Bloodstock Briefing - opinions on enhancing yearling sales

Compiled by - Jordin Rosser

The ecosystem of the Thoroughbred racing industry, like all ecosystems, requires its components to be interconnected and interdependent to be a functional system. If one of the components disappears or is compromised, the ecosystem as a whole suffers. Today, the racing industry has shown trends that the middle market is on the decline, risking a lack of market diversity. To restore the Thoroughbred racing industry ecosystem to its full potential, other areas need to be supportive – the bloodstock industry is one we can start the discussion with. 

To discuss ideas on how the bloodstock industry can strengthen the middle market, we gathered the opinions of racing secretaries, bloodstock agents, and middle market buyers. Keith Doleshel, a NYRA racing secretary, and Tracy Egan, the executive director of the New York Thoroughbred Breeding and Development Fund, bring to light the benefits of auction races to New York’s racing program. Clark Shepherd of Shepherd Equine Advisors, a well-known bloodstock agent in addition to a respected pedigree analyst, weighs in on middle market client strategies at auctions. Lastly, Charles Weston: an experienced and knowledgeable middle market buyer who has seen success over the last 30 years through partnerships and bloodstock selections. 

Q: What can the bloodstock industry do to support the middle market? 

Note: This is strictly opinion and does not reflect the stance of any organization. These points are intended to be read as conversation starters and used to fuel the discussion around what might be good for the health of the industry.

Based on the panelists’ experiences as a bloodstock agent or as a middle market buyer, they have compiled a list of suggested starting points: 

Education for New Investors 

Many new investors may be overwhelmed at the amount of knowledge required in selecting new additions to their stable, the processes of training horses, and general strategies on how to be a successful racehorse owner. Shepherd is an avid believer that the new middle market investor can learn the skills to see a horse’s “potential value” to give confidence in the process and in their agent’s decisions but only if they in turn are trained on what is expected. 

Technology Advancements

Auction houses’ ability to provide transparency and information accountability has given rise to more disclosures thereby improving information surrounding the bloodstock for sale, in turn making it more important to purchase the “right '' horse. Shepherd recommends genetic testing, cardio scans, and performance analytics to give more insight on purchasing the “right” horse, who will be both successful and profitable. 

Breed for Racehorses not Commercial Horses

Recently, breeders are becoming more “savvy” according to Shepherd with regards to breeding their bloodstock to become racehorses instead of commercial horses (meaning horses for the sales ring). Racehorse attributes include the right pedigree and conformation to be quality horses destined for the track. With the continued decrease in commercial horses, the ratio further trends towards more quality racehorses for owners to become more profitable. 

Create more ‘Coupons’

Weston affectionately calls registrations, certifications, auction races, and other nominations by the term ‘coupons’. These provide incentives for extra purse money for owners, breeders awards, and more to go into the pockets of middle market buyers and breeders. When attempting to make their bloodstock investment profitable, one strategy Weston uses is to have certifications and nominations be as geographically local as possible which allows for easy shipping between tracks for options in race conditions, incentivized purse structure, and in the case of auction races the ability to be competitive. 

Partnerships

One of the main concerns discussed amongst the industry is rising costs in training bills and initial purchase prices due to supply and demand concerns. Partnerships can provide an avenue through which buyers can own significant percentages of a horse but split the costs of ownership amongst others. A strategy Weston uses is to send his horses to a trainer who wishes to be a co-owner as it allows for the individuals’ training bill to be lowered and incentivizes the trainer to select the best racing conditions while offsetting risk.

Q: Does breeding to the sons of top stallions for less in stud fees provide a benefit to the middle market? 

A consensus was reached among the panelists indicating the profit margin is most apparent in bloodstock whose sires are sons of top stallions with the exclusion of the top freshman stallions. Due to the stud fee being cheaper, the initial cost needed to break even with respect to the stud fee as a breeder is significantly lower compared to other stallion options. Thus, when the breeder wishes to sell, the profit margin may not be as large as if the bloodstock was by a top stallion with a good conformation or movement, but it still does provide the opportunity for profit – particularly if the resulting bloodstock does have good conformation and movement. From a middle market buyer’s perspective, if a horse is purchased anywhere from $15,000 to $50,000 and requires class relief to the claiming ranks to be competitive, the purchaser is less likely to be impacted negatively as there is opportunity to offset both the initial and recurring costs.  Weston has found success with this method with many purchases he has made for himself or in partnerships inclusive of Con Lima, who was a multiple graded stakes winner earning nearly $900,000 and sired by the A.P. Indy stallion Commissioner.  

Q: If the large-scale introduction of auction races were to be implemented, how would that affect the market? 

Thoroughbred racing in Europe launched auction races into prominence with their racing programs and due to their popularity, the concept was brought to America via tracks in New York and Kentucky. Many of the benefits of these races include giving “trainers and owners who do not own expensive horses a chance to win at important venues”, an “outlet for middle market and regional stallions to sire winners in what has become a hyper competitive marketplace”, and “an opportunity to play on a level [playing] field” according to Tracy Egan. Given the overfilling of auction races in New York, Keith Doleshel believes the idea will begin to “trickle down” to other racetracks. In general, striking a balance between the different levels of racing is required to maintain a high-quality meet, and these auction races provide additional opportunities for the middle market to find success and stand out.

For the racing industry to flourish, the middle market is needed not only at the auctions but at the racetrack. If the middle market were to shrink further, the purchases of middle market horses would primarily be conducted through claiming races. Given breeding operations need a healthy profit margin to continue through auction purchases, claiming horses would only incentivize breeders to narrow their operations. Beyond this, racetracks need bloodstock at all levels to be sustainable and continue to be competitive for the racing enthusiasts, betters, and horsemen. How else can one progress otherwise, after all? Racing is a global economic engine and to preserve it, a successful middle market must exist. To do this, we must come together as a community to bring new blood into the market in a well-informed manner where the newcomers believe they have a genuine chance at success.

Golden anniversaries - The New York State Thoroughbred Breeding and Development Fund Corporation and the Jockey Club of Canada

Article by Bill Heller

The New York State Thoroughbred Breeding and Development Fund Corporation and the Jockey Club of Canada are celebrating their golden anniversaries in 2023, and both are as vibrant and vital as they have ever been.

Each organization benefited from strong leadership in its early days. Dr. Dominick DeLuke, an accomplished oral and maxillofacial surgeon in Schenectady, New York, became the first president of the New York Thoroughbred Breeders Inc. DeLuke was seldom in the spotlight while he did the grunt work of getting New York-breds more competitive. 

E.P. Taylor, the co-founder of the Jockey Club of Canada, was a legendary figure in Thoroughbred racing who is most remembered for his immortal racehorse and sire Northern Dancer. Taylor was seldom out of the spotlight. Asked of E.P. Taylor’s impact, Jockey Club of Canada Chief Steward Glenn Sikura said, “How would I do that? I think the word that comes to mind is visionary. Would we have Woodbine racetrack without E.P. Taylor? Absolutely not.” 

New York-breds – Get with the Program

How do you start improving a breeding program? You begin with incentives. Using a small percentage of handle on Thoroughbred racing in New York State and a small percentage of video lottery terminal revenue from Resorts World Casino NY at Aqueduct and at Finger Lakes, the New York State Thoroughbred Breeding and Development Fund Corporation rewards owners and breeders of registered New York-breds awards for finishing in the top four in a race and provides substantial purse money for races restricted to New York-breds. The Fund pays out $17 million annually in breeder, owner and stallion owners awards and in purse enrichment at New York’s tracks.

“If it wasn’t for the rewards program, I wouldn’t be in the business,” Dr. Jerry Bilinski of Waldorf Farm said. “The program is the best in the country in my view and it helps the vendors, feed stores and all that.”

Bilinski, the former chairman of the New York State Racing and Wagering Board, bred his first New York-bred mare, Sad Waltz, in 1974. 

He acknowledges DeLuke’s vital contribution. “Dr. DeLuke was a forefather,” Bilinski said. “I had dinner with him a number of times. He was smart. He was a smart guy. He didn’t try to reinvent the wheel.”

Instead, DeLuke, a 1941 graduate of Vanderbilt University and the Columbia University School of Dental and Oral Surgery, began breeding horses before the New York-bred program even began. He humbly visited every Kentucky farm that would receive him and asked dozens of questions about everything from breeding practices to barn construction to fencing. He learned enough to own and breed several of the fledgling New York-bred stakes winners. Divine Royalty, Vandy Sue, Dedicated Rullah and Restrainor won four runnings of the New York Futurity for two-year-olds in six years from 1974 through 1979. Restrainor also was the winner of the inaugural Damon Runyon Stakes in 1979.

DeLuke purchased a 300-acre farm in the foothill of the Adirondacks and named it Assunta Louis for his parents. Two decades later, Chester and Mary Bromans, the dominant owners of current New York-breds, many of whom have won open stakes, purchased the farm in 1995 and renamed it Chestertown. They named one of their New York-bred yearlings Chestertown, and he sold for a record $2 million as a two-year-old.

Fio Rito winning the 1981 Whitney Handicap.

Long before that, the New York-bred program needed a spark, and a valiant six-year-old gelding named Fio Rito provided a huge one in 1981. Fio Rito was literally a gray giant, 17.1 hands and 1,300 pounds. Twenty-two years before Funny Cide won the Kentucky Derby and Preakness Stakes, Fio Rito, who was owned by Ray LeCesse, a bowling alley owner in Rochester, and trained by Mike Ferraro, who is still going strongly at the age of 83, Fio Rito put his love of Saratoga Race Course to the test in the Gr.1 Whitney Handicap. A legend at Finger Lakes, where he won 19 of 27 starts, he had posted four victories and a second in five prior Saratoga starts.

He almost didn’t make the Whitney. Two days before the race, Fio Rito, who had won his four prior starts, injured his left front foot. It wasn’t serious. But the competition was. Even though there had been three significant scratches—Temperence Hill, Glorious Song and Amber Pass—he was taking on Winter’s Tale, Noble Nashua and Ring of Light.

Fio Rito winning the 1981 Whitney Handicap.

Ridden by Finger Lakes superstar Les Hulet, Fio Rito broke through the starting gate before the start, usually a recipe for disaster. But assistant starter Jim Tsitsiragos, held on to Fio Rito’s reins and didn’t let Fio Rito get away. 

Though pushed on the lead every step of the way, Fio Rito held off Winter’s Tale to win by a neck in 1:48, just one second off Tri Jet’s track record and the fourth fastest in the Whitney’s illustrious history.

“TV and the media made sort of a big deal for a horse to come from Finger Lakes and be a New York-bred too,” Ferraro said. “It was kind of exciting for us to even compete in that race.”

The following year, another New York-bred, Cupecoy’s Joy, won the Gr.1 Mother Goose Stakes.

Still, New York-breds had a long way to go to be really competitive against top open company.

In 1992, Saratoga Dew won the Gr.1 Beldame and became the first New York-bred to win an Eclipse Award as Three-Year-Old Filly Champion.

In 1992 Saratoga Dew became the first New York-bred horse to win an Eclipse Award.

Two years later, Fourstardave completed a feat which may never be approached let alone topped. He won a race at Saratoga for the eighth straight year. Think about that. It’s the safest record in all of sports. Three years earlier, Fourstardave’s full brother, Fourstars Allstar, won the Irish Two Thousand Guineas.

And then came Funny Cide with Jack Knowlton and Sackatoga Stable, trainer Barclay Tagg, Hall of Fame jockey Jose Santos and a yellow school bus. Funny Cide was born at Joe and Anne McMahon’s farm, McMahon of Saratoga Thoroughbreds.

The McMahons, 76-year-old Joe and 73-year-old Anne, have been breeding, raising and racing horses before the New York-bred program started. They now boast a 400-acre farm with some 300 horses including 70 of their mares, 70 other mares, stallions including their star Central Banker, yearlings and foals.

“We’re very proud of what we accomplished,” Joe McMahon said. “It feels very good. It’s something we focused on for 50 years. With all the farms that have come and gone, it’s amazing that we’re still here.”

Now they have their three children helping run the business. They had nobody when they started.

A wedding present from Anne’s father allowed them to buy their farm in 1970. “It was hard,” McMahon said. “There wasn’t any interest.”

Slowly, the New York-bred program created interest. The McMahons did everything they could to help, successfully lobbying for changing the residency rules for mares in New York and beginning the New York-bred Preferred Sales. “I recruited the horses for the New York-bred sales,” McMahon said. “I’m very proud of that because that changed the whole business. It created a market. It was the early ‘90s. That was a real-game changer, and it is today.”

Central Banker with Corey Nakatani up win the 2014 Churchill Downs Stakes.

Today, the McMahons stand Central Banker, the leading stakes sire outside of Kentucky. “We went from breeding $1,000 stallions in New York to standing the best horse out of Kentucky,” McMahon said. “That’s a huge thing. He and Freud are the most successful stallions in New York.”

He continued, “We should be the poster child for the breeding program because we didn’t have anything starting out. Everything we got, we literally put back in the game. We continue to operate. I thought that was the purpose of the program: to maintain agricultural land that otherwise would have been developed commercially.”

Funny Cide was a turning point. “Funny Cide was a real game-changer for the whole industry,” McMahon said. “It was like an impossible dream come true. It was remarkable that a New York-bred won the Kentucky Derby.”

It was also remarkable what his jockey said after winning the race.   

At the time of the 2003 Kentucky Derby, there had been a popular television commercial sponsored by the New York Thoroughbred Breeders, Inc., trumpeting the rich award program of New York State. After Funny Cide won the 2003 Kentucky Derby, commentator Donna Barton on horseback was the first person to interview Santos. She said, “You’re very happy about winning the Derby.” Jose replied with the catchline of the TV Commercial, “Get with the program, New York-breds.” Years later, Santos said, “I don’t even know how it came out of me. That surprised me when I heard it.”

Funny Cide added the 2003 Gr.1 Preakness Stakes and the 2004 Gr.1 Jockey Club Gold Cup. 

Tiz the Law wins the 2020 Belmont Stakes.

A steady stream of accomplished New York-breds, including 2006 Gr.1 Beldame Stakes winner Fleet Indian and two-time Gr.1 Whitney winner Commentator (in 2005 and 2008) followed, before New York-breds provided more jolts. Mind Your Biscuits, the all-time leading New York-bred earner ($4,279,566), captured the 2018 Gr.1 Golden Shaheen in Dubai. That summer, Diversify added his name to the list of Whitney winners.

In 2019, Sackatoga Stable and Barclay Tagg’s Tiz the Law began his sensational two-year career by winning his debut at Saratoga. He added the Gr.1 Champagne, then dominated in both the 2020 Gr.1 Belmont Stakes—the first leg in the revised Triple Crown because of Covid—and the Gr.1 Travers Stakes. He was then a game second to Authentic in the Gr.1 Kentucky Derby.

“When people buy a New York-bred, they hope he can be the next Funny Cide or Tiz the Law,” Fund Executive Director Tracy Egan said. “I think it’s the best program in the country.”

That doesn’t mean it’s been a smooth journey. “It’s been a bumpy road,” former New York Racing Association CEO and long-time New York owner and breeder Barry Schwartz said. “There were so many changes. But I think today they’re on a very good path. I think the guy they have in there (New York Thoroughbred Breeders Inc. Executive Director Najja Thompson) is pretty good. Clearly, it’s the best breeding program in America.”

Thompson said, “The program rose from humble beginnings to today when we see New York-breds compete at the highest level.”

Certainly the New York Racing Association supports the New York-bred program. One Showcase Day of all New York-bred stakes races has grown into three annually. “NYRA has been a great partner in showcasing New York-breds,” Thompson said. “We make up 35 percent of all the races at NYRA.” 

There’s a great indication of how New York-breds are perceived around the world. Both the third and fifth highest New York-bred earners, A Shin Forward ($3,416,216) and Moanin ($2,875,508) raced exclusively in Asia. A Shin Forward made 25 of 26 career starts in Japan—the other when he was fourth in a 2010 Gr.1 stakes in Hong Kong. Moanin made 23 of his 24 starts in Japan and one in Korea, a 2018 Gr.1 stakes.

Mind Control ridden by John Velazquez wins the 2018 Hopeful Stakes at Saratoga Race Course.

This year, new stallion Mind Control, who won more than $2.1 million, brought together three New York farms together: Rocknridge Stud, where Mind Control stands, Irish Hill and Dutchess Views Stallions. Mind Control’s strong stallion fee of $8,500 certainly reflects confidence in the New York-bred program.

“If you look at the quality of New York-bred horses, it just proves that it’s a success,” Bilinski said. “We’re never going to be Kentucky, but we’ll be the best we can in New York. It’s improved by leaps and bounds.”

Thompson concluded, “Anyone there at the start of the program would be proud of where we are now.” 

The Jockey Club of Canada – Great Timing

Northern Dancer, Bill Hartack up, and E.P. Taylor after the 1964 Kentucky Derby win.

If timing is everything, then E.P. Taylor and his nine co-founders, knocked the formation of the Jockey Club of Canada out of the park. The Jockey Club came to life on Oct. 23, 1973, and its board of stewards were announced Oct. 27.

The very next day, the entire racing world was focused on Canada, specifically at Woodbine, where 1973 Triple Crown Champion Secretariat made the final start of his two-year career. Racing under Eddie Maple—a last-second replacement when jockey Ron Turcotte chose not to delay a suspension in New York, costing him the mount—Secretariat aired by 6 ½ lengths in the Canadian International as the 1-5 favorite.

At its initial meeting, Taylor was elected the Jockey Club’s Chairman of the Board and Chief Steward.

The other eight founders were Colonel, Charles “Bud” Baker, George Hendrie, Richard A.N. Bonnycastle, George Frostad, C.J. “Jack” Jackson and J.E. Frowde Seagram.

“These people were all very successful at what they did,” Jim Bannon, a Thoroughbred commentator who is in the Canadian Hall of Fame, said. “They were great business people who had a great sense of adventure and got in early when it was time for the Jockey Club. They were all gung-ho to be there. I think we got the best of the best right at the beginning. They were great enthusiasts, all of them. They saw E.P. Taylor’s success, and they were glad to join him.”

Edward Plunket Taylor was the first Canadian to be made a member of the United States Jockey Club in 1953 and also the first Canadian to be elected president of the Thoroughbred Racing Association in 1964. In 1973, he was named North America’s Man of the Year. He won Two Eclipse Championships as Outstanding Breeder in 1977 and 1983.

Northern Dancer with trainer Horatio Luro, Keeneland,1964.

Of course, by then, Northern Dancer’s brilliance on and off the track had been well documented. On the track, Northern Dancer won 14 of 18 starts, including the Gr.1 Kentucky Derby and Preakness Stakes, with two seconds and a pair of thirds including his six-length defeat by Quadrangle in the 1964 Belmont Stakes. Northern Dancer more than atoned in his following start, winning the Queen’s Plate by 7 ¼ lengths as the 1-10 favorite. Taylor won the Queen’s Plate 11 times under his own name or Windfields Farm and bred 22 winners of Canada’s signature stakes. But Northern Dancer bowed a tendon shortly after winning the 1964 Queen’s Plate and was retired.

Initially, Northern Dancer’s stud fee at Windfields Farm in Maryland was $10,000. That changed quickly in 1967 when his first seven sales yearlings all won. Five of them won stakes. Northern Dancer’s stud fee was up to $100,000 in 1980 and climbed to $200,000 just two years later.

Northern Dancer sired 146 stakes winners, including several who went on to be great stallions themselves including Lyphard, Nijinsky II, Nureyev, Danzig, The Minstrel, Sadler’s Wells, Storm Bird, Vice Regent and Be My Guest. “Of all my father’s accomplishments in racing and breeding, I believe he was most proud of having established the Northern Dancer sire line,” Taylor’s son, Charles, said in the book Champions.

Taylor’s impact on Canadian racing can’t be overstated. He consolidated Canada’s seven tracks to three, improving Fort Erie and Old Woodbine/Greenwood and building a new Woodbine. “Without Mr. Taylor, Canadian racing would not be!” Hall of Fame trainer Frank Merrill said.    

In 1973, Taylor resigned as the Chairman of the Ontario Jockey Club to head the Jockey Club of Canada. “We’ve never had a national Jockey Club before,” Taylor said at the time. “We felt it was important to Canadian racing to have this kind of organization, which could address important racing issues of the day.”

 Fifty years later, the Jockey Club is still leading Canadian racing. Its current membership tops 100 with owners, breeders, trainers and key industry stakeholders.

Among its duties are conducting the annual Sovereign Awards; annually designating graded stakes; working to improve federal tax guidelines for owners and representing Canada at the annual International Federation of Horse Racing Authorities Conference.

“There are a lot of running parts,” trainer and Jockey Club member Kevin Attard said. “It kind of opens your eyes to a different part of racing from a trainer’s perspective. There’s a lot of things that go on a daily basis to have the product we have and put on the best show possible.”

Hall of Fame trainer Mark Casse, also a member of the Jockey Club, said, “It’s a great organization. It’s always trying to do what’s best for horse racing.”

That means continuing the battle for tax relief. “This is something that is extremely important to the Canadian horse owners and breeders,” Casse said. “It’s definitely the number-one priority.”

Sikura, who is also the owner of Hill ‘n’ Dale Farm Canada, said, “Fighting to get tax equity has been a battle for decades. We haven’t made major strides, but that won’t mean we stop trying. It doesn’t compare favorably to other businesses.’’

Asked about progress on that issue, he said, “We’re marginally better off.”

In general, Sikura said, “I think we have the same challenges most jurisdictions have. I’m cautiously optimistic. It’s always been an uphill battle, but horse racing people are a resilient group.”