Thoroughbred Sales Incentives - added value
With global inflation rising, mare owners as well as sales consignors and buyers may be looking harder than ever for perks to plump up their equine investments.
by Annie Lambert
Arguably one of the greatest promoters in history was P.T. Barnum, most remembered for creating the Barnum & Bailey circus, “The Greatest Show on Earth.” Barnum grew up in 1800s America with a natural talent toward publicity and promotion.
Modern-time promotion is more likely to be called marketing. It won’t have all the bells, whistles, fireworks and grifting used by Barnum, but it still requires limitless imagination. Stallion promoters and sales companies in North America and globally have developed marketing programs to entice customers in their competitive markets.
Interested parties can choose from deals on stallion shares, buy auctioned horses with eligibility to restricted races and more.
Advantage breeders
Some breeding farms have put together attractive programs to draw the owners of quality mares to their stallions.
Spendthrift Farm (Lexington, Ky.) provides two options to breeders. Their programs include Share the Upside and Safe Bet.
Share the Upside has been a great program for Spendthrift Farm, according to Ned Toffey, the farm’s general manager.
“You breed a mare in each of the first two years the stallion is at stud, and once your mare has produced two live foals, and you’ve paid your stud fees in a timely manner, you have then earned a lifetime breeding right,” he explained. “After that you breed to the horse free (no charge) for the rest of his breeding career.
“Into Mischief was one of the first horses that we offered on this program, and people paid in the vicinity of $6,500, two years in a row to earn a lifetime breeding, which is now worth $1 million.” “That’s the ultimate example; not every horse is going to be a two-time leading sire,” he added with a laugh.
Ned Toffey - Into Mischief
Toffey explained that the program has helped smaller breeders who are often priced out when stallions become successful. Share the Upside helps those breeders, who helped make the horse successful, by allowing them the opportunity to utilize the horse throughout his career.
While first-year stallions generally don’t need incentives to attract mares, the hope is that they will use that stallion in subsequent years.
Which stallions are offered in the program depends on the market economics at the time. Toffey finds that the $15,000 and under fee levels of the market appreciate, and he enjoys using the program. It is not as appealing to some of the higher-end breeders. Mares are approved for the first two paid breedings, but once owners have earned lifetime rights, they may breed any mare.
“Our hope is that, since people have a vested interest in the horse’s success, that they are going to support him with quality mares,” Toffey acknowledged. “We try to always have some Share the Upside horses for our breeders to be able to utilize.”
The stallions offered for 2022 have not been decided on yet. Spendthrift holds breeding rights in a number of horses, but it is unclear if those will be coming into stud or remain in training. It is a little early.
Spendthrift’s other program option is not geared toward freshman sires, but rather their first crop of two-year-olds. If a breeder sends a mare to the stallion the year his first offspring are two, the contract has two options.
If the stallion does not produce a graded stakes winner by the end of that calendar year, then there is no stud fee owed. If the stallion does produce a graded stakes winner by the end of the year, then the mare owner would owe the agreed upon/advertised stud fee.
“The idea is to try and incentivize breeders who may like a horse but may be apprehensive about using the horse who is unproven,” Toffey explained. “This gives them a reward for taking a chance on one of our horses. If the horse works out, then they owe a very reasonable stud fee; if the horse doesn’t have a very good year, even though he may throw some listed stakes winners, he may throw graded stakes placed horses. But if that is all he does, then there would be no stud fee owed. But once he produces a graded stakes winner, the full fee would be owed.”
Bob Feld’s Bobfeld Bloodstock took advantage of Spendthrift’s Share the Upside program and now has a lifetime breeding right to Temple City. Feld bred and campaigned Miss Temple City’s daughter of Temple City—a winner of three Gr. 1 stakes with earnings of $1,680,091. She sold at the 2017 Fasig-Tipton November sale for $2.5 million.
Miss Temple City - Bob Feld
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Sales protocol after COVID-19
By Jeff Lowe
Adapting to the new world with COVID-19 has led to a rapid integration of online bidding for Thoroughbred auctions across North America, presenting sale companies and consignors with a new challenge to supply potential buyers with enough information and technology for them to feel comfortable making a winning bid from afar.
Keeneland, Fasig-Tipton and Ocala Breeders' Sale Co. (OBS) all added online bidding platforms by the time the sales calendar relaunched this summer after more than two months of dormancy, with sales either canceled or postponed during the height of pandemic restrictions in April and May. Regional sales scheduled for later in the year in Ohio and Ontario also moved toward a more flexible format with the option of online bidding.
OBS was the guinea pig on two fronts amid COVID-19's impact. The sale company pushed forward with the OBS March sale of two-year-olds in training on March 17 and 18, which was right in the middle of lockdown announcements and steep stock market declines. The sale company did not yet have online bidding capabilities, but that would change by the time the OBS spring sale of two-year-olds in training took place from June 9-12.
"We had a couple of months between sales to get the technology up and running for online bidding and it sure seemed necessary," OBS Sales Director Tod Wojciechowski said. "In the March sale, we just needed to get through it and do what we could to move horses along during a very tumultuous time, and then regroup for the sales this summer. COVID-19 was certainly a catalyst to bringing online bidding to market quicker. We had talked about doing it previously but with the pandemic, we felt we needed to get it up and running as quickly as we could."
OBS relied on Xcira, a Tampa-based provider of auction software and technologies, to introduce online bidding functions to the OBSSale.com website in time for the spring sale. As it turned out, that sale occurred just as many COVID-19-related restrictions were being lifted.
"We had a boost in buyer attendance from the timing there, but then in July we were back with the sale coming up when there was a big spike around us in COVID cases, and online bidding helped fill that gap in attendance," Wojciechowski said.
Of the 517 horses that changed hands in the July sale, 72 of them (14 percent) were sold through online bidding.
Fasig-Tipton also made a quick move to online bidding for its revised auction calendar, beginning with the Midlantic two-year-olds in training sale in Timonium, Maryland, on June 29 and 30 (with Fasig-Tipton reporting 15 horses were sold online) and continuing with an even greater emphasis on a remote marketplace in the July horses of racing age sale.
Fasig-Tipton’s coronavirus protocols and precautions in place.
This was the eighth edition of the July horses of racing age sale and the first time it was conducted without an accompanying yearling sale. According to Fasig-Tipton CEO Boyd Browning, more than 100 people registered to make online bids for the sale, and 45 of them followed through with submitting bids. Seven horses were sold to online bidders.
"With everything else going on in the world, we were certainly glad we added that capability for buyers to participate," Browning said. "In addition to the horses who sold to online bidders, those buyers also were immediate underbidders and second underbidders in a number of cases. There was an activity at all levels and all price ranges too.
"A horses of racing age sale lends itself to online bidding; buyers can see past performances and past races and they have a lot to go on. We'll be moving into the yearling sales and that's a little different. We'll be providing walking videos for every horse that the consignors want to do it. We'll be strongly encouraging them to do it. We'll work with them to provide the services ourselves or provide a stipend if they want to use their own vendor."
Keeneland took online sale capabilities one step further by adding a new Digital Sales Ring platform that debuted on June 23 with a horses of racing age sale that was conducted entirely online, with technology developed by Horseco. Only 12 of the 38 horses cataloged changed hands, with a filly named Trapezium selling from Juddmonte Farms' consignment to St. Elias Stable for $327,000 as the top price.
Keeneland officials are planning to add new online and phone bidding technology to the traditional live sale formats for the Keeneland September yearling sale and November breeding stock sales this fall, especially in light of international travel restrictions. Still, Keeneland does hope to have some international buyers in attendance. …
