (because I always wanted a foreign horse) that was bought by watching a video not by actually seeing the horse. Shame on me! That was the end of my involvement with that group. I love this game and enjoy being a little partner but I'm still waiting for "the big one!!!"

re: The Buy-Back Dilemma: Can Anything Be Done to Get More Select 2-Year-Olds Sold?

mick — Wed, 16 Mar 2011 01:06:21 GMT

I was at a major farm stallion prevue about 10 yrs ago. I stated talking to a farm owner who told me to come by his place after I was finished there he had a nice stallion prospect to show me. So I stopped by while I was waiting I saw a yearling that was there on the farm that a prominent KY vet was trying to straighen his leg. they where all wired up. I looked at his peigree and didn't think anything more about it. A year later I was walking thru the barns looking at 2 yr olds at feb sale in FL there he was. I couldn't believe that he was in any sale. Anyways dogwood bought him for alot of money and he broke down shortly after. What goes around comes around and the sale figures reflect the distrust and noforgiving nature of buyers who where badly burned.

re: The Buy-Back Dilemma: Can Anything Be Done to Get More Select 2-Year-Olds Sold?

Rachel — Tue, 15 Mar 2011 14:38:24 GMT

I would unlikely buy a 2 year-old in "training" at a sale nowadays. I still like the yearling sales, but if I wanted a 2 year-old I'd go looking for a Crimson Knight.

What was the buy-back rate back in the days when breeders raced their own horses?

re: The Buy-Back Dilemma: Can Anything Be Done to Get More Select 2-Year-Olds Sold?

NeilKoch — Mon, 14 Mar 2011 15:20:39 GMT

Sure two year old sales struggle, trying to pick a descent sound horse to buy anytime is tougher than it looks. And if they can't sell a colt / filly right now what is the problem? they have several months of training already on them. Load em in the gate and run them. Let the bloodstock agents, consigners put their money where their mouth is .Good horses are good horses and crap is crap and is doesn't take much more than a minute to sort any of it out.This industry suffers enough without having sales looking for loose money.

re: The Buy-Back Dilemma: Can Anything Be Done to Get More Select 2-Year-Olds Sold?

Jim Nasterman — Sun, 13 Mar 2011 16:59:54 GMT

Trebloc, the scary think is the Macho Uno you mention will now be resold to unsophisticated investors for well over seven figures in the next few weeks. Doesn't meet he can run, but what does that 50K yearling now need to do show a profit. The only winners here will be the group who bought him for 50K and resold him for 700K and the last group who sells at 700K to new people. After that the new people are likely in deep trouble. Maybe get a winners circle picture or two? but very little money.

re: The Buy-Back Dilemma: Can Anything Be Done to Get More Select 2-Year-Olds Sold?

Trebloc — Sun, 13 Mar 2011 15:27:20 GMT

Westpoint recently purchased a Macho Uno 2 yr old for $700K. The colt was a $50K yearling sale and the stallion stands for $15k in 2011. Makes you wonder.

The TOBA actually has the racing partnerships that we are writing about speak at their New Owner Seminars. Makes you wonder.

re: The Buy-Back Dilemma: Can Anything Be Done to Get More Select 2-Year-Olds Sold?

speakout — Sun, 13 Mar 2011 14:41:23 GMT

THE ANSWER, WHILE COMPLICATED, MUST START WITH CHANGING THE SALES DATES. MOVE ALL 2YO SALES BACK TO MAY-JUNE WOULD BE A START.

re: The Buy-Back Dilemma: Can Anything Be Done to Get More Select 2-Year-Olds Sold?

thederbydream — Sun, 13 Mar 2011 01:36:10 GMT

It is tough right now, we have a lot of problems in our business some are self inflicted as mentioned above. It is very tough time on a lot of our owners businesses outside of horses. This is effecting their spending, people want to stay in the game but they dont want to stretch to buy something. They are setting a price and if it doesnt land in their lap they dont fight on. THe Miami sale is filled with fantastic individuals with pedigree and those type horses cost money to buy at the yearling sales. The only thing is at the yearling sales they only have to look fast but at Miami they have to be fast, gallop out fast and vet clean to make a profit. tough game.

re: The Buy-Back Dilemma: Can Anything Be Done to Get More Select 2-Year-Olds Sold?

Pete W. — Sun, 13 Mar 2011 01:17:17 GMT

KY Fan and Patrice you are both correct. I am a stock broker and I would not be allowed to buy a stock for 31 then turn around the next day and resell it to my clients for 62. This business is so easy to cheat people and more often than not that is what happens. It is so hard to find new owners, yet more times than not when a new one gets involved he gets fleeced in some way. Many of the big name partnerships are doing the game a tremendous injustice. If an owner starts this way and then wises up that is fine, but most likely he will just get out of the sport. Going to a sale on your own is tricky, Sale companies should do everything possible to have honest people available to introduce potential buyers to vets and agents who have the buyers best interest at heart before the sale. It is difficult to do this but it would a huge first step.

re: The Buy-Back Dilemma: Can Anything Be Done to Get More Select 2-Year-Olds Sold?

Stacey — Sat, 12 Mar 2011 14:07:00 GMT

Mick,

And who made public the underhanded deals of the consignors and agents? The much maligned Jess Jackson.

I wonder why the (non-consignors and agents) people who hate him so much never seem to remember that.

re: The Buy-Back Dilemma: Can Anything Be Done to Get More Select 2-Year-Olds Sold?

Kentucky Fan — Fri, 11 Mar 2011 20:43:45 GMT

Patrice, you touch on an interesting topic, one that I have been harping on for years. If a bloodstock agent buys a horse for 'x' and then resells it for '2x' then they will be universally labeled a crook. But that mark-up seems to be a uniformly accepted norm for racing partnerships to charge. Most contend that it's part of the price for doing business, and that such upcharges are justified to tap into their 'institutional knowledge'. But, in my mind, it's a fancy way to sell a horse for exponentially more than the market deems it worth.

What's especially troubling is that many owners who buy into partnerships are new to the game. They are unaware of how prices can be manipulated at auctions, and how prices can be driven up to set a false market for a horse.

I firmly believe that the same rules and laws that resulted from the Sales Integrity Task Force - specifically dual ownership and reasonable commissions - should be at play with partnerships as well.

re: The Buy-Back Dilemma: Can Anything Be Done to Get More Select 2-Year-Olds Sold?

mick — Fri, 11 Mar 2011 13:52:34 GMT

The economy has definately taken its toll on the 2 yr old sales. One of the major reasons for the decline, is the trust amd confidence of the consignore themselves. Yrs of greed,prearrainged deals and the fleecing of many top owners have taken its toll. Ocala horseman got rich in the late 90's early 2000's

There's a old saying once a dummy twice a fool. The consignors and agents never thought about the future and what they where doing would never be able to be undone.

Trust is the most important part of any sale. If the buyer cannot trust the seller, its a very hard to get a deal done. Unfortunate as it is, they sealed there own fate.

re: The Buy-Back Dilemma: Can Anything Be Done to Get More Select 2-Year-Olds Sold?

Phil — Fri, 11 Mar 2011 01:13:29 GMT

The increased buy-back rate is a simple case of the sellers having decided that they'd rather keep the horse than give it away at a price below their acceptance level. In a way, the increased rate (this year) shows that there has been a re-trenchment in the breeding industry -- current sellers increasingly have the financial legs to race the 2-year olds themselves. The situation a few years ago, had breeders letting everything go - many were on the verge of bankruptcy or were just getting out of the business. I see this increased buy-back rate as a sign that the suppliers have dwindled in numbers, but those that remain in the game are the ones that had the deeper pockets to begin with. That's not to say that some of those are sadly mistaken on the true "value" of their two-year olds, and they will soon also be out of the game.

re: The Buy-Back Dilemma: Can Anything Be Done to Get More Select 2-Year-Olds Sold?

Patrice Miller — Thu, 10 Mar 2011 20:56:34 GMT

The horse business is a tough business for owners to make money. The partnership route allows owners to get into the game and learn the in's and out's. Problem with that is most parterships are bordering on insanity in their mark ups. A Westpoint type group who buys a horse for 500K then resells it for 1,000,000 the next week is not going to keep owners in the game. There needs to be some way for buyers to get involved and have a decent chance to get a return on their money. The fact that many owners who have bought from 2 year old training sales in the past have been through so many injuries they have stopped going to sales. It is a tough situation, if there was an easy answer someone would have figured it out already.

re: The Buy-Back Dilemma: Can Anything Be Done to Get More Select 2-Year-Olds Sold?

MikeM — Thu, 10 Mar 2011 12:11:51 GMT

It's very simple. The majority of buyers have had very bad results buying 2yos at the sales. A trainer once told me that it is the odd 2yo that can stand up to the training and sales prep for these sales. After three very bad experiences with 2yo sales graduates I will never ever buy another.They are over priced and most of them are ruined either physically or mentally at these sales.

re: The Buy-Back Dilemma: Can Anything Be Done to Get More Select 2-Year-Olds Sold?

sceptre — Thu, 10 Mar 2011 01:48:39 GMT

Elizabeth-

Fact is, the % of SWs (and GSWs)/foals has remained essentially unchanged for many years. Yes, those %s for the "big guns" has decreased, but this should have little to no effect on 2 yr. old auction prices-and the numbers offered at boutique 2 yr. old auctions has also been fairly constant. But, as you imply, with the level of scrutiny today, far more potentially higher priced offerings are eliminated from consideration. This, coupled with lesser numbers of high-end buyers basically tells the tale.

re: The Buy-Back Dilemma: Can Anything Be Done to Get More Select 2-Year-Olds Sold?

E A Blythe — Wed, 09 Mar 2011 22:09:56 GMT

Whatever type of horse being sold, sadly today there is no intrinsic value. With the Big Book era, even a good sire may only get 5 % stakes winners from foals. Therefore, 95 % of them won't be high class stock. We are producing "Industrial Diamonds" on the whole, with too few "Tiffany Diamonds". The sale prices reflect the ever-increasing ability of buyers through vetting, conformation analysis, heart scans, stride analysis, "nicking", breeze times/perceptions and so on, to congregate on the few that meet their criteria. The horses often don't live up to those expectations/prices, with future champions being overlooked because of perceived flaws. In some 34 years in the business, today there is no floor, no matter what kind of pedigree the horse has. Up until this recession, there was still some residual value for offspring of popular/good sires. Therefore, the stud fees should probably reflect the value of 95 % of a sire's foal crop, not the 5 % of the good ones. If your mare has one of the "Tiffany" quality foals, pay more. If it is an "Industrial" quality, pay a base fee.

re: The Buy-Back Dilemma: Can Anything Be Done to Get More Select 2-Year-Olds Sold?

jeffrey — Wed, 09 Mar 2011 20:53:26 GMT

There are many reasons for the market downturn. The economic crisis probably plays the biggest part. However the breeders who bought the mares of these foals payed the price of the rate before the economic problems. What they might have in the horse has nothing to do with what theyre worth. The select sales are hit hardest because people are finally beginning to notice that there is a much higher number of horses to sell for half a million then there are horses to make half a million. It doesnt make sense to give $500,000 for a chance to make that $500,000 back. The Green Monkey was a 16 million dollar unproven 2yr old. Rachel Alexandra was bought for $10,000,000 after winning the ky. oaks by 19. Did they actually expect The Green Monkey to be better then her? It doesnt make sense to pay that much for a 2yr old. People need to realize that a horse is only worth what you can get for it not what you paid for it. The consignors need to expect todays prices not 5 yrs ago's prices. The lowering of the stud fees should be taking affect this year, people dont have near the initial payment they had previously. MY 2 CENTS OF KNOWLEDGE

re: The Buy-Back Dilemma: Can Anything Be Done to Get More Select 2-Year-Olds Sold?

nokoram sundar — Wed, 09 Mar 2011 19:37:58 GMT

this problem is the sellers problem i have for 40 yrs believe that the best buy is a florida bred horse i buy very cheap horses but i will not pay more than 10 times a stud fee for no horse and tha came from mr. john geer foolish pleasure honest pleasure can anyone explain why would someone take back a horse $750.000 that is greed breeders and sellers get use to this situtation because it would never have $16,000.000 or the million dollar unrace two year olds good luck

re: The Buy-Back Dilemma: Can Anything Be Done to Get More Select 2-Year-Olds Sold?

watcher — Wed, 09 Mar 2011 16:59:20 GMT

Owners have learned that the superfast "breezes" these youngsters are forced to endure are not predictive of racetrack success. It's clear as mountain water that the demand is shifting towards proven, sounder racehorses.

If the sales companies and consignors were to practice common business sense they would adapt their approaches to help buyers actually MAKE money instead of flushing it.

Someday, someone in the industry will emulate the Australians' 'Magic Millions' formula in America. But rather than focusing on short-lived two-year-old racing careers, I hope such a program would be conducive to selling horses primed to run farther and last longer.

re: The Buy-Back Dilemma: Can Anything Be Done to Get More Select 2-Year-Olds Sold?

frankie conditions — Mon, 07 Mar 2011 22:50:03 GMT

The "sales" , like much of racing, are steeped in tradition. That's not all bad, but how about a little creativity ? Buying babies is a highly speculative and risky proposition. Has anyone noticed that the sales of million dollar homes, yachts, and other "luxurires" which owning racehorses is, are down significantly ? the base of buyers just isn't there and its not going to be for a long long time. There are only so many sheiks, Mike Repole's and Moss', team valor, west Point, etc. . Now I bet Mike Repole could help develop a business plan to help get more horses at the top end sold ! He doens't have the lifetime biases of those stuck in "this is the way we have always done it" mindset that is the breeding, selling, racing elite. How about "recruiting" future owners. How about starting a "advisory" team of knowledgeable poeple that are compensated from a small percentage of sale proceeds. This servcie could be free and unbiased for potetnial owners. If someone WANTED to buy and own racehorses how do they get started ? Who can they trust ? How about if trainers could make themselves available to meet these potential owners where they might market their services ? They might even develop their own plans ie; if you spned $ 200K or more on a 2 year old and let me train it I'll do a deal where the day rate is 50% of retail, but I get 15 or even 20% of the earnings. See more owners and more $ spent ensures everyones future. I clearly get that trainers work 10+ hours/day often 7 days /week with little time for family let alone vacations. The fact of the matter is without buyers there's little sense in building houses, or yachts or breeding thoroughbred's. So we can all say "it is what it is" or we can look for solutions which includes everyone doing things a little differently. insanity has been defined as doign things the way you have always done them and expect different results. The world has changed (dramatically) but for the most part breedign, selling and racing is stuck in the past. Where would racing be without lsots/gaming subsidies ? How many more breeders, trainers, jockeys, bloodstock and sales agents, etc. would be doign something else ? Th clock is ticking !