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Breeder Says Stallion Fees Need Revisiting

'We need more sales companies'

There’s no secret that at Heversham Park we are continuously attempting to upgrade our broodmare band and our stallion offerings.

Over the past three years we have been searching and considering stallion prospects from all corners of the globe, writes Nigel Riley.

Nigel Riley – gives his opinion

One of the rather alarming factors in our search is that on many occasions we have been offered the same horse at vastly different prices by different Bloodstock agents; leading me to believe that I have a rather large – but only visible to a select few sellers of horses) expletive starting with the letter “C” tattooed on my forehead.

The results of the recent TBA yearling sales must also place in question the appropriateness of the current various stallions advertised fees.

There is no doubt that a mere handful of breeders cannot produce enough stock to satisfy the demands of the South African racing market, and as such the smaller commercial breeders must also have a place in the industry.

However excessive stallion fees, together with the high costs of selling yearlings and poor sales returns have, in my opinion, been one of the primary causes of the demise of many of this country’s breeders.

I am well aware that the high cost of selling yearlings in this country is one of respected bloodstock agent David Allan’s well considered gripes, and I can only wholeheartedly agree with him in this regard.

The reality in the present situation is that whether the vendors sell their offered horses or not, and regardless of whether the sales companies have properly marketed the sales; the sales companies still earn substantial commissions.

It is for this reason that it is imperative to buyers, breeders and sellers of horses that there is a multiplicity of sales companies, and that such sales companies are independent entities competing against each other.

The present system of commissions on reserve prices means that the sales companies financially benefit regardless of whether a vendor’s horse is sold or not, therefore they have no “skin in the game”, as they are in a “win win situation” with no downside for themselves.

Nigel chats to the TBA’s Catherine Hartley

This can never be a commercially acceptable situation and as such, especially in the present difficult times that the industry is experiencing, must be reconsidered. I also do not believe that presently the two big sales companies compete against each other in the truest sense of the word as it appears that they have entered into some type of agreement as to which of them sells, where and when.

Anyway I shall leave that issue to my much more experienced friend Mr Allan and instead share my thoughts and experiences on buying a stallion.

At Heversham we have discovered that determining what will make a good stallion is a complex operation.

First of all you have to work out whether the stallion is going to be popular enough that breeders will send mares to him because without the mares he’s not going to make it. That means he has to have a popular pedigree, be good looking and so will get good looking foals. He has to be a good enough racehorse to attract people as well. All of these requirements have to be subject to a balancing act and that is only to get people to send mares to him initially.

Then you have got to buy him at the right price that financially it makes sense. And that you can stand the stallion at a fee that enables people to make money out of him as well.

All of that before you go anywhere near trying to work out whether he can actually be a good stallion or not, which is at the end of the day the most important thing but constitutes the great unknown.

To do that, in my opinion he has got to be the best performed racehorse you can find at the price you can afford. There is no surprise that Jet Master and Dynasty were brilliant stallions because they were both brilliant race horses.

However, pedigree is important too. At Heversham we demand a sire line that works, but just as important for us is a dam line that works too.

Physically he has got to be able to get physical horses that look like they can run and furthermore, very importantly, a thing that often gets forgotten, he has got to get the proper temperament in his offspring.

All in all a piece of cake (not).

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4 comments on “Breeder Says Stallion Fees Need Revisiting

  1. Terry Lowe says:

    Nigel it’s impossible to prove a stallion in Gauteng. Use the only proven and commercial one on your doorstep at a very fair price.

  2. Steve Reid says:

    Nigel a few years ago I mooted the idea of reserve prices being publicly displayed on the doors of the stables of lots consigned at the sale. This had merit in my opinion for two major reasons viz, the battlers like me would not bother wasting the time of the vendor by inspecting the horse on offer should it be above my budget, and secondly, and just as important, the auctioneer could start the bidding at the advertised reserve, without time wasting going through the motions of finding the inevitable starting bid at the minimum price allowed. In theory this would speed up the sale and eliminate the reserve not met scenario.

    In my humble opinion, a flat rate charged by the sales companies could be looked at. If a reserve is not met, surely a lower commission would be applicable? However, by the same token, if a lot achieves a better than expected return, surely a higher commission could be applicable?

    As an aside, I have bought horses for close on 25 years. Every single one of the unraced horses have come from an auction. Surely to goodness there is opportunity in marketing your horses to owners directly, and thus eliminating the added expenses?

  3. Ian Jayes says:

    About thirty or so years ago I proposed the introduction of a Breeders Premium where the breeder would get a share of the horses’ stake-earnigs. Horses could then be sold without reserve and if a breeder bred a decent horse he would be rewarded over and above what he sold it for.

    1. karel says:

      Cape Breeders operated such a scheme for a few years in the late Eighties (? or thereabouts).
      Monies earned were supposed to be for re-investment in bloodstock.
      Then the money ran out.

      France still has sizeable breeders premiums.
      FOR FLAT RACES – IN FRANCE
      15% in open races, where owners’ premiums apply, for horses by a stallion based in France (otherwise 10%).
      19% in races restricted to French bred horses by a stallion based in France (otherwise 14%).
      21% for French bred AQPS, Arab and Anglo-Arab horses by a stallion based in France (otherwise 16%).

      FOR FLAT RACES – OVERSEAS RACES
      15% This only applies to winners of Group races (part 1 International Cataloguing Standards & Groups reserved to Purebred Arabians), with an annual limit of €15,000 per horse providing that the horse is by a stallion based in France (otherwise 10%).

      And what about the Breeder’s Premiums in KZN? Would that Province still have breeders without the incentive?

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