Do You Remember? It Was Tough to Sell Horses Before the Recession

re: Do You Remember? It Was Tough to Sell Horses Before the Recession

Linda/ID — Wed, 21 Oct 2009 15:33:21 GMT

I am someone who has bred, raised and trained my own horses for many years. I agree that bloodstock agents and non-present/undereducated owners have hurt the horse market. I also feel the explosion in pinhooking in the 90's had a very negative effect, emphasizing profit over everything else.

However, it wasn't just "seeing how much other people made selling horses" that caused the shift in racers moving to selling. Two other factors had a major influence.

First, changes in the tax laws in the 80's and 90's meant that one could no longer call one's horse operation a business with out proving cash flow. If you couldn't show large amounts of money moving in as well as out of your breeding operation, and eventually report a significant profit, you were considered a hobbyist, no matter how many horses you bred, raised and raced.

Anyone in the business knows how difficult it is to make a profit breeding and racing your homebreds, even in a good economy. As the cost of training went up with the costs of feed, vet work, shoeing, workman's comp, etc., it became even more difficult. In addition, if you are a new operation, with a pasture full of babies, it will be years before you even have a chance to see any money in the plus column. So you are looking at a constant flow out, no flow in, and an accountant calling you and saying, "sell some of these, you need to show you are doing something besides playing with horses."

Second, the aforementioned rise in the cost of training has made it all the more difficult to rely solely on racing your horses. None of us gets into this to get rich, but you have to be able to pay the bills. By the time you have bred and raised a horse for two or three years, you are into them for thousands of dollars, even where costs are relatively low. If you run where the cost of training is low, the purses are low. If you run where the purses are good, the cost is high. Either way, your horse has to win several times to just break even. Running second is nice, but it doesn't pay the bills.

My point is it wasn't just greed that caused this shift (which I fully agree has been detrimental to racing and selling both), and a change in mindset will not fix it.

re: Do You Remember? It Was Tough to Sell Horses Before the Recession

Rachel/NH — Tue, 20 Oct 2009 19:41:30 GMT

Instead of educating the owner...I think I saw in your article it was the TRAINER that the Bloodstock agent was worried about if he bought a smallish horse...now THAT's scary...

re: Do You Remember? It Was Tough to Sell Horses Before the Recession

JAJ — Sun, 18 Oct 2009 23:28:35 GMT

My trainer told me the "safest" yearling purchase (from the blood stock agent or trainer's perspective) is to buy one from a stallion's first crop. Then if ithe yearling fails at the track they can blame it on the stallion. Few stallions actually make it, so the trainer or blood stock agent has a built in excuse for the failure of the yearling they advised the owner to buy.

re: Do You Remember? It Was Tough to Sell Horses Before the Recession

aspradling — Sun, 18 Oct 2009 22:00:20 GMT

Karin: "As far as I am concerned, the only ones making money in this business is the vets at the track--

And that's the truth"

Unfortunately, Equine vets make at least 30% less, if not 50% less than other animal vets fresh out of school. Their school loan depts are insane. On top of that difference, horses are larger and require more dosage/drugs and that is expensive and a huge cost in of itself.

The comment that Vets are making money is true in the top, but the top is about 5% at most, of all equine vets.

Vets are not making extra money, they are making enough to live on.

re: Do You Remember? It Was Tough to Sell Horses Before the Recession

Maury E. — Sun, 18 Oct 2009 02:52:03 GMT

More owners will come about the day racetracks figure out that pricing of betting is too high, and they do something about it.

Bettors last longer, some become potential owners. Bettors last longer, they are more likely to expose friends and family to the race track.

An owner takes out friends to the track, the friends may bet. If they get discouraged, they don't bother coming back.

It is a numbers game, and the fact that the bettors are dropping off means that owners will drop off too.

To grow the game, takeout needs to be drastically reduced. More bettors, more owners.

re: Do You Remember? It Was Tough to Sell Horses Before the Recession

MichaelM. — Sat, 17 Oct 2009 16:44:31 GMT

Raising the takeout is the dumbest thing you can do.

I wonder why NY and all of Canada thrives on payouts paid to the nickel ?

The more money you put back in the bettors hands the more they bet.

re: Do You Remember? It Was Tough to Sell Horses Before the Recession

Laura R — Sat, 17 Oct 2009 14:55:13 GMT

I’ve read both in your article and Karen’s comment that the owners need to be educated. Other than the TOBA and the TOC (Thoroughbred Owners of California) new ownership seminars, I’m not aware of many educational classes for new owners. If I’m mistaken and there are plenty of options out there for potential owners, then maybe the information needs to be marketed more aggressively (or I need to look harder).

The majority of people interested in investing in racing, or owners that are currently in the industry, are guided by syndicates, bloodstock advisors and trainers. Like in any industry, some of the bloodstock advisors and trainers are reliable, others, not so much, so seminars by ownership associations are essential to anyone contemplating the purchase of a racehorse.

Responsible bloodstock advisors and trainers need to take a more active role with their new and existing clients and enlighten them about the investment (horses). The only way to do this is by teaching the owner about basic horse conformation, temperament, pedigree and by giving the owner an honest, truthful assessment of the horse’s abilities. How many times have we seen horses running way over their class level because owners are in their own little fantasy world and demand the horses run in stakes races just so someone can be a big shot and show off?

The whole atmosphere of being criticized and at fault if the horse doesn’t perform to expectations is ludicrous if the horse is given every chance to succeed. By that, I mean criticism shouldn’t happen if the owner is properly educated. There are some owners who don’t want to perform due diligence on their investment. They are foolish and/or naïve and ironically, are the ones who complain loudest if things don’t go their way. Any reasonable bloodstock agent or trainer should run in the opposite direction when spotting these types of people. Sometimes, the money earned just isn’t worth the hassle.

re: Do You Remember? It Was Tough to Sell Horses Before the Recession

Glenn — Sat, 17 Oct 2009 13:32:24 GMT

Race horses come in all shapes and sizes but sales horses only come in one shape and size.

re: Do You Remember? It Was Tough to Sell Horses Before the Recession

Norman — Sat, 17 Oct 2009 12:00:31 GMT

I'll believe racing is a dying sport when 17 BILLION isn't being bet on races a year. Sorry to say but attendance at the racetrack isn't a very good barometer to gauge the popularity of the sport.

re: Do You Remember? It Was Tough to Sell Horses Before the Recession

MsComeonNow — Sat, 17 Oct 2009 03:42:15 GMT

Expenses have to come down for owners, or purses need to double from here.

Expenses have doubled, purses have stayed level or dropped on most major circuits. Trainers and especially vets need to wake up, or the bottom 90% of trainers will be out of business in the next 5 years.

re: Do You Remember? It Was Tough to Sell Horses Before the Recession

CG Dean — Sat, 17 Oct 2009 03:21:53 GMT

We need to raise takeout and charge more for our product to ADW's. This might cause a slight decrease in handle but the added money gained by the increases will double purses in a worst case scenario.

The added money will cause people to become buyers and the horses that nobody want to take a chance on will be wanted by many.

We have to make people want horses and want our product. We can't do that by giving it all away.

re: Do You Remember? It Was Tough to Sell Horses Before the Recession

Karin — Sat, 17 Oct 2009 01:19:15 GMT

Racing is dying out- have you been to a real racetrack lately? No one there-

How is racing going to attract new owners when it costs $90.00 a day?

As far as I am concerned, the only ones making money in this business is the vets at the track--

And that's the truth

re: Do You Remember? It Was Tough to Sell Horses Before the Recession

LD PHILLIPS — Fri, 16 Oct 2009 23:15:51 GMT

i saw quite a few small well balanced horses go out of the sales ring sold for peanuts simply because of thier size. i would leave wishing i could scare up an owner to take chances on them!

sometimes a real Big horse is stuck inside and just waiting to get out.

re: Do You Remember? It Was Tough to Sell Horses Before the Recession

seb — Fri, 16 Oct 2009 22:20:54 GMT

Could the sentence at the end of paragraph seven be made grammatical, clarifying exactly what you mean?

Are you intending to say that racehorse ownership decline that that trend must be turned around before structural change in the industry is considered? Or that only after racing achieves a much higher profile will ownership trends change from their current stagnation or decline? Or that racing's profile must increase in order for reforms to take place or something else? Or something else?

re: Do You Remember? It Was Tough to Sell Horses Before the Recession

Karen in Indiana — Fri, 16 Oct 2009 21:52:20 GMT

You've brought up two very good points.

1) Casinos were added to the racetracks here in Indiana just recently. The first year, the advertising theme was 'We have horses and casinos'. This year, there has been no mention of the horses in any advertising I've seen - not on TV & not on billboards. HRTV runs ads that show all the marvelous programs they have and say to ask your cable or satellite provider to include HRTV in their programming, but so far, I've only seen those ads on HRTV. Makes me say 'What's up with that?'.

2. How many of those perfect horses do well long term? Where is Pioneerof The Nile, I Want Revenge, The Pamplemousse, etc? And that's just this year's crop. Like you've said, some imperfections don't affect their racing ability. We've even had a Triple Crown winner, Assault, who was laughed at because he had a foot defect. Maybe if owners were more educated about the horses, the trainers and bloodstock agents wouldn't have to be so concerned about looks over ability.

re: Do You Remember? It Was Tough to Sell Horses Before the Recession

Edward — Fri, 16 Oct 2009 21:17:34 GMT

The disconnect between breeding(selling) and racing is horse racings number one issue. So many of the individual issues stem from the fact that every part of this industry seems to have a different set of goals. But in the end, ironically, the thing that has suffered the most is the RACING end of things in an industry called Horse Racing. everything from non-competitive purses, early retirement of stars, too many horses bred, etc. all trace back to this disconnect. The whole industry is set up to accomodate the Stallion ventures and as long as that is the case, nothing can be solved. Eventually no one will be watching the races and then the A-HA moment will occur when people in this industry go, "Oh yeah, we breed race horses to WIN PURSE MONEYAN RACES AND TO HAVE FANS BET AT THE WINDOWS". Horse buyers would be better to take the old handicapping notion of "skip the favorite" automatically because the real winner is coming out of the pack(67% of the time). In handicapping, the favoruite wins 33% of the time and yet most plus handicappers don't play favorites. In breeding a good-great stallion puts out 10% stakes winners, why would that make you weant to pay $500k for a horse(but you people let a person buy there own goods setting the market? What other auction allows the seller to bid on their own product?). Buy three between $75 and $150 and your chances are better at getting what you want.