What's Going On Here

Small Fall - By Dan Liebman

2009-11-17T17:57:00Z

There appears to be a “glimmer of hope,” Keeneland associate director of sales Tom Thornbury said Nov. 16. For those who make their living breeding and selling Thoroughbreds, that glimmer shines brightly as they try to make sense of the bloodstock market.

Thornbury’s comments were echoed by several consignors who saw positive signs in the results of the Keeneland November sale, in particular that the gross was “only” down about 10% through six of 13 days of selling and that the RNA rate was 20.6% compared to 32.8% a year ago.

The Keeneland sale saw a dramatic decrease from 2007 to 2008, when the global economy took a real toll and the gross plummeted 45.5%. In two years’ time the gross receipts of $340 million in 2007, an auction record, will fall this year to roughly $160 million.

Through Nov. 15 the cumulative gross for North American Thoroughbred auctions of horses of all ages was $637.7 million. Projecting THAT number through the end of the year shows a gross of about $660 million, a drop of 32% from last year when the total year’s gross was $972.8 million. The gross in 2007 was $1.2 billion.

You would have to go back to 1997 to see a gross for all North American sales near the projection for 2009; in 1997 the figure was $693 million.

The decrease in the number of horses bought back indicates an acceptance of the marketplace, as well as the thought that many horses had to be sold to satisfy creditors.

It should be noted that at the Keeneland sale the dispersal of Overbrook Farm, again through day six, accounted for just under 20% of the gross. No one likes selling into a down market, but the fact is the Overbrook horses stood out at a time when many breeders are holding on to top mares and foals. The 93 Overbrook horses averaged $297,000, compared to $108,000 for the entire sale. W.T. Young built a premier breeding operation at Overbrook, and breeders seized the opportunity to buy into the farm’s female families.

KENTUCKY’S LOSS

The definition of irony arrived this week in the form of a press release announcing that Ro Parra’s Millennium Farms in Central Kentucky was selling a portion of 30 mares to Moon Lake Farm in Louisiana and relocating the mares there (read online at www.bloodhorse.com/horse-racing/articles/53398). Parra had previously announced he was moving some stallions to Moon Lake.

The ironic part is that the release was distributed by Damon Thayer, who owns Thayer Communications and Consulting and counts Parra among his clients. Thayer, a member of the Kentucky State Senate, has angered many Kentucky horsemen by refusing to work toward the passage of legislation to allow slot machines at the state’s racetracks.

“We will likely move more mares over time,” said Parra. “We feel that the Kentucky program is not as competitive as other regional programs like the one in Louisiana.”
Parra is the type of person we need in the Thoroughbred industry. He made money as an executive with Dell computers, started in Texas, and moved to Kentucky. That one of Thayer’s clients is moving mares and stallions out of Kentucky to a state bolstered with slots revenue, is, well, the ultimate in irony.

A GIANT DEPARTS

Racing lost a Hall of Fame member Nov. 16 when trainer Bobby Frankel died at age 68 after a battle with leukemia. Frankel began with claimers and rose to the top of his profession, in the process moving from his native New York to California.

To some, Frankel’s personality was an acquired taste, but to all, his training prowess was easily recognized. He had a special way with horses, and, in fact, all animals, being a true dog lover as well.

Two statistics tell you all you need to know about how good a trainer Frankel was: He saddled the winners of more than 160 grade I races, and since the Eclipse Awards began in 1971 only one trainer, Bobby Frankel, has won five times.

Golden State - By Dan Liebman

2009-11-10T21:03:00Z

Despite the legitimate gripes by Easterners about the Breeders’ Cup World Championships being run two consecutive years in California, there is much to like about having the races at Santa Anita. It is a beautiful place to watch horses train, offers majestic scenery (when the haze allows you to see it), and the weather Nov. 6-7 was nearly as spectacular as the racing.

Granted, the continuous on-track announcement proclaiming Santa Anita as “the most exciting place on earth” was laughable, but for two days, the racetrack lived up to its label as “The Great Race Place.”

Despite the fact Santa Anita is an excellent place to host the Breeders’ Cup, it should not have had the event two years in a row. Nor should any track. The founders designed the Breeders’ Cup to change locations each year, moving around the country, and that is as it should be, for many reasons.

Only a handful of tracks can play host to the Breeders’ Cup, and it is good the organization’s leaders appear ready to announce a rotation for several years into the future, as is done routinely in other sports.

Clinging to the marketing-speak that the reason the Breeders’ Cup was held in Southern California in successive years was to attract Hollywood stars may have actually been a dream some marketing person had, but suffice it to say it was a pipe dream at best. While some sports and entertainment stars show up annually for Kentucky Derby weekend, there has never been a huge turnout from that community at the Breeders’ Cup, including the past two years.

Because of the economy, and because some Breeders’ Cup races seemingly were contrived and have no real divisions to support them, the organizaton’s board should seriously discuss changing the event back to one day and trimming the number of races from 14 to nine or 10.

One is left with some impressions from this year’s event:

It was pleasing that in a year when the Breeders’ Cup was held in California, two winners—California Flag and Dancing in Silks—were bred in the Golden State. Not unlike what is occurring in some other states, California’s breeding industry has suffered mightily in recent years; farms have closed; mares have left or are not being bred; and the number of stallions is decreasing. Hopefully, this Breeders’ Cup success will help.
Breeding and racing is about the dream, no matter who you are. We were reminded of this during winner’s circle celebrations. There were winning owners of considerable wealth as well as others in a far lower tax bracket. A good horse can come from anywhere.
The Breeders’ Cup Classic (gr. I) win by Zenyatta opens up the Horse of the Year discussion. Her victory was exhilarating. But the vote should not be about one race or who won the most recent race. It should be about the body of work over the entire year. Just as a horse should not get an Eclipse Award for winning one race in this country, neither should a horse be rewarded for showing up, or be penalized for not showing up, on a particular day.
Repeat wins by Goldikova and Conduit and then watching the first female win the Classic were simply as good as it gets.
Zenyatta had a bit of trouble loading, had to suffer with the rest of the field through Quality Road’s antics, broke on the wrong lead, was throwing her head the first 200 yards…and then won with a dramatic run to deny a most game Gio Ponti. She walked onto the track with her head bowed, reached her right front out in a sign of majesty, and on the way back to the winner’s circle, stopped to pose before parading in front of her adoring fans. She is class personified in the Thoroughbred. Even members of the press, as jaded and cynical as they are, stood and clapped.

Less Than Classic - By Dan Liebman

2009-11-04T18:45:00Z

You would think Eileen Mayer never heard of P.T. Barnum.

Mayer is Chief of Internal Revenue Service - Criminal Investigation. Her job involves overseeing probes into claims of tax fraud. Barnum, of course, was the famous 19th century master of hoaxes, founder of the outfit that would become the Ringling Bros. and Barnum & Bailey circus, and the man erroneously credited with saying, “There’s a sucker born every minute.”

After three principals of the former ClassicStar horse breeding operation—David Plummer; his son, Spencer Plummer; and accountant Terry Green—were reported last week by the U.S. Department of Justice as having pleaded guilty to charges of defrauding the United States, it was Mayer who said, “Investment schemes that seem too good to be true should be a signal to individuals to stay clear.”

Furthermore, Mayer said, “The IRS is actively pursuing promoters who market these tax-evasion schemes.”

P.T. Barnum was a self-proclaimed promoter. So, too, was David Plummer, who founded ClassicStar and recruited investors to participate in the company’s mare lease program. A release from the government about the guilty pleas said Spencer Plummer “assisted David Plummer in the operation of the mare lease program,” and Green assisted investors by “preparing and filing income tax returns on which they reported fraudulent deductions” and “assisted customers in their IRS audits by creating false and backdated documents and presenting them to IRS auditors,” the government alleged.

The information presented in the government’s case by the justice department claims participants in the ClassicStar mare lease program filed tax returns with the IRS claiming false tax deductions of more than $500 million, resulting in a tax loss to the government of more than $200 million.

Other allegations against ClassicStar include: lacking sufficient mares to fulfill its obligations to investors and at times substituting Quarter Horse mares; providing loans to investors through National Equine Lending Co., said to be an independent company but actually owned by ClassicStar; and often, at the conclusion of an investor’s participation, having the outstanding loan “extinguished through fictitious trades involving an entity that purportedly owned interests in coal bed methane gas wells” through ClassicStar’s parent company, GeoStar.

ClassicStar began buying mares earlier this decade: $4,171,000 for 15 mares in 2001; the leading purchaser by money spent in 2002 and 2003, with 27 mares for $17,535,000 in 2002, and $13,570,000 for 20 mares the following year; and $9,835,000 for a dozen mares in 2004.

It didn’t take long for things to unravel.

In 2006 ClassicStar’s Kentucky farm was raided by federal agents, as was David Plummer’s Buffalo Ranch in Utah. Later that year a group of ClassicStar mares was sold at auction for $20.8 million. The following year 48 ClassicStar mares were purchased for $9.8 million by John Sykes of Cloverleaf Farm in Florida, who would also purchase ClassicStar’s Central Kentucky farm in partnership. The money was used to pay creditors.

In September 2007, ClassicStar filed for Chapter 11 bankruptcy protection; court documents listed claims from more than 200 persons totaling nearly $1.4 billion.
Numerous civil suits alleging fraud involving ClassicStar and its practices are still pending. Newspaper reports have said the Plummers and Green, who each face a maximum sentence of five years for conspiracy to defraud the government, are cooperating in the continuing investigation.

It is hard to imagine anyone who makes his living breeding Thoroughbreds fully believed the veracity of the mare lease program’s claims that were the underlying principle of ClassicStar.

People have been breeding horses for many years, and there are many intelligent and experienced attorneys and accountants who handle nothing but equine accounts. They are well versed in the tax codes as they apply to breeding and racing horses, including those leased from one entity to another.

Eileen Mayer is an experienced attorney herself, and as she said, if it sounds too good to be true, it probably is.

A Great Guy - By Dan Liebman

2009-10-28T18:34:00Z

I tuned in Aug. 8 to listen to Ralph Wilson give his acceptance speech when the longtime owner of the Buffalo Bills was enshrined in the NFL Hall of Fame.

As the applause quieted, I dialed Bruce Hundley’s cell number to ask a question, the answer to which I already knew. Bruce raised and sold horses for Ralph for decades.

“What are you doing?”

“I just watched Ralph give his speech,” Hundley said. “What a guy. What a great guy.”

One day about 30 years earlier Bruce phoned Ralph and told him, “We have a great colt here. He will do well at the sale.”

“What do you mean ‘we?’ ” Wilson asked.

“Well, Mr. Wilson, you haven’t paid your bill in a while,” Bruce said, and a lifelong friendship was forged.

Bruce, who died Oct. 21 at age 67, forged many lifelong friendships.

I first met Bruce July 24, 1984, at the Keeneland summer yearling sale, but we didn’t become good friends until 20 years later. That day in 1984, as the bidding on a Northern Dancer colt Bruce was selling for Ralph reached $4.5 million, Bruce ran down the aisle of the pavilion to the auction stand. It had not been announced the colt, out of the group stakes-winning and classic-placed Le Fabuleux mare Fabuleux Jane, was a cribber.

It took a brave man to stop the bidding on a horse at $4.5 million.

The bidding began again, and the colt was sold to Sheikh Mohammed for $7.1 million.

Though that colt, named Jareer, didn’t amount to much, Bruce did raise four champions at his Saxony Farm—two for Wilson, one for himself and partner Wayne Garrison, and another for a breeding partnership he managed.

For Wilson, he raised and sold Ajdal, a Northern Dancer colt out of Fabuleux Jane’s dam, the Raise a Native mare Native Partner. Ajdal brought $7.5 million and was the champion sprinter in England in 1987. For his friend he also raised and sold Arazi, a son of Blushing Groom out of Fabuleux Jane’s daughter Danseur Fabuleux. Sold as a weanling for $350,000, Arazi won the 1991 Breeders’ Cup Juvenile (gr. I) and was champion 2-year-old male in the U.S. and France.

Bruce told Ralph to sell colts and keep fillies to develop female families. Wilson had acquired Fabuleux Jane’s granddam, the Tom Fool mare Dinner Partner, as a yearling in 1960 for $20,000. Dinner Partner, Native Partner, and Fabuleux Jane all became stakes winners and stakes producers.

As a child growing up in Louisiana, all Bruce wanted to do was raise champion cattle and horses. During a trip to Kentucky in 1964 he met Doug Davis Jr., and the trainer and breeder became his mentor. One day while working for Davis at Oaklawn Park, Bruce met his wife, Susan. Not long after, they moved to Kentucky and bought the first parcel of what would become Saxony.

For 40 years Bruce raised and sold horses in Central Kentucky. He often said of selling yearlings: “You can’t hide a good one, and you can’t give away a bad one.”

Bruce’s son, Broussard, has learned his father’s lessons, and will keep the Saxony name alive and well.

Bruce liked good horses, but he also lived for good food, good wine, and good conversation. Not to mention good fly fishing and good hunting. He was an avid polo player. He served on the Kentucky Racing Commission and Equine Drug Council and was very active politically.

Visitors were always welcome at the gathering spot at Saxony, which Bruce called his cantina. The building was filled with saddles, spurs, photos, and hides he had collected over the years, and friends sat around a giant table made from a tree on the farm that had fallen during a storm.

Bruce was free with his thoughts, and he never, ever ran out of colorful stories.

He would say to me, “Here’s what I thought about your column,” and then would add, “That’s just my opinion.”

He was a friend to many. He was a man who wanted only what was best for the industry. And he was a hell of a horseman.

But that’s just my opinion.

Chilling Spills - By Dan Liebman

2009-10-20T17:09:00Z

The top three headlines in the news section of BloodHorse.com the morning of Oct. 19:

Kaenel Retires From Race Riding
Jockey Escobar Out 4-6 Weeks
Albarado Off Oct. 18 Mounts at Keeneland

Sadly, word was then received that at Blue Ribbon Downs in Sallisaw, Okla., rider Mark Pace was killed Oct. 18 when he was thrown from his mount, Reep What You Sow, after she hit the rail.

Mark Pace was 58 years old and had just arrived at the racetrack from a farm in Texas. He picked up the mount on the maiden claimer after jockey Mike Bishop was injured the day before and took off his mounts. It was only Pace’s second mount in 2009. He was said to have previously ridden more than 10 years ago, but Equibase shows no wins at recognized tracks for Pace.

By contrast, Kyle Kaenel is only 21 but has been banged up enough already to call it quits. His riding career lasted five years.

Kaenel, son of former rider Cowboy Jack Kaenel—who was the youngest jockey to win a Triple Crown race when he guided Aloma’s Ruler home in the 1982 Preakness Stakes (gr. I) at the age of 16—was injured in a spill Sept. 27 at Fairplex Park. Kaenel’s mount, maiden claimer Sheval Dom Sallay, clipped heels, tossing him to the dirt. He suffered a broken collarbone, shoulder blade, acromion (a bone at the top of the shoulder blade), and pinched a nerve in his back. In previous riding accidents he had broken his back and neck.

Having begun riding in the fall of 2004 at age 16, Kaenel had booted home 608 winners from 4,345 mounts; this year he had 47 winners, three in stakes races.

Martin Escobar, 41, has numbers very similar to Kaenel’s. He began riding in 2001 and has 687 winners to his credit from 6,420 mounts. This year he has visited the winner’s circle 55 times from 469 mounts, with eight wins from 93 mounts at the current Remington meeting.

Escobar had finished second in the last race at Remington Park Oct. 17 when his mount, Cuvee Blanc, fell just past the wire, unseating the rider. The jockey walked away under his own power but was later found to have a fractured hand and back and will be sidelined four to six weeks.

Then there is Robby Albarado, who is one of the top riders in North America; the man who guided Curlin to his two Horse of the Year campaigns.

Albarado, 36, has been aboard 4,067 winners from 24,668 mounts and is having an excellent 2009, with 166 victories from 929 races and three grade I wins. In the sixth race at Keeneland, Oct. 17, an allowance event on the turf, Albarado’s mount, My Baby Baby, stumbled at the start. In regaining her footing, My Baby Baby’s head came back and hit Albarado in the head, cutting the jockey near his right eye. He took off his mounts Oct. 18 but was expected to return to riding Oct. 21.

It is hard enough for a jockey to maintain weight by sitting in a sweat box or purging what he or she eats. But there is much more to it than that. Jockeys compete in a sport that is not only demanding physically and mentally, but full of peril at every turn. The Jockeys’ Guild reports that 150 jockeys have been killed in riding accidents since 1940.

Of course, accidents don’t just happen in the afternoons or evenings. The same dangers exist for jockeys and exercise riders who guide horses in their daily morning gallops and breezes.

Padded helmets, protective vests, safety rails, synethetic surfaces—all have been designed to help protect those who ride Thoroughbreds. But this week’s headlines are yet another reminder of how dangerous it is to be an athlete who rides Thoroughbred horses for a living.

The best thing you can wish a jockey as he or she is being legged up is simple: Have a safe trip.

Stars In Our Eyes - By Dan Liebman

2009-10-15T00:40:00Z

(Originally published in the October 17, 2009 issue of The Blood-Horse magazine. Feel free to share your own thoughts and opinions at the bottom of the column.)

Writing in The Daily Telegraph following Sea The Stars victory in the Oct. 4 Qatar Prix de l’Arc de Triomphe (Fr-I), Marcus Armytage noted: “With a fair wind behind him, it would be fantastic to see him cross the pond and annihilate the Americans in the Breeders’ Cup.”

While racing fans everywhere would like to see Sea The Stars run next month in the Breeders’ Cup at Santa Anita, there is a much more significant reason for the winner of six consecutive group I races to come to the Americas: to stand at stud.

The conventional wisdom in today’s economy is that only one man can afford to purchase and stand Sea The Stars: Sheikh Mohammed. However, there might be another to stand him: the 3-year-old colt’s owner, Hong Kong businessman Christopher Tsui.

There is a strong attachment to the colt’s family for Tsui and his parents, David and Ling Tsui, who won the Arc in 1993 with Sea The Stars’ dam, the Miswaki mare Urban Sea. That sentimental tie is even stronger considering Urban Sea, who went on to produce seven stakes winners, three of them group I winners, died earlier this year.

Christopher Tsui would not have to keep 100% ownership of the son of Cape Cross. In this time of economic crisis within the Thoroughbred industry, Sea The Stars presents an opportunity for stallion farms to work together more closely. Imagine if Tsui kept an interest in the horse while four or five major stallion operations collectively syndicated the remainder.

At which of the farms would the horse stand? Let Tsui decide. And let the other farm owners agree to check their egos at the door in support of his decision. Or, better yet, perhaps they should establish a farm similar to the Irish National Stud. What a great horse to start with.

Bringing Sea The Stars to Kentucky could be the beginning of a trend to return U.S. stallion farms to the days of standing such horses as Nijinsky II, Riverman, Nureyev, Alleged, Sharpen Up, Blushing Groom, Lyphard, Roberto, The Minstrel...and don’t forget Miswaki, the broodmare sire of Sea The Stars.

These are the kinds of horses that made their mark on the racecourses of Europe, had good pedigrees, and were supported by leading breeders through the purchase of breeding rights, shares, or seasons; horses that attracted buyers from around the world to yearling sales at Keeneland and Fasig-Tipton; horses that improved the stud book.

As the breeding of Thoroughbreds became more commercial, and with an increased emphasis on speed, fewer and fewer horses that raced in Europe have occupied stalls in stallion barns here following their racing careers. In essence, U.S. breeders began shying away from turf sires.

Though the installation of synthetic surfaces at a few tracks in North America has given some new life to “turf sires,” it has not been a strong enough push in that direction...yet.

For years the number of European group I winners bred in North America has been declining. There are numerous reasons for this, but among them is the fact fewer pedigrees in North American sale catalogs are attractive to European buyers.

This could explain why one of the leading purchasers of yearlings, Coolmore, was absent from the Keeneland September sale in Kentucky but purchased four of the top six lots—colts by Oasis Dream, Galileo (two), and Montjeu—out of the recent Tattersalls October yearling sale in England.

There is a need for horses that are attractive to all owners and buyers, whether speedy-looking types coveted by pinhookers, or two-turn oriented youngsters sought by end-users. Sales need to offer horses that would like dirt, turf, synthetic or all of the above; some horses that might work in the U.S., others that appeal to buyers from various parts of the world. We currently have some of that, but not enough.

Sea The Stars, and if not him then others with similarly attractive qualities, could help add some much-needed balance to American pedigrees.

Stallion Sale - By Dan Liebman

2009-10-06T17:38:00Z

The six week period between the Keeneland September yearling sale and Keeneland November breeding stock auction is typically when stallion managers announce stud fees for the coming season. Well, maybe not this year. Several have hinted they might wait until after the November sale.

There is a high degree of nervousness right now in the breeding industry, and the operative word in the previous sentence is “might.” The fact is no one knows exactly what to do in relation to stud fees, and no one wants to be the first to pull the trigger.

As expected, when fees were announced last fall many went down, but following the November sale many fees were cut again. Breeders were balking at the prices, showing their disdain by not booking mares. Those who were booking mares were demanding deals; others merely waited until the season had begun, figuring the odds were more in their favor at that time for a favorable rate.

Breeders spoke of sending fewer mares to the breeding shed, and indeed they did. The Jockey Club recently announced a projected drop in the 2009 foal crop of more than 8%. One would expect a further decline in the foal crops of 2010 and 2011.

Fewer mares bred; fewer stud fees; fewer stallions needed; fewer horses to sell; fewer dollars to deposit.

Now the commercial market has experienced a sharp decline, accentuated by the September sale, the largest in volume by far.

(The September sale was going to show declines simply because of market conditions, but other factors caused it to drop further. Keeneland officials need to hold a serious meeting to discuss ways to revamp the auction. One thing is for sure—Keeneland is lucky there aren’t more barns at Saratoga.)

Next to the value of a breeder’s mares, his biggest expense is the amount he pays for stud fees. For those who stand stallions, the amount they can charge for stud fees is their greatest source of income.

For years now, however, the breeding industry has run amok, driven by the commercialization of the breed. More mares thrown into production; larger books for stallions; growing catalogs assembled by sale companies.

The industry went through a correction in the mid-1980s, caused by a change in the tax code, and it took many years to reach stable ground again. Now comes a correction that is much more severe. And this correction is not forced by actions of the federal government, but rather by self-inflicted wounds such as greed and gluttony.

During the next few weeks, farm owners, stallion managers, and shareholders will be discussing stud fees. The decisions they make will affect not only their income, but the income of everyone in the industry, and perhaps even the sustainability of the industry.

Asked during the September sale about the expected drop in stud fees for 2010, one stallion manager said simply, “It will be unprecedented.”

Another, though not as succinct, was just as pointed, saying, “For some stallions, a 50% cut will not be enough. They will have to either be cut more, be relocated, or be pensioned.”

Congratulated on the successful year a stallion’s runners were having, one farm manager said, “Three or four years ago I would be drooling thinking about how much I could raise his fee. Now, I would be a fool to raise it at all.”

Indeed, common sense says that in all but the most extraordinary case, it would be foolish to raise a stallion’s stud fee. Breeders must cut costs; stallion managers must help them do so.

Blood On The Tracks - By Dan Liebman

2009-09-29T17:59:00Z

After reading Bill Farish’s pointed attack at Kentucky Senate President David Williams, it is easy to say the Farish family, staunch Republicans, has decided the fight for video lottery terminals in the state is about business, not politics. But speaking during the Keeneland September sale the day after his letter was published, Farish said that is not the case.

“This is not about business,” Farish, the general manager of his family’s Lane’s End Farm near Versailles, Ky., said emphatically. “This is about an entire industry.”

Farish insisted there was no grand plan to the timing of his op-ed piece, but it was e-mailed to media outlets just days after the announcement of the drop in the size of the foal crop and in the midst of the Keeneland September yearling sale where commercial breeders were taking a beating.

“The size of the foal crop will drop more next year and that affects everyone,” Farish said.

By “everyone,” Farish means every person that breeds, races, and sells Thoroughbreds and every person that trains, grooms, or hot walks a Thoroughbred. But, he pointed out, he means many more people than that; he means people who sell fencing, gates, and trucks; people who own hotels, gas stations, and feed stores; people who plant trees, build barns, and operate vans; professionals such as veterinarians, farriers, and equine dentists.

In Kentucky alone, it is estimated upward of 100,000 individuals—in a state with a total population of about 4.25 million—are dependent on the horse industry for their livelihoods.

The ripple effect, however, goes much further than the borders of the Commonwealth of Kentucky. Horses bred, raised, and sold in Kentucky race around the world. Horsemen from every state and countless countries ship their mares to be bred to Kentucky stallions. Kentucky’s tourism is a thriving industry, partially thanks to the thousands who flock to the state each year because of the state’s horses.

The state, by the way, collects 6% sales tax on stud fees, receives revenue from pari-mutuel wagering, and has numerous businesses that would not exist if it were not for the nutrient-rich water and soil that make the lush pastures of the state such a great place to raise horses.

As Farish pointed out, a recent poll by the Kentucky Equine Education Project found 70% of Kentuckians favor expanding gaming in the state. But the addition of video lottery terminals is being held political prisoner by Williams, who has said he does not believe the machines are in the best interest of the state and its citizens.

But rather than one who comes across as truly looking out for the best interests of his constituents, Williams, through his bottlenecking of alternative gaming legislation, is seen as the worst kind of bully, one with an ego.

Imagine how difficult it is for a person like Bill Farish to so disparage the state leader of his party. Remember this is a man who worked for President George H.W. Bush and his father was appointed the Ambassador to Great Britain.

“I never thought I would see such dire straits for the industry,” Farish said. “He (Williams) is deciding people’s livelihoods. He has no idea how upset people are with him.”

Many members of the horse industry, Republicans and Democrats alike, recently supported Democrat Robin Webb, who won a special election for a Kentucky Senate seat. They are poised to help other candidates, from both parties, who publicly support alternative gaming.

“This is just the tip of the iceberg,” Farish said. “Who knows where the industry is going.”

Who knows how far the foal crop can drop?

“The other Republicans are feeling the heat,” Farish said. “They’re scared right now.”

In his rebuttal to Farish, Williams calls the addition of video lottery terminals a “band-aid” for the industry.

If you don’t apply the band-aid, the wound keeps bleeding.

David Williams needs to understand Bill Farish, and every other member of the horse industry in his state of Kentucky, is bleeding.

Econ 101 - By Dan Liebman

2009-09-22T18:58:00Z

The day off from selling at the Keeneland September yearling sale provides consignors and buyers alike a chance to catch their breath after the first four days of the auction while preparing for the remaining days of the two-week long sale.

The harsh reality of the severity of the drop in the market had set in (for the first four days, the gross was down 42.5%, the average decreased 31.6%, and the median was off 38.9%), and as consignors showed horses Sept. 18, they universally agreed the law of supply and demand dictated they were in for more of the same.

Oh, not just more of the same for the remainder of the sale, but more of the same for years to come. Markets don’t correct themselves overnight, especially ones like for Thoroughbred horses that take a long time to bring the product to the buyers.

It is tough to admit when the market problem you encounter is caused by none other than yourself, but breeders and consignors recognize they are paying dearly now for years of sending too many mares to the breeding shed. They couldn’t resist temptation to take the money off the table in the short term during a lengthy up market which has caused harm to the breed in the long term.

The economic downturn has certainly exacerbated the current market correction, but in this case, too many horses and too few buyers, as one breeder/consignor said, “is Econ 101 no matter what the product is.”

As they discussed the market conditions, and the situations that caused them, on this day of non-selling, most breeders were not singing the blues, but rather offering solutions for the future. Breeders are a resilient group, and as business people, are good thinkers about why things happen and what can be done to change them. That they were not hanging their collective heads and preaching gloom and doom is a positive sign. More than anything else, they appear to be looking for leadership as they face the recovery period in their industry.

One breeder/consignor, who also stands stallions, wants The Jockey Club to limit the size of stallion books to 110 mares, starting with next breeding season. “The breed registry is responsible for the breed, plain and simple,” he said. “They have the power to do this; this action is what is best for the overall health of the breed.”

Asked about the inevitability of a lawsuit claiming restraint of trade, this horseman was even more pointed in his remarks. “They should anticipate it and budget for it. They have regulations now to ensure the integrity of the breed and the sustainability of the breed. They are the only organization that can do this. They have the power to do what is right.”

A second-generation horseman, whose family breeds and consigns horses and stands stallions, is looking to the American Graded Stakes Committee for a policy he thinks will help the industry.

“Let’s make Saturday the big day at the races,” he said. “The (American) Graded Stakes Committee can inform tracks that if they get a race graded, on that card they cannot run any state-bred races or any claiming races. That card has to consist of some of the best races the track offers. Fans will understand that on Saturday, racing is offering its best product.”

A third-generation horseman, again a breeder, consignor, and person who stands stallions, wants to see far fewer racing dates, and wants the NTRA to lead the way in working with racetracks on a fair and equitable schedule.
“No one wants to watch a baseball game the day after the World Series ends,” he said.

While a few months off is certainly good for the horses, it also could mean fatter purses, which would help incentivize new owners to enter the business. Attracting new owners should be the goal of everyone in the industry.

Classic Ladies - By Dan Liebman

2009-09-15T17:38:00Z

When Patricia Cooksey was beginning her riding career in 1979, she was advised to list her name as “P.J.” because many trainers would not ride a female jockey. When she retired in June 2004, Cooksey had been aboard 2,137 winners, second all-time among women riders.

Cooksey also made history when she became the first female jockey to win a stakes race at historic Churchill Downs, guiding Bestofbothworlds to victory in the 1986 Pocahontas Stakes.

The following year at Garden State Park, a young lady named Linda Rice won her first race as a trainer. Rice didn’t have to hide her name. Women have always been more accepted on the backside, and Rice was a natural for the profession, a third-generation horseperson. She is the daughter of highly respected horseman Clyde Rice, a former trainer who has operated a training center in Florida since leaving the racetrack.

Linda Rice tried college for a couple of years, but the lure of the racetrack finally won out. Racing has been much the better because of her decision. When Saratoga closed its 2009 session Sept. 7, Rice, like Cooksey, had made history. She stood atop the trainer’s standings at one of the country’s most prestigious meetings, making her the first woman to win the trainer’s title at a major United States racetrack.

It was not the first time Rice had made history at a racetrack. In 1998 she became the first woman to train a grade I winner at Keeneland, when she saddled Tenski to win the Queen Elizabeth II Challenge Cup Stakes. She had won her first grade I just a month earlier when Things Change took the Spinaway Stakes.

Rice finished second in the Saratoga standings in 2007, and last year, in the Mechanicville Stakes at the Spa, she tightened the girth on the first four finishers—Ahvee’s Destiny, Canadian Ballet, Silver Timber, and Karakorum Elektra. That result should not have surprised anyone because the previous year, Rice ran one-two-three in the New York Stallion Fifth Avenue Stakes at Aqueduct with Canadian Ballet, Sweet Bama Breeze, and Noble Fire.

Every August during the Saratoga meeting, the annual induction ceremony is held at racing’s National Museum of Racing and Hall of Fame across the street from the racetrack. This year’s honorees included steeplechase conditioner Janet Elliot, the first woman trainer and second female—the other being retired jockey Julie Krone—to be enshrined.

Elliot has led the National Steeplechase Association’s annual earnings list six times and her runners have earned three Eclipse Awards.

Of course, the success of women in racing is not restricted to the U.S. In France, fourth-generation horseperson Criquette Head-Maarek, the daughter of former trainer and leading breeder Alec Head, is arguably the greatest female trainer in the world. Trainer Gai Waterhouse has won numerous training titles in Australia, and two years ago joined her father, Tommy “T.J.” Smith, in that country’s Hall of Fame.

In 1983, Penny Chenery, Allaire duPont, and Martha Gerry became the first women to become members of The Jockey Club. Since then, 11 other women have become members and there are 10 current members—Helen Alexander, Josephine Abercrombie, Ramona Seeligson Bass, Alice Chandler, Chenery, Lucy Young Hamilton, Dell Hancock, Viola Sommer, Stella Thayer, and Charlotte Weber.

It would be impossible in a single column to portray accurately the importance women have played, and continue to play, in racing. Suffice it to say it has been significant and covers every aspect of the industry: owner and breeder; trainer and jockey; veterinarian and researcher; buyer and consignor; groom and hotwalker; track and racing official.

We are reminded of how special the accomplishments of females are when we watch Rachel Alexandra.

Perhaps those who only have a casual interest in racing still more easily recognize the name Mine That Bird than Rachel Alexandra. But, those in the industry recognize how special Rachel Alexandra is.

And Linda Rice, Janet Elliot, and P.J. Cooksey help us remember the contributions of women to the Thoroughbred industry.

Keep Up the Heat - By Eric Mitchell

2009-09-09T19:49:00Z

The U.S. Congressional hearings are over. Network camera crews are documenting other stories. PETA demonstrators have gone back to protesting fur coats.

The sting of Eight Belles’ death on Derby day last year is waning, so the National Thoroughbred Racing Association and The Jockey Club no longer roll out press releases with the same frequency about new programs to improve safety, eliminate the overuse and abuse of drugs, and trumpet efforts to shore up racing’s integrity. While the Eight Belles tragedy attracted a lot of intense and unpleasant scrutiny, it lit a bonfire under industry leaders who produced some admirable results within a year. Most notably, all North American racing jurisdictions now ban the use of anabolic and androgenic steroids within at least 30 days of a race; and, the NTRA has implemented its racetrack accreditation program, with 10 tracks approved so far. The accreditation program, which is administered by the NTRA Safety and Integrity Alliance, has led to substantial changes at some tracks. One track is now directly affiliated with a racehorse retirement facility and another has implemented pre-race testing for total carbon dioxide (the test for milkshaking).

These accomplishments and others were heralded during last month’s Jockey Club Round Table with lots of well-deserved congratulations.

But here’s the kicker. We can’t stop. We can’t let up the intensity just because the protestors and the cameras have gone away.\

During the Round Table it was stated that in one year the industry has “effectively eliminated the use of all anabolic steroids in the training and racing of Thoroughbreds in this country.” True, rules were adopted to ban race-day use of steroids, but to say steroid use has actually been eliminated is a stretch. Consider the comments by Dr. Scott Palmer, chairman of the American Association of Equine Practitioners’ Racing Committee, who said our current medication policy, though well-intentioned, is compromised by a lack of uniformity and financial support in multiple racing jurisdictions. Here is the heart of Palmer’s message the industry needs to embrace: The time for extended diplomacy is over. To the extent that medication reform can help save our industry, we must act now with deliberate speed and conviction.

Do I hear an amen?

Yes, the industry has made progress, but it’s still behind the curve. Deliberate speed and conviction is needed on all fronts.

NTRA president Alex Waldrop said he visited 25 industry leaders last week in California and believes no one is backing off. Maybe the overt display of urgency following Eight Belles’ Derby is gone, but the will to reform remains strong. It will be the Safety and Integrity Alliance’s responsibility to keep the pressure up, Waldrop said. He added that the gains made to date are modest but are getting noticed outside the Thoroughbred industry and are rebuilding racing’s reputation among sports fans. A recent NTRA survey of 1,200 general American sports fans and 608 people identified as “core fans” shows a slightly better impression of Thoroughbred racing now than existed a year ago and a belief that the efforts to improve safety and integrity are sincere. The survey estimates 44 million sports fans are aware of the Safety and Integrity Alliance. Really? Forty-four million seems high, as it’s one in seven U.S. residents. The survey also shows 57% of sports fans watched the Kentucky Derby this year. Out of an estimated 153 million U.S. sports fans, that’s more than 87 million people. Nielsen reported 16.3 million watched the Derby telecast on NBC this year. Were the rest in sports bars, Las Vegas sports books, and at tracks and off-track betting sites? Maybe it’s possible. I’ve been assured the statistics and methodology of the survey are solid.

All the more reason to push hard for reforms. We have a lot of potential fans out there watching.

Eric Mitchell is Executive Editor for Digital Media at The Blood-Horse

Numbers Game - By Dan Liebman

2009-09-01T17:16:00Z

Not that many years ago it seemed fine to know, and record into past performances, that a horse had run six furlongs in 1:11 1/5. Today we wouldn’t stand for that because we now understand the difference between 1:11.01 and 1:11.19. Those times, and those fractions in between, formerly all showed as the same time (1:11 1/5) when in fact they weren’t.

But it took the industry to recognize that timing in hundredths rather than fifths was the best thing to adopt as a standard, which it began doing in 1991.

It had become obvious that timing Thoroughbred races in hundredths was more accurate for compiling track, stakes, and world records, just as it had been for timing swimmers, runners, and car drivers.

Recently, the world of track and field saw the world’s fastest man, Usain Bolt, break his own world record in the 200-meter sprint, dropping his mark of :19.30 to :19.19. Consider that when Bolt ran the :19.30 in Beijing, he bettered the record of :19.32 set by Michael Johnson in 1996.

Like track and field fans, racing enthusiasts can now also watch as records are set, or missed, by hundredths of a second, giving them more appreciation for the effort and more attachment to the history of the sport.

In addition, the more accurate timing of horse races aids handicappers, and any improved piece of handicapping information is good for everyone because the bettors are the customers.

Changing from fifths to hundredths didn’t just happen; it took improved technology by timing systems. But it has been well worth the time, effort, and, cost, to make it happen.

Today, as the world changes at a dizzying pace and more things become both humanly and technologically possible, racing needs to consider another change: moving from fractional to decimal reporting of odds.

A column by a racing journalist, discussed during a recent meeting with some racing officials and the press in Saratoga Springs, N.Y., illustrates why this change is necessary.

The horse in question was 5-2 when he sprung from the gate, but his odds changed during the running of the race to 2-1. He won, of course.

Even casual bettors have noticed an occurrence that is frustrating to all who wager on racing: late odds changes. It happens, and racing officials openly admit it happens, though they claim nothing sinister is afoot.

In this instance, using decimal odds, the horse in question was 2.52-1, but when the late money in the pool was added 10 seconds after the start of the race, the horse’s odds changed to 2.48-1. Doing the math, 2.52-1 equates to a $7.02 payoff and thus shows as 5-2 odds, while 2.48-1 translates to a $6.96 payoff and so appears on a tote board as 2-1.

Most bettors could cope with knowing that while all bets have been made, the reporting of wagers continues until 10 seconds after the start of a race. The problem is, in the example above, the race was two miles long and the final pool was calculated more than 80 seconds after the race started. Final odds: 2.45-1.

Officials said the problem was a telecommunications failure at one off-track betting site.

The easy solution is to close all pools with zero minutes to post or when the first horse enters the starting gate. Claims that money will be lost by doing so are probably valid, but only for a short time. Those who want to wager will quickly train themselves to bet with a minute to post instead of waiting. Computer bettors, many of whom are big players allowed access to pools to search for last-second value, will adapt their systems as well.

The technology exists to compute odds by decimals, and to close pools in a timely fashion so as to provide a person who wagers on a 5-2 shot an actual 5-2 shot.

Customer Service - By Dan Liebman

2009-08-25T15:33:00Z

(Originally published in the August 29, 2009 issue of The Blood-Horse magazine. Feel free to share your own thoughts and opinions at the bottom of the column.)

Though what he was speaking about had nothing to do with the sale of Thoroughbreds, listening to Daily Racing Form publisher Steve Crist Aug. 24 at The Jockey Club Round Table made me recall the 1983 Keeneland July yearling sale. The final price of the sale topper appeared as $200,000 because no one ever thought an eighth digit would be needed on the bid board. Actual hammer price: $10.2 million.

The blog software being used by Daily Racing Form on its Web site never experienced a problem with only allowing 100 comments on a post until Crist asked readers how they perceived medication issues in Thoroughbred racing. Because of that 100 comment limit, Crist had to re-post the blog entry six times. Final number of comments: 550.

Having been asked to speak at the Round Table about the perception of medication issues by racing fans, Crist decided to go directly to the source. He got an earful.
“The response was astounding: in its volume, in its tone, and in its content,” Crist told those in attendance.

And, as he pointed out, these comments were not “the complaints of horseplayers who had just lost a photo, but rather the “sentiments of some of your most loyal and most thoughtful customers.”

Crist read a sampling:
“Drugs in racing are out of control; the inmates are running the asylum.”

“There must be swifter, harsher justice, and more punitive penalties—zero tolerance, three strikes and you’re out of the game.”

“Punish the owners.”

As Crist said, these are “our fans’ perception of what racing needs to do about medication.”

But something interesting happened while Crist was receiving the comments. On July 16, Lone Star Park stewards, following guidelines established by the Texas Racing Commission, handed down a six-month suspension of leading trainer Steve Asmussen because a post-race urine test showed a metabolite of a local anesthetic in a maiden winner in 2008.

“I asked the respondents who had already posted comments, without agreeing or disagreeing with them, if what they really wanted was what they had been suggesting,” Crist said. “Assuming the suspension, which is under appeal, was sustained: Did they really want the trainer to be thrown out of the game? Did they really want all of his horses removed from their stalls and turned over to outside trainers rather than his assistants? Should all of the owners he trains for also be sanctioned? Should the hundreds of horses who have run under his name this year be barred from competition? Should Rachel Alexandra not be permitted to race again this year?”
Only a few, Crist said, even tried to answer.

What he took away from the exercise, Crist said, is that our fans are “completely confused” because “we make virtually no distinction between therapeutic medications that have a proper and even humane role in the treatment of these animals, and the abusive use of serious drugs. We make no distinction between marginal overages of medicine and the deliberate use of nefarious chemicals.”

In other words, the industry needs threshold levels, and the adoption of those levels by all 38 jurisdictions that regulate racing in North America. In addition, standardized testing methods for laboratories would ensure that uniformity not only exists regarding the level at which a drug would not be considered performance enhancing, but also the proper method for testing for such medications.

These ideas have been discussed for years, but Crist’s sampling shows many fans yearn for a day when they can be implemented.

Other sports, Crist said, such as baseball and cycling, are doing brisk business because, “After spending years in denial, officials of both of those sports eventually came clean and said something simple and straightforward that racing’s leaders need to say: We have a problem with medication, and we’re going to do something about it.”

Crist was asked to speak about perception, which he did. But that racing has a problem with medication is reality.

Crop Chop - By Dan Liebman

2009-08-18T18:19:00Z

The question was not whether fewer mares were bred this year, but exactly how many? With a struggling economy, stallion owners were talking about a reduction in mares for all but the hottest stallions. Now, The Jockey Club has answered the question: roughly 12% fewer.

Though the complete Report of Mares Bred will not be released for a few months, officials of The Jockey Club announced Aug. 14 that it is projecting the 2010 North American foal crop at 30,000, the lowest level in more than 30 years. It also dropped the earlier estimate of the 2009 crop from 35,400 to 34,000.

Ever since the rapid growth in the commercial market caused the foal crop to top 50,000 in 1985-87—the top being 51,296 in 1986—it has been steadily declining, dropping
under 40,000 in 1992 and now down to 30,000, a number not seen since the 30,036 of 1977.

For further historical reference, the size of the foal crop first topped 5,000 in 1935; 10,000 in 1956; and 20,000 in 1966. But a rise or drop from one year to the next of 12% has never happened before.
There are many ramifications from a smaller foal crop, some positive and some negative.

What happens to the nearly 3,500 mares that were not bred this year? Will their owners return them to the breeding shed in a year or two, or do we now have more “unwanted” horses, a problem becoming more visible after years of overbreeding?
When the full report is issued, we will see which stallions had trouble attracting mares this year. Some will surely be sold, while others will be pensioned from active duty.
The need for fewer stallions may cause some horses not to be even tried at stud, a possible negative. Some of those same horses may remain in training longer, a possible positive.
A reduction in stud fees lightens the load on breeders but means less income for breeding farms. Those that paid hefty prices for stallion prospects in recent years will have a longer period
to “get out” on their investment.
Fewer foals means fewer sale horses and fewer racehorses. Less supply could translate to more demand in auction rings, but fewer racehorses could bring hard times on some trainers.

It is not farfetched that a drop of this magnitude could ripple down to mean fewer farms, stallions, mares, owners, breeders, trainers, and racetracks. Whether that is a positive or negative depends on your point of view.

WAIT 'TIL NEXT MONTH

Even in a down market, a blip of positive news is possible, as evidenced by the upswing in business at the Aug. 10-11 Fasig-Tipton Saratoga yearling sale. The auction was up in gross, average,
and median.

However, though any good news right now is sorely needed—psychologically as much as anything—to make too big a deal of the Saratoga sale results, with just 160 horses sold, would be foolish.

After Fasig-Tipton was purchased last year by an associate of Sheikh Mohammed, sale company officials said one of the goals was to make the Saratoga auction the elite place to sell summer yearlings, much as it was in the first half of the 20th century and the Keeneland July sale was thereafter. They worked hard to increase the catalog and presented quality individuals that impressed prospective buyers.

For the first time in 20 years, sale company officials persuaded Sheikh Mohammed to attend the sale personally, and though his agents have purchased horses there every year, his sheer presence
made an important statement.

The Maktoum family and associates spent $18,345,000, nearly 35% of the gross. That certainly is not unprecedented; the Maktoums spent more than $76 million at the 2006 Keeneland September
sale, more than $63 million at that venue in 2005, and as far back as 1984, bought horses for $51 million at Keeneland July (more than 50% of the gross).

We will get a truer read on the overall market next month at Keeneland.

Bounce Back - By Dan Liebman

2009-08-11T17:36:00Z

The general economy in the United States is starting to show signs of recovery, elements of which are necessary to improve individual industries, such as the business of breeding and racing Thoroughbreds.

On Aug. 6, the U.S. Senate approved a measure already passed by the House for $2 billion in additional funding for the program known as “Cash for Clunkers.” Though the program, which provides a hefty incentive to trade in old vehicles getting bad mileage for newer, more efficient models, is a short-term stimulus, it does seem to be working to help dealers sell cars and encourage consumers to spend money.

The following day an announced fall in the unemployment rate was unexpected, so even though the economy lost 247,000 jobs in July, the rate improved from 9.5% to 9.4%. During all seven recessions in this country since 1970, unemployment has continued to rise for months following the official end of the recession. While most economists believe the unemployment rate will hit 10%, the fact that it is slowing is certainly a positive sign.

At the close of business Aug. 7, the Dow Jones Industrial Average registered 9,370, a new high for the year. The index, often used to measure the health and direction of the stock market, sat at 8,776 at the end of 2008, dropped to near 7,000 in February, and then saw a big jump in July as confidence in the economy grew.

The racing and breeding industries have not been immune from the economic pains gripping not only this country, but most others around the globe. Handle began dropping early in 2008, and purses naturally followed suit. The trend continues.

In July the amount wagered on U.S. races dropped 13.4% from the corresponding month a year ago, and year-to-date, handle is down 10.9%, according to Equibase statistics. Purses paid to owners decreased 7.35% during the month and for the year are down 6.27%.

In 2008 U.S. handle declined 7.2% from 2007 to $13.67 billion, its lowest level since $13.115 billion was estimated to have been wagered in 1998. The 2008 figure represented a 9.9% drop from a record $15.178 billion wagered in 2003.

Purses did not start falling until the third quarter of last year. They were actually up 2.63% through August 2008 but at the end of the third quarter had fallen 2.37%. That is not surprising, however, considering September 2008 is seen as the tipping point when unemployment reached its highest point in five years, the housing crisis deepened, and several major banks failed, most significantly Washington Mutual.

Purses last year dropped 1.3% to $1.16 billion, the first time that figure had decreased in three years. This year’s decline in purses will certainly be more dramatic.

The downward trend in purses is not solely because less is being wagered on races, but because the public is also retreating from alternative gaming, which helps fund purses. Not only are racinos feeling the pinch, but so, too, are Nevada casinos. The latest revenue report from the Nevada Gaming Control Board, for May but released in July, showed casino winnings down 8.3%, the 17th consecutive month of decline. A larger drop was seen in the race books, off 12.3% for the month.

Racing industry officials are quick to place the blame for the declines in handle and purses on the economy. Certainly the recession is a major factor, but many other issues have also contributed, such as disputes between tracks and horsemen over advance deposit wagering; issues with large gamblers, such as use of illegal medications and a refusal by some to bet on synthetic surfaces; and a lack of funds to market racing in its competition with other sports and gambling options.

The U.S. economy will rebound; it always does.

Decisions made today will affect whether the Thoroughbred industry will rebound along with it.