Stallion Values - For Purchase?

[GreenThumb]

Hi,

How are stallions priced for purchase.
As an example what would the stallion Latin American be valued at?

http://www.victoryrose.com/html/latinamer.html

Thanks,
Chris

[zinn21]

His value should be based on progeny, age, pedigree, fertility. He covered only 5 mares in 2007 and that must be factored as well.

[bcassidy]

I would place his value at less than 15k. He is 19 yrs old soon to be 20 and has questionalble value for the american racing breeder. I am not sure what his value is for the sport or pleasure horse breeders, but I wouldn't pay more than 2-3k for him, if I wanted him at all.
Young thoroughbred stallions are priced at the stud fee totals for the first three years of a stallions breeding career. So, if a stallion can cover 100 mares in year 1 at 5k and 100 mares in year 2 at 4k and 100 mares in year 3 at 3k, he would be valued in the 1 Million dollar range.
The syndicate wants to be out of the stallion (have gotten all of its money back before the first crop races). Any income after the third year, is total upside.
There are certainly no hard rules but generally the syndicate doesn't take a huge risk. Ideally, everyone would want a low risk high reward financial structure---which is what I described above.

[GreenThumb]

Hi,

Thanks very much for the info.
Do you think it possible to profit on him if purchased for say 5k?
Was thinking about trying to be proactive in trying to bring in mares.
Really would amount to breeding him on pedigree and talking directly to specific mare owners (not the ones I know are out of the question).

When I say profit I just mean more than what I have in him.
This would really be an experiment of sorts

Chris

[hpkingjr]

If it costs you $30.00 per day to keep him plus vet and farrier you have a $20-25,000.00 cost per year plus advertising and nominations. You need 12 mares full pay, to break even, 24 if you discount. My guess would be that he is a money pit. Better to spend the 30K at the sales.

[bcassidy]

Green thumb, here is my opinion--- if you want to get into the stallion game don't buy this stallion. Definitely not worth the investment.
How about buying a single share in a stallion, as opposed to buying 100% of it. A single share should sell for about 3 times the annual stud fee. You can then sell the breeding right for the stallion on a yearly basis or better yet buy a mare you like for the stallion, put her in foal and then sell the mare in-foal or sell the foal after the mare drops the foal and then you are the breeder of the foal and qualify for breeders awards. A much better model to consider. Mull this over and then if you are interested I am sure I and other members of this board can give you information. Buy into a young unproven stallion you like and hope that he improves his mares and that his stud fee goes up. If you get lucky the rewards can be better than playing other parts of the breeding game.

[Dave C]

The commercial stallion business is very capital intensive. If you don't know this, don't try to get in until you know more about the business. If you are interested in buying Latin American or some other older proven (good or bad) stallion, do it based on your own mares and calculate what it is worth to you to have your own stallion in your yard. Any outside mares that he covers are just icing on the cake. If you chase outside mares, even with an unproven but fashionable stallion, you can find the costs eat up all the stud fees unless you can command a 10k+ stud fee, in which case you wouldn't be here asking the question. The stallion side of the breeding equation isn't any easier to make money on than the mare side, unless you get 'lucky' with an unproven sire.

[helen in FL]

I wouldn't be looking at Latin American for race, I would snatch him up in a heart beat for jumper mares. It's close to impossible to find a Riverman stallion these days. Even if he has a Mr. Prospector/Northern Dancer dam line!
Riverman is the grandsire of Slaney who stood as an improvement sire in Holland for the Dutch Warmblood registry. Makes GOOD eventers.

[casallc]

I don't think he would bring $2,000 at auction. I've seen a lot better bring less. The market gets narrow for 20 yo studs.

[GreenThumb]

This is becoming a fun post, thank you.

If it costs $450 per month to keep the stud.
You purchase for say 2.5k (this is not in the works, just hypo right now).
Do a mail out for say $700 dollars get maybe a mare or two paying.

This already done pretty much.....

Look at what worked with Riverman.
That is Vaguely Noble and Nijinsky primarily I know there are others.
Then look at those horses that worked well with Riverman mares, thinking Alydar for instance. Buckaroo would work since he likes the Prince John stuff as well.

Using Alydar check out all his sons produce records looking for shots of Nijinsky and Vaguely Noble for instance. Contact those mare owners after looking at the APR, some would be in California. Contact those people.

Seattle Slew liked Riverman and Prince John, do do the same thing with Seattle Slew sons. Contact those mare owners.

Continue this line of thought and I would think there are some 100-200 mare owners you could speak to....10% of that and you are making a profit.

Look for these lines that have some mahmoud as well since Latin American's Northern Dancer blood would take that and call those mare owners as well.

After a bunch of phone calls expect maybe 20 mares paying (may have to cut some deals) but should be seeing some type of profit.

Now add in the stallion awards from the Cal breeding program and maybe you have a winning situation. Maybe not huge but moving in the right direction.

Get a mare of two yourself etc...

Does this sound like far fetched, pie in the sky type of stuff?

[Dave C]

Your 10% of 100-200 mares that are compatible seems very optimistic to me. They may be compatible from a pedigree perspective but are they what the market wants. If the mare owner can't envision a saleable foal then they won't breed no matter how well the pedigrees match up. That leaves you for the breed to race crowd which tends to be a small and fussy market, (ie the 5 mares he bred this year, less if some of those 5 were in house mares). If you can keep your costs down like you think you can, you can take the chance without losing too much. If you choose to buy him, your best advertising dollars will probably be spent on non-racing people. Count any breed to race mares as bonus. JMHO

[zinn21]

$450 a month for boarding him makes a difference. If you have mares that fit him and think you can hustle some business it might be cost effective.

[casallc]

$450 a month for boarding him makes a difference. If you have mares that fit him and think you can hustle some business it might be cost effective.

I got $500 per month to board studs 25 years ago and that was too cheap. I didn't make my money on board I made my money by getting mares pregnant. I have stood as many as 9 studs in one season and very few of them made enough to pay their purchase price and keep. Some make money but it is kind of like racing - the percentage that pay their way is small. Unless you have the facillities and can do the breeding yourself, this horse will only lose money.

[LB]

Your 10% of 100-200 mares that are compatible seems very optimistic to me. They may be compatible from a pedigree perspective but are they what the market wants. If the mare owner can't envision a saleable foal then they won't breed no matter how well the pedigrees match up. That leaves you for the breed to race crowd which tends to be a small and fussy market, (ie the 5 mares he bred this year, less if some of those 5 were in house mares). If you can keep your costs down like you think you can, you can take the chance without losing too much. If you choose to buy him, your best advertising dollars will probably be spent on non-racing people. Count any breed to race mares as bonus. JMHO

Ditto this.

If this older stallion is capable of paying his own way at stud, why is he being sold?

[GreenThumb]

With hindsight being 20/20.

It is interesting as one could theoretically take a horse like this and apply what should work directly instead of crap shooting so much.

Look at the runners for General Meeting. Some of his top runners are out of Riverman line mares. So there is a Slew/Alydar/Nijinksy thing working.

Here is a Digression filly that won 300k bred on slew and never bend and he did not last long a a sire.

http://www.pedigreequery.com/folly+dollar

I just think it interesting what one could possibly do with a stud like this knowing what works going in.

The horse is not acutally up for sale.
The owner is out golfing and no longer in the biz so that is the reason for minimal support I would guess