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Horse racing is much more than an excuse for gambling. It is a love for the beauty, grace and speed of the horse. It can also be an intellectual battle of examining competing facts and trying to formulate the future from results of the past. In some ways it is an investigation, as performed by an eager detective. And in other ways it can be the thrill of a crossword puzzle, with multiple possible responses, but ultimately only one correct answer. It is a thing of beauty as much as it is a matter of commerce. I have been involved with horse racing in both practical and intellectual ways. From time spent as an apprentice jockey, to later the research of bloodlines in the multimillion dollar world of thoroughbred breeding and sales. And for the past seventeen years I have provided speedrating information to the racing industry and public through my company: Speedratings - Leonard Marlborough.

Stallion Service Fees

March 13th 2009 08:27
Earlier this year the major studs in Kentucky all revised down their initial stallion service fees following the fee announcements made late in 2008.

Encosta De Lago
Encosta De Lago


So far in Australasia this year we have seen substantial declines from all yearling sales in both the average and the sale aggregate. Clearance rates have fallen in line with this with only Magic Millions (in January) managing to keep its clearance rate at 80% or above (80% this year - a small fall from the 83% of 2008).

The Inglis Easter Yearling Sale in Sydney always attracts a quality catalogue - but even it does not appear to be immune to the fact that there is a new evaluation taking place. The meat in the sandwich will be the breeders who have struggled to reach even break even with many of the yearlings they have presented. The high pass in rate reflects a reluctance to accept the new floor and expectation of the purchasers. To accept a new reality.

For instance if we look at the Melbourne Premier Yearling Sale and take top sire Encosta De Lago as an example, we find that of the six lots by him offered only four were sold - fetching $170,000; $160,000; $75,000 & $27,272.

This providing an average price of $108,068 - and a median price of $117,500. Not so bad really - until you consider that his 2007 service fee was $220,000. And to illustrate the previous situation you discover that his 2006 service fee was $176,000 - and his 2008 service fee was $302,500.

It did appear (like house prices) that all we could once expect was appreciation of an asset (house or horse).

The passed-in Colt out of Arantxa Rose was a half brother to Group One winner Regal Roller.

The passed-in filly out of Major Drama is very closely related to Champion 3YO Filly in Australia of 2005, Alinghi. The breeders of both these could have expected sufficient interest to make a sale. But this is apparently no ordinary year.

Perennial sire rival (to Encosta De Lago) Redoute’s Choice fared little better at the Melbourne sales with only one lot sold from his three on offer - this being the showstopper colt closely related to Champion Makybe Diva and fetching $365,000. Redoute’s Choice has a $330,000 service fee in 2008 (the same as in 2007. His 2006 service fee was $275,000).

Any additional ad hoc examples from sales will serve little purpose. We may find exceptions - but I believe in fact we have a new rule. The fact remains that if sale conditions continue to be as problematic next year - as they have (so far) in 2009 - then many breeders will either sell well below the service fees (this not including all the other costs just to get to sale) - or be taking home very expensive pets.

The 2010 yearling sales could be a catastrophe for breeders already locked into the pre-crash expectations of broodmare owners and studs.

The studs must react by slashing the sire fees for 2009 - or else sit beside a silent telephone. And the broodmare owners will probably breed their mares less in any case - and hope for a better 2011.

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