Shedding the Old - by Dan Liebman

“It was the best of times; it was the worst of times…”

So goes the oft-quoted line penned by Charles Dickens in A Tale of Two Cities, his 1859 novel that describes the days of the French Revolution and the proletariat’s fight against the aristocracy.

The Thoroughbred breeding industry finds itself facing both the best and worst of times, and it has nothing to do with the proletariat and aristocracy. It has to do with the world economy.

“The problem is not the horse industry,” a breeder said emphatically one recent morning at the Keeneland track kitchen. “The problem is the overall economy.”

While the global economy is a mess, there are problems in the Thoroughbred industry, many of which are magnified due to the current economic climate. It is how breeders react that will set the course for the future.

Adverse economic conditions are forcing new ways of thinking about old ways of doing things. Those who re-create, innovate, accommodate, differentiate, and recalibrate not only will survive, but are poised to succeed when the economy turns around. Those that do not may not be in business much longer.

For years Thoroughbred breeders have been enjoying the best of times; now they must navigate through the worst of times. Tough times force tough decisions, but they also force creative thinking.

It was easy when sales were strong, but recent auctions suggest those days are over for the time being. Important decisions made today affect sales for years to come.

As breeding sheds throughout the Northern Hemisphere open this week, stallion managers are offering various incentives to induce mare owners to breed to a particular horse. Besides the monetary discounts, more farms are offering the opportunity to pay stud fees from sale proceeds, allowing commercial breeders a longer period of time to pay off an obligation.

One farm this year, Walmac, is offering a new twist, extending the opportunity for a mare owner at any time within 30 days of foaling to convert the contract to a foal share arrangement. By agreeing to let a breeder decide later about a foal share, the farm is showing faith in its stallions’ foals while allowing the mare owner a chance to assess his cash flow up to 10 months down the road. It is this type of creative thinking that may help keep the seesaw level during the best of times and worst of times.

With foaling season in full swing, breeders everywhere must reassess their broodmare bands, deciding which mares to breed back and which mares to cull or simply give a year off. If every breeder decided not to send 20% of his broodmares to the breeding shed this year, the size of the foal crop and the pendulum of supply and demand would swing back in the right direction come 2010 and 2011.

When an auto manufacturer wants to slow production, it is easy. Turn off the assembly lines, send workers home, and produce 20% fewer cars. For a breeder it is not so easy. Mares bred in 2008 are producing foals in 2009; there was no way to shut down the assembly line. But there certainly is a way to shut it down for 2010.

Breeders will also be looking to sale companies for help, and on Feb. 6 in Australia, Magic Millions announced a new commission structure for its weanling and broodmare sale: prices up to and including $100,000 pay 6%; hammer prices between $100,001 and $150,000 are charged 4%; and sales of $150,001 and up pay 2%.

From this perspective, the structure is creative but seems upside down. Why should the seller of a $100,000 weanling pay $6,000 in commission while the seller of a $200,000 weanling pays $4,000? Wouldn’t it benefit small breeders more to give them a commission cut on lower-priced foals and mares?

Any savings a small breeder can bank today will help him navigate through the worst of times. 


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Regarding your comments about the sales commissions. In Alberta many years ago they set up breeders bonuses for Alberta breds. It seemed like a good plan but the horse had to win for more than 10,000$ claiming to receive the bonus. When asked why the cut off was so high, the comment from Dr.Reid{chairperson,Horse Racing Alberta} was breeders will try to breed better horses. That make no sense as we are a very small market with the average at the yearling sale about 6000$ any given year.Bottom claim is 5000$ where the majority of Alta breds race. They have one day of stakes for Alta breds only.Most of the stakes are open including the Canadian Derby. I'm all for improving the breed but when you shut out the guys that breed useful horses and are the majority that full all these cheap races,then something is very wrong with the system.

10 Feb 2009 1:07 PM
Abbie Knowles

A great article and thought provoking.   It would be so good if less mares were bred!!!!  

Foal sharing is a good idea and may help many of the smaller breeders.  As you write it shows that the Farms have faith in their stallions.

Creative thinking is indeed needed to ride out the recession and economy slump and perhaps it is time to look at different ways of doing things and to try new ideas.

However i have faith that there are enough people in horse racing to do the above so that the sport can come through stronger, better and healthier!  Just as in our lives suffering can strengthen us; so it could be true for our beloved sport.  I am not happy that things are so tough but i am an optimist and hope and believe that good can come out of this.

God Bless

Best wishes


10 Feb 2009 7:20 PM
Lord at War

Why does the fear of the economic downturn lie upon the shoulders of the "big owners"?  What are "big owners?"  Big owners are the people,. the person, the contingency, the Hedgefundesque grouping, which we see on television, living in the glitz and glamor of the upper tiers of racetrack society as they anxiously await their opportunity in a graded stakes race that has been circled more times on a calendar than a child's Christmas.  There is coverage from Horse A 's last race to the next race, sometimes months, not weeks between the two.  We get updates, interviews, pictures, workout information, sappy stories behind the scenes (albeit some are very serious, colonel John, shesadevilsdue, flanders) daily.  Now we see the coverage, we see the immense potential this one horse has, and in one quick interview, one turned page in Blood Horse, one quick photo, we have the opportunity to stand back and say, "WE'VE FAILED!We've failed at covering horseracing!"  The job of being a columnist or a beat writer should be to increase fan support through fundamentals and introductory events that have established what it once meant to be a horseman.  not covering how many times Rick Dutrow, has called someone "babe" in an interview, or "lets see if larry jones is exponentially more depressed than he was the other day."  This isnt what we need.  We need people looking into steroids issues, blood doping, race fixing, "toteboard anomalies"

why would i say We've Failed  Well we just spent the month and half between races talking about one horse.  Thats what the problem is.  We are not getting the coverage of the working man- the groom, the trainer, the hotwalker, the vet, the farrier, the racing secretary.  Does anyone know that the most important person in racing is the racing secretary????  They dictate the races, which horses are allowed to compete, when the race will be run, the weights, the ages, and what horse will be in what post position.  That's right, i said it.  post positions.  Race Fixing.  TABOO.  Nobody wants to talk about it, calling any bad luck you are given "racing luck" and any "good luck"  something that will never occur again.

My two points out of this are simple:

The downtime I spoke of, for that one horse in between races, is a waste.  Lets remember that while we are all waiting for Horse A to run his next race in 45 days or so, lets support the support.  Thats right, support the support.  The are trainers that work twice as hard as others and may never see their names written in a newspaper as many times as one may see the names Pletcher, Asmussen, Baffert.  Lets think why these guys are famous?  Big owners!!!!!  When it is considered wrong to put a groom on anything more than 7 horses a day, lets think about that these guys training have hundreds of horses in training, at different racetracks, at different parts of the world, nevermind the country, and seem to maintain a level of consistency that is hard to comprehend especially when dealing with 300+ INDIVIDUAL HORSES.  DONESNT ANYBODY GET IT?????  Consider racing a group of 9 experiments conducted at a racetrack in one day.  You have 9 races, ave starters 8, distances that range from 4.5 furlongs to 1 1/4 miles, sometimes more, sometimes less.  Weather, track condition, opponents, post position, jockey weights, trainer changes, equipment changes, scratches, etc.  All of these variables shape the race and how it will turnout.  Trainers have found ways around this over the years as the evolution of blood doping agents, milkshakes, steroids, class I-III Meds has superceded the nebulous concept of a horse's form.  We can have all of the regulatory committees we want to establish drug rules, but if no one is watching all aspects of the testing procedure lets consider that there may be opportunity to take advantage of the system.  Perhaps knowing people in the testing labs, knowing people in the regulatory committees, knowing people in the stewards office.  And by "knowing" i mean "greasing the pockets" and by people i mean "accomplices".  Has anyone ever thought that possibly with all the money and power that lies behind those real silk silks orepresenting the owners, the procurement of a testing machine that mimics and achieves the same processes and results as one in a state lab office could happen....and probably already has...many times over?  Its time to turn the spotlight off whats hollywood in racing and shine that light on the working man, and the people involved with everyday horseracing...just to let them know we are watching them.

12 Feb 2009 9:29 AM

We really need to get a handle on the breeding of these race horses.  That would help so much.  That is a huge problem and that is why there are so many un wanted horses.  It is really sad but it all starts with the breeding.  If we can get that aced, we are on the right path.  

14 Feb 2009 1:34 PM
sid fernando

Dan, a very nice piece.

15 Feb 2009 2:57 PM

Please tell me exactly how these are in any way the "best of times" for the thoroughbred breeding industry.  (I fully understand how they are indeed "the worst of times.")  The premise of your article is ludicrous.  Who are you kidding?  

16 Feb 2009 3:33 AM

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