Shifting Sands - By Dan Liebman

(Originally published in the December 5, 2009 issue of The Blood-Horse magazine. Feel free to share your own thoughts and opinions at the bottom of the column.)    

Ever wonder what the Thoroughbred industry would look like if Sheikh Mohammed woke up one morning and decided he no longer wished to be a participant?

If you are a breeder, you probably don't want to think about it. Well, the game would continue, but it would certainly have a different look.
There is no reason to believe this will happen, but the subject became something to postulate when the United States economy took a step back Nov. 27 on news the country Sheikh Mohammed rules, Dubai, is not immune from the global economic crisis.

On Nov. 25, the country's development arm, Dubai World, asked for as much as six months to postpone payment on approximately $60 billion it owes creditors. That news rocked global markets including the U.S., which when trading reopened following the Thanksgiving holiday, saw the Dow drop more than 150 points, about 1.5%.

Dubai has been consumed with development, countless stories detailing how the tiny Arab emirate had the majority of the world's construction cranes building skyscrapers at a frenetic pace. But when the recession hit, it forced real estate into a tailspin, and Dubai found itself in trouble.

When the country that has symbolized growth suddenly can't pay its bills, markets around the world fall. And, while there is no reason to think the ruler of Dubai will walk away from the business that appears to give him as much pleasure as any other with which he is involved, the Thoroughbred market would also fall if he decides to call it quits.
It seems safe to say Sheikh Mohammed has invested more than anyone else in the Thoroughbred industry. He owns more land and horses, employs more people, and spends more at auctions. This has not been done overnight, but rather over more than 25 years, so his involvement is not a passing fancy.

Though neither Sheikh Mohammed nor his bloodstock agent, John Ferguson, attended the Keeneland and Fasig-Tipton Kentucky November sales, which was certainly unusual, Sheikh Mohammed did attend the Fasig-Tipton Saratoga sale in person and Ferguson was far and away the top spender at the Keeneland September sale. Also, representatives of the Sheikh's operation are continuing to seek bloodstock; for instance, several offers have been made for the winner of a recent major stakes race for juveniles.

Sheikh Mohammed is busy working on financing to solve the financial crisis that has hit his country. There is no reason to think he will cause a crisis in the Thoroughbred industry.

It is nice the Oak Tree Racing Association wishes to honor Zenyatta by naming a stakes race after her. Zenyatta won four grade I stakes during Oak Tree at Santa Anita meetings, including the Breeders' Cup Ladies' Classic in 2008 and this year's Breeders' Cup Classic. Oh, and for the last two years she also won the Lady's Secret Stakes, named for the 1986 Horse of the Year and champion older mare who became a member of the Museum of Racing Hall of Fame in 1992. The race Oak Tree has named for Zenyatta was formerly the Lady's Secret.

While no one can argue against naming a race for an unbeaten champion, surely there must be another race that could be named for Zenyatta.

This would be like Hollywood Park renaming the Charlie Whittingham Stakes for Bobby Frankel.

While being interviewed in early October for a feature story (The Blood-Horse of Nov. 7, page 4070), WinStar Farm racing manager Elliott Walden was asked a simple question: Name a horse we haven't heard of yet but will soon? With farm owners Bill Casner and Kenny Troutt listening, Walden didn't hesitate. "American Lion and Super Saver," Walden said.

Since then American Lion (by Tiznow) broke his maiden and won the Nov. 21 Hollywood Prevue Stakes (gr. III), while Super Saver (by Maria's Mon) was a close fourth in the Champagne Stakes (gr. I), and won the Nov. 28 Kentucky Jockey Club Stakes (gr. II).
OK, we have now heard of them. 


Leave a Comment:

Karen in Indiana

Your take on the situation is interesting and, I think, wrong. I've been listening and reading quite a bit on the situation in Dubai and it is very serious. While it may not have affected Sheik Mohammed's personal fortune, his fate is tied tightly to the fate of his country. It appears Abu Dhabi, the part of the Emirates with the most wealth, has decided it is time to put the brakes on the spending in Dubai by restricting their financial aide.

Sheik Mohammed and his many corporations have provided funding for the horse industry that have supported tens of thousands of people, directly and indirectly, around the world. It will have a dramatic affect when he reduces his spending. And that is a when, not if. The stakes are too high for him not to. If this situation is not resolved in a timely manner, it could lead to unrest in his kingdom and his removal from power.

This global crisis has hit Dubai very hard and it is not a sudden thing. There have been news items for the 1 1/2 years about Dubai: immigrant labor being abandoned in the country without a way to get home when projects have shut down, many construction companies going bankrupt when developers can't pay, whole buildings sitting empty because there are no buyers.

I hope for the best for Dubai and the Sheik. He has a vision that would do more to bring about peace in that part of the world than any army could ever hope to do. And I say this is a proud mother of 2 veterans of Iraq. But there is no way I see for the horse industry to avoid the consequences of what is going on over there and it is more responsible to prepare for that than to put on the rosy glasses and say the sky isn't really falling.

01 Dec 2009 11:12 AM

Ironic, that for several decades,Sheikh Mohammed was chastised for spending such large sums of money by the media and those competing against him and now the thought of losing his participation sends chills thru the industry.

01 Dec 2009 11:13 AM

Relying on Sheikh Mo to forever prop up the breeding industry is akin to building your house on sand.  Good luck with that.  

01 Dec 2009 12:02 PM
Golden Gate

I hope that Sheik Mohammed gets his country back on track. I have never met him or Princess Haya but I did get to observe him from my place on the paddock rail at this years Kentucky Derby. He was so happy to be there and proud of his horses. I was very happy to see that he also afforded his beautiful wife great courtesy and respect as did the others of his contingent. It is great that we have a friend in the Arab world that loves horses and racing as he does.

01 Dec 2009 1:18 PM
steve s

Looks like the Sheikh been using the bank money to buy horses-the banks will never see there money again but the goverment will bail them out again

01 Dec 2009 1:30 PM

I think the Sheik has done more damage than good  to the industry. Darley along with Coolmore have inflated prices in studs and auctions to the point of preventing what used to be the regular buyers from competing against billionaires. The US thoroughbred industry was stronger without them . The breeders bred for excellence not what they could sell these two. In Keenland(November) they were not around and horses sold for what they are worth in the market not as a result of a bidding war or because it was by one of the Sheik's studs. The more horses are affordable to the general public the more the industry will grow.It will also allow the industry to be independent  and not confined to the whim of two or three people.

01 Dec 2009 1:57 PM

I for one would welcome a Thoroughbred industry without Sheikh Mohammed.  I think his participation in the sport, while causing windfalls for some, has overall been a severe detriment. Overinflated prices caused stars to be whisked off to the breeding shed too soon (Bernardini still breaks my heart). It's unhealthy for the industry to have all its eggs in one basket.

01 Dec 2009 4:43 PM
Kim in KY

I have a faith in my heart that if he was to wake up tomorrow and no longer have a thing to do with racing, our industry would survive. This industry, this business of breeding, training and racing has endured wars, hardship, stock market crashes, depressions, recessions and terrorist events. It will endure this too, if it does come to pass.

01 Dec 2009 6:54 PM
Larry Ensor

Yes Dubai World a "private" corporation owned by in large by the government defaulted on its 60 billion dollar debt payment its effect on the world's major markets, especially the US was a minor tremor at best.  From what I understand very little of its paper is held by investors in this country and other major markets. In fact the US stock market was up substantially today.  What has not been noted in our trades and correct me if I am wrong, is the fact that no major purchases were made by Middle Eastern concerns at the Tattersalls sale either. And the market did not collapse.  I do not subscribe to the believe that the health of the US bloodstock market is totally dependent on Sheikh Mohammed and Coolmore. Yes, if they were to drop out and or drastically cut back on their participation it would have a dramatic effect on those who cater to that end of the market. But they represent a very small segment of the industry by in large. It would have no effect on my breeding and racing operation and is of little concern.  In fact I think I think it would have a beneficial effect for the majority of breeders and owners by bringing bit of sensibility to the grand scheme of things.

What's In A Name? Everything! History, nostalgia, romance, honor. You are spot on for chastising Oak Tree on this travesty. The NYRA disserves the same.  For example, The Go For Wand Handicap, how can they say it is the 56th running of the race when she was born in 1987?

01 Dec 2009 8:05 PM

i'm pretty sure that he buys advertisment space in this periodical/so I doubt you'll publish this/if you really are a horse racing fan/then you would notice the recent onslaught of the very best horse's headed 4 dubai/our gas dollars hard @ work

01 Dec 2009 8:14 PM
Karin C-C

You cannot take the kind of money the Maktoums have spent on Thoroughbreds off the table without changing the business.  If the Maktoum family stops buying horses, it will drive prices lower.  If the Maktoum family has to re-structure their holdings and downsize their participation in breeding/racing, it will affect the industry negatively.

Anyone who thinks otherwise has no understanding of basic economics.

02 Dec 2009 12:18 AM

Oh puleezzzzz. I for one wish the sheik & all his cousins would take their action to their own country.For years the sport of horseracing in America has been shifting its focus from sportsmen & sportswomen proudly racing horses they bred to bigtime spenders who made the word "commercial" the adjective that most describes the sport today.

Back in racing's golden era--yes, kids, the golden era was a long time ago--the Whitneys, the Vanderbilts, the Phipps, the Hertzs, the Paysons, Hal Price Headley, Greentree, Calumet, King Ranch, the Chenerys, the duPonts, Maine Chance, Walter M. Jeffords,, the Wideners, Ethel D. Jacobs, Tartan Stables, Belair Stud, Frances A. Genter, Rex Ellsworth, Brookmeade, Cain Hoy Stables, Darby Dan, Windfields, Harbor View, Rokeby, etc, all bred and raced their wonderful horses in competition with each other, and horseracing enjoyed "America's Pasttime" status. Then came the 80s & along with it the sheiks of Dubai, and the era of megabuck spending took off & soon became bigger than the sport. The days when the "market" was a secondary function died, and the one where
trying to buy a classic or cup prospect began. Spurred by the mega billionaires from the desert who had more money than Ft. Knox and spent it unreservedly.

The era when buying and selling shoved sport in the  background is the day the music died. Horseracing will never regain the status it had in the golden era, and those big players in the sport--I believe we called them sportsmen & sportswomen-- who put blood, sweat and tears into American racing--disappeared from the scene.

So, I, for one, will have no regrets if the ruler of Dubai goes back to his tiny, expensive country and starts paying those Chinese laborers more than slave wages to build those castles and golf clubs and gambling venues for the ultra rich that have the tiny emirate in debt. Maybe he can throw in a few bucks to help lift the great many poor of that region out of poverty. So what if horseracing loses its almighty dollar sign. Maybe it'll regain its soul. Oh, my alltime favorite racehorse was Assault, who I fell in love with at the age of 8. And when I was a sophomore in high school in Maryland, I saw Native Dancer run at Pimlico. There's never been another like him, or like the aura he ran in. Sic transit gloria mundi.

02 Dec 2009 1:42 AM

This Industry was able to survive for decades before they came into the game, and will still be around when they exit or diminish their presence. Most of us (small breeders) with a limited budget will never sell a horse to him or can aford to breed to most of his Stallions. It will afect sales companys, consignors, that rake in huge commissions from the sale of multimillion dollar horses, and a few breeders.

02 Dec 2009 7:30 AM
Golden Gate

I like Sheik Mohammad. Yes he has bought a lot of the nice horses but buying some of the nicest horses and paying large sums for them helped the farms he bought from.

Also having all the wealth in the world does not guarantee you will have all the winners. I really enjoyed seeing the bidding wars on some of the horses and was always glad when some won out over him but also glad when he won sometimes.

One thing I wish he would do though is let his good fillies run longer like was done with Zenyatta.

Having the Sheik who loves race horses involved in the sport is historical just like having the Quenn of England is. It is a sport of kings but also little people like me. Horse racing is one of the few places the economic classes can mingle and have a common goal.

02 Dec 2009 7:31 AM

More horses sold for less money that stay in the US .

02 Dec 2009 8:19 AM

Wishing him all the best for Dubai and him personally.

02 Dec 2009 8:21 AM
Breeder in Ky

Re: comments by Nina, Kim, et al....What a crock of crap. Please define regular buyer. Horses sell for what someone is willing to pay, thus you have a sure way of knowing exactly what they are worth at that moment in time. Welcome to the free market and the auction. Affordable to the general public? Hello; the general public does not have a paycheck that allows one to keep a horse in training. The bills for this are far more than the general public takes home in their monthly wage. There are plenty of quality horses available for a very reasonable price (as in much lower than the cost of production). This is due to gross overproduction. This is a Global industry, not "The US T-Bred Industry". Where exactly do you think the base of our present breeding stock came from? The former denizens of the New World? They didn't have horses, remember? Seems like the Arab horses may have had some part in the foundation stock, along with some nags from that little island north of France. And why would you think any of you could exclude anybody from participating and competing. Most likely you are operating on a shoestring too. Bet you'd shut your mouths if the Sheik bought one of your horses for the big bucks.

02 Dec 2009 11:30 AM

He could always pump more oil and pay for the debt that way.  Dubai the surrounding emirates could always produce more oil that we would gladly buy for $10 a barrel.  Cheaper oil will bring the world out of the recession faster, but until taxes are cut and spending is slashed in this country, it will still only amount to a little splash in the pond.  I don't see the Sheikh getting out of the Thoroughbred business, but I can see him selling some of his American holdings, back to Americans for pennies on the dollar to raise capital.  

02 Dec 2009 2:40 PM

I cannot understand any criticisms of Sheik Mohammed or his family in regards to horses, as opposed possibly to his vision for Dubai World. He has money; he spends it where he wants to. He did not force anyone to take his money. Sure, he and his family may have driven prices up for a time, but that is the nature of a market. I have not heard that he or his family manipulated the horse auction market for profit. Someone above listed a bunch of rich American families. Frankly, I don't see any difference at all. The Sheikh penned a nice speech a few years ago in England about the need for better purses to make racing economic again. Who can disagree with that? Personally, I hope Sheikh Mohammed can win the Kentucky Derby soon, and even the Triple Crown; I think he deserves it. Much of the carping seems to be due to anti-Arab feeling or simple jealousy aimed at people who are better off -- both are American traditions.

I will definitely read the international financial news with greater interest now. I was surprised to learn, for example, that Dubai does not sit on a lot of oil, though another emirate, Abu Dhabi, does. Whoever loaned all the monies to Dubai World apparently did so without recourse either to the Government of Dubai or to the ruling family of Dubai. So the borrowers got a real good deal and the lenders look stupid. What's new? The answer is to fall back on that other American tradition -- pay the lending bank executives more.

02 Dec 2009 2:52 PM
Brian Mitchell

It might get the rest of us a chance to get into the game.  

I have wanted to be an owner for a long while now, have done all the homework, just waiting now...for the proper changes to be implemented.

02 Dec 2009 2:55 PM

I wouldn't worry too much about the Sheik, he'll still be involved in Racing one way or another.

This Industry has always been a Self-Sustaining And a Self-Correcting one.  

So with or without his money it will go on.   It will move forward.

And like they say...One mans Loss is another mans Gain.  

02 Dec 2009 5:08 PM

To Breeder: No I don't operate in a "shoe string budget" I have plenty of money but chose to step aside till the racing world deleverages from the likes of the "sheik". If you are really a breeder then I can't understand your position. You see a crumbling market after over paying for stud fees and you are not making any money. This situation was brought to you by the promise that every year you will sell your product for higher money. It's pretty much like the housing bubble. Unsustainable.

02 Dec 2009 7:09 PM

It's about time for his outrageous expenditures to catch up with him. Hopefully this will force him out of racing and breeding, because he makes it hard for honest, small-time owners and breeders to make it.

02 Dec 2009 7:42 PM
Patricia Guthrie

I think the Sheik has done a lot for the racing industry.  Just think of all the thousand of people he's employed all over the world. I respect his eye for a horse and that he's employed people who also have an eye for a horse.

I don't think racing would collapse without him, but much color of the racing industry would go with him. Not saying that Mike Ivarone Bobby Baffert and many others are colorful.

Good luck with Dubai.  I hope they get their financial crash back to where it belongs.  Oh yes, I think kthe Sheik has his own fortune and doesn't have to steal from the banks to finance his race horses.

02 Dec 2009 10:29 PM
Lord at War

First, Dubai doesn't produce oil.  However, Abu Dhabi, its neighbor and fellow UAE member is oil rich.  For Dubai to get help from "oil" money, it has to rely on its fellow UAE members.  

Second, someone pointed out names and farms from America's golden era of racing.  My question is simple, where are those names now?  What were there roles in the downfall of racing?  If you don't know, then don't reference them.  They "ruled" racing and they, collectively, made decisions which were extremely detrimental to racings long-term solvency. (ie: television airplay, medication, independent jurisdictions).  Additionally, these folks were as disconnected, economically, from the "other" 95% of us as the Sheikh.  It has always been a sport ruled by the wealthy.

Third, it isn't the cost of the horse which serves as a barrier for ownership, it is the cost of training, boarding, vet work, shipping, et al.  Good horses can be had for reasonable money. Keeping one in training is the burden.

Fourth, I will even concede that the money brought in from the Middle East helped drive the bloodstock market, however there were others involved as well.  Do the names Sangster, Coolmore, Lukas (via his clients), have any meaning?  Personally, I hate that the bloodstock "sales" market has overtaken the actual racing in importance.  I too would love to see the days where people are more inclined to breed and race their own.  Guess who, at present, would rule in that scenario?  Perhaps you should look at the mares purchased by the Middle East contingent.  In fact, if you look at their purchases over the past couple years, I think it becomes apparent they intend to breed more and buy less at auction.  Cannot blame them... the sales are rift with very sketchy practices.  

Fifth, I think it is becoming apparent that many problems involving racing can be directly or indirectly linked to two distinctly different problems, yet problems that have a large degree of overlap.  Medications and the lack of a single governing body have coupled to cripple the racing and are possibly having a profoundly negative effect on the breeding.  These are both home-grown problems; distinct to the US. Cannot blame Middle Eastern money, in fact, I believe it is common knowledge that the top foreign stables are frustrated by these things also.

I find it refreshing that the number 1 player in the industry is a horseman.  I find it refreshing that the number 1 player does not breed for the sales arena. (They do stand stallions, but you rarely see their weanlings or yearlings go through the sales ring... and if you do, they are culls and they have no problem telling you such.)  

If you have ever had any dealings with any of the Dubai owned farms, you probably noted their commitment. I, personally, found them to be the most honest and straightforward group I dealt with.  

I could go on.  Simply, the problems with the current era of racing is the result of decisions made within the Jockey Club and the "Golden Era" set over the last several decades.  Much of the problem with the bloodstock market is the result of greed, corruption, and questionable practices by people who are not necessarily horse people.  The Sheikhs do not fit any of these catagory.  

03 Dec 2009 2:26 PM
Breeder in Ky

Gee Whiz Nina, you sure know a lot about me and it seems well, nearly everything. Deleverage? Huh? This is called the "Sport of Kings" for a reason. Don't look for the exodus of wealthy people from horse racing. Then of course people like you with plenty of money can get involved instead of "stepping aside". How many horses do you have in training, breeding? Do you own any? Do you have a farm. Also, don't assume I'm paying to much for stud fees. Or that I assume an ever higher price for a product. Or that I am losing money. My product sells at a profit. I am familiar with the words "Home Run".Probably you should "step aside" in your offensive comments about people with lots of money who are drivers of this industry.

04 Dec 2009 11:03 AM


06 Dec 2009 1:29 AM

I hate the way Oak Tree erased Lady's Secret -- so short sighted -- she was a wonderful horse

Z could have been honored with a statue or in some other way.

06 Dec 2009 3:56 PM

One of the realities is that the entertainment dollar is shrinking and there are more and more avenues for it to be spent.  Back in the 1930's when racetrack attendance was at its peak, horseracing wasn't competing against NASCAR, or multi-state casino's or various other outlets.  So horseracing has suffered a shrinking audience and revenue base.  That's reality.  

Meanwhile, there are very few people in this world who can afford to pay ten million dollars for a horse only to see them win one race for them. (As in PYRO).  

The Dubai financial crisis is simply a case of spending more money than you're generating and on the day it comes due you fail to pay it back. Sheikh Mohammad will NEVER go broke but he will never recoup his investment from Thoroughbreds.  He's spent a hundred times more than he'll ever realize in returns.  He isn't looking to make a profit, he's looking to win races.  Grade One races.  Championship races.  He's amassed the greatest and largest band of broodmares in the world.  He's got more horses with 'supreme' (not just superior) pedigree's in training all over the world than anyone could imagine.  He's spending umpteen  times more on his annual overhead than he's generating in purse money. This qualifies him as a sportsman (not in it for profit).  It doesn't mean he has the best interests of this industry at heart, it means he wants to win races, THEE big races.  We'll never understand his perspective because we'll never see it from his vantage point.  His is an effort to have the best, race the best and do the best.  He's had the resourses available to him to try to accomplish that.  Unfortunately he hasn't been able to conquer American racing like he'd like to.  He continues to try, but hasn't been able to.  This year he proved again for about the tenth time you can't bring a horse half way around the world and win the Kentucky Derby.  He'll keep trying, but it probably  won't happen.

American racing has continued to stymie him and his efforts to dominate.  2009 was his best year ever in number of Grade One wins.  Yet he wasn't able to generate one home bred champion.  His influence on the outcome of American racing is marginal. And yes the main parties to benefit have been certain breeder's, auction houses and those that have landed those plum jobs with him and his organization (once hired, they're seldom fired regardless of performance). But Sheikh Mohammad is not the center of the universe when it comes to racing in America.  His absence would make a significant impact on our industry by lowering the cost of bloodstock, but racing wouldn't feel it nearly as much.  His absence won't change the reality that we are in a declining industry.  Horseracing will never recover.  There's just too many other venues out there to compete with.  There will always be the Saratoga's, and Belmont's and Keeneland's, but the Ellis Park and Pimlico are in their twilight.  Hollywood Park is looking at its last chapter.  Nothing will change that.

I'm not a doom and gloom believer, but horseracing has been going down this path for years.  Medication is not to blame, independent jurisdictions are not to blame, we're just in a slow downward spiral and have been for the last fifty years.  We'll never see average daily attendance in the twenty thousands.  We're lucky when weekend attendance tops ten thousand.  Yes there are days when we have those special events that bring out the crowds, but they are too far and few between.  We'll always have the Derby, but attendance everywhere else is in decline.  

Sheikh Mohammad has been good for keeping the breeding industry in coins, but his absence wouldn't destroy it or do it significant harm.  It would of course put a dent in the road, but this industry would survive his exit if it were to occur.

For the small time breeder, there's nothing more rewarding than foaling and raising and racing a homebred and seeing them win.  I've been lucky enough to enjoy that endeavor.    

07 Dec 2009 8:43 PM

It's not quite Sheik Mohammed's fault - the high cost of racing today. Sure, he had the money and if he wanted a horse, he could go to the mat to get it - but that shouldn't have caused such an overall increase in horse-prices. Not until too many people rubbed their eager little hands together and tried to cash in on it, breeding for the "showring" instead of the track. Stud fees skyrocketed, foals bred skyrocked, sales prices skyrocketed and horse prices went along with them. The Maktoums didn't buy the majority of yearlings; everyone else did. They just bought what they liked. Now too few people breed for the track and too many breed for the sales - and the big bucks. Back in the day, people didn't expect to make huge amounts of money in racing; they already had the money. They just used it to finance their love of racing. Trainers and owners were in it because they loved the horses and the sport.Today's racing build mind-boggling farms (some of the barns look more lavish than a lot of luxury "people-houses." But some pretty special horses were foaled and raised in some quite modest barns. Maybe the current world economic situation will make the necessary corrections and help us all get back to what it's supposed to be about: "My horse can run faster than your horse. Let's race!"

09 Dec 2009 5:46 PM

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