Pedigree Query

I was reading the thread regarding Ghostzapper, and this question came to mind. But I thought maybe it needed to be separate because it is only distantly related to the topic of Ghostzapper...

I was not a participant in the Thoroughbred breeding industry in the late 80's/early 90's, but have noticed going though my APR, here and there and among other shockers, that Deputy Minister commanded a $750,000 stud fee in the late 80's. Dollars being what they are (constantly shrinking) that might be something like getting nearly $2 million today. Is there anywhere out there any published material relating to that meteoric rise and subsequent crash in the TB breeding industry?

I was much younger then and spent as much time as I could stand to lose sitting at TB auctions. In the spring I watched a nice bred 2 year old by Run for Nurse sell for $7500. The same horse sold in the fall sale, broke and in training for $750. The market fell like a rock somewhere in the late 80's. Stallion owners went from high stud fees to giving the breedings away, at least in the regional market of Michigan. I arranged a deal for a friend of mine after the crash, where she could breed three mares to a good stakes winner for a total price of $100. Racehorses are not a necessity. When economics get weird, prices of stallions and foals will go south. As I remember food and gasoline prices went up, but the value of any horse, at least for a while, was frequently less than the cost of the hay they had eaten. Mary Syers

In the spring I watched a nice bred 2 year old by Run for Nurse sell for $7500. The same horse sold in the fall sale, broke and in training for $750.

Wow, that is disasterous.
Do you really think the market could be heading for that again?
Granted, I haven't been paying attention for long (only about 3 years, what a baby ) but the stud fees do seem rather crazy sometimes, especially for incoming stallions- $100,000 for first year horses like Smarty Jones and Empire Maker, and here if I remember right the great Cigar went into his breeding career for something around only $60 grand (which, of course, was never paid , but the point being...)
$225,000 for Giant's Causeway, wow...and it goes up every other month, it seems, same with FuPeg- how long can that hold? As long as there's someone with the money, I guess- but it seems like the stallion owners are going to end-up high and dry if they keep escalating.

Well I guess I totally missed the mark, too, with my first-year stallion, who won two G1 races and was on the board in 9 graded stakes and in 20 of 30 lifetime starts, retired sound at 7, etc., when I priced his stud fee at $3500.

The horse industry actually lags the Dow Jones index. Part of the crash in the late '80's had to do with out of control interest rates and the crash of the stock market. A lot of people probably took hits and got out of the business. The QH industry took the same hit in Oklahoma when the oil boom totally dropped out in the mid '80's. I believe the hiking of stud fees after only a few nice winners is probably more related to the trending of the industry toward younger and younger sires. Stallion syndicates are striking while the iron is hot as the markets have become increasingly fickle.

madelyn wrote:Well I guess I totally missed the mark, too, with my first-year stallion, who won two G1 races and was on the board in 9 graded stakes and in 20 of 30 lifetime starts, retired sound at 7, etc., when I priced his stud fee at $3500.

Who's the stallion?

Rocking Trick.

Hi Madelyn,

I think the $750,000 fee for Deputy Minister was an error in the APR, I've seen other mistakes in fees - mostly an additional '0'.

The stallions in that stratosphere at that time were Northern Dancer, Alydar an Seattle Slew.

Regards,

Pete

Hi JCBloodstock,

Welcome to the forum.

I've posted similarly about the top ended career of Awesome Again. He did get another G1 winner yesterday in Round Pond in the Acorn at Belmont. I believe your figure on the number of winners that he has is high? He began 2005 with 33% winners from foals. To be fair we should only look at his first two crops (4 and 5 year olds of 2005) and still he has only 43% winners from foals (through the end of 2004). Compare that to a stallion like Petionville who has (in his first three crops of more mature horses) 93% runners and 79% winners from foals. Petionville has a far higher pct of SWs and has performed as well or better at sales in 2004.

Adena Spings has the mare base to insure a large quality book to all of their stallions. In fact, they'll bump their own mares for paying customers but if no one will pay the fee - they'll still fill the book. Alphabet Soup is a nice race horse stallion with limited commercial appeal but Adena keeps a hard line on his fee at $20,000 because they'll fill his book if John Q. Public won't.

When you do have a proven exceptional mare (as either a race horse or producer) many farms will be willing to negotiate fees. If you can't move the mountain you need to out work and think your competition by making the most informed and well though out choices that you can. Of course Mother Nature will play her hand.

Commercial breeders make their breeding decisions based on what they believe the perception of the market is. Awesome Again hasn't been a strong sales stallion the past two years, but there's now the belief that he can and will get you an exceptional horse and that means that there will be more buyers for his foals and thus more breeders creating the foals for that market.

I never look for reason or sense in breeding. If it were a business driven by sound economics, few of us would have the ability to sell profitably. Think of the old saying, (pardons if I get it wrong) "For every window that closes another door opens." Or as Willie Sutton said, "I seen my oppatunities and I took 'em". There's a lot left on the table in this business, just look for it.

Regards,

Pete

madelyn wrote:Rocking Trick.

Sweet!!!
Very cool!!!

I was reading through the book, "Investing In Thoroughbreds- Strategies for Success" by Arnold Kirkpatrick (no, I don't expect it to help me make millions- just something to read! So don't poke fun at me! )... he eludes to the previous edition of his book, as having some of the information you might be interested in. He has some info in this version as to what happened in the 80's & the recovery (and steady growth) in the 90's until now. Might be just his theory, but I ran across it last night.

Pete wrote:Hi Madelyn,

I think the $750,000 fee for Deputy Minister was an error in the APR, I've seen other mistakes in fees - mostly an additional '0'.

The stallions in that stratosphere at that time were Northern Dancer, Alydar an Seattle Slew.

An extra zero is the only explanation that makes sense - in the BH Stallion Regs. DM was advt. at $25K for '85 & $50K for '94, LFG in both cases. It would make sense that his fee was $75K at the crest of the Bluegrass Bubble.

No fee was quoted on Slew in '85 (at Spendthrift, which became one of the first casualties of the crash in bloodstock prices). He was advt. at $80K LFG in '94 at 3C. Northern Dancer was $250K, NG, in '85 & at least 2x that his last year at stud('87?). Alydar stood for $40K LFG his first couple of years at stud ('80,'81). After the mgmt. change at Calumet I don't recall seeing his fee quoted publicly, tho' I've heard it went straight from $40K to $200K w/ the mgmt. change (and the size of his book increased exponentially). Around 1984 a southern Senator paid ~5 million to get a season to Alydar for 3 or 4 or his QH mares.

skeenan wrote:

madelyn wrote:Rocking Trick.

Sweet!!!
Very cool!!!

I was reading through the book, "Investing In Thoroughbreds- Strategies for Success" by Arnold Kirkpatrick (no, I don't expect it to help me make millions- just something to read! So don't poke fun at me! )... he eludes to the previous edition of his book, as having some of the information you might be interested in. He has some info in this version as to what happened in the 80's & the recovery (and steady growth) in the 90's until now. Might be just his theory, but I ran across it last night.

Thanks, I will look for it if it is still in print. I Love to research....

I have the earlier version - what should I look for?

Pete

I'm not sure where the info is located in his previous book. In the current version, it's Chapter 2- Yesterday, Today & Tomorrow. I read more of it last night, and it covers quite a bit of the trend the market took at that time, complete with some graphs. I thought it was pretty interesting...