I’ve had my lovely UK family over for a recent visit and after all the stories about my horses (not to mention the exciting and bulky packages they’d had to courier for me), a visit to the stables had been added to their itinerary well before they arrived.
The English contingent are entirely charming, but possess one great fault – they are not horse mad. However, I do not see that as an irredeemable fault and am working on it. I took them to view the riding horses (who were thoroughly unappreciative and squashed my brother in law into a gate). With my colt’s debut imminent, we also visited the race yards (although in my wisdom, I scheduled an afternoon visit, rather than an early morning’s trek to gallops – I am not as stupid as I look !).
One of the questions that non-horse people seem compelled to ask (and my family may have more of a vested interest than most), is how much is a horse worth.
It’s quite a niggly question and one that is difficult to answer.
According to the NYS stats, a yearling is currently worth anywhere from R1.7m to R50k (if anything at all), with the average selling price being R233,172. Although down on last year, the aggregate from the sale came to rest at a cool R86,740,000.
With the sale following hot on the heels of the report on Phumelela’s trading results to end January and coinciding with one of the busiest racing weekends of the year, it gives one rather more food for thought than usual.
Champions Weekend
Champions Weekend threw up a number of upsets and seemingly inexplicable results that will no doubt have trainers and connections scratching their heads. Others franked their form, warming the hearts of punters and tipsters by running true to their bloodlines and abilities, including Aussie Sheila Black Caviar, who eased her way to her 20th victory, the world now very much her oyster. There was also cause for celebration in the upset camps, with the win from Kimberey’s bolt from the blue, King’s Temptress in the SA Fillies Nursery, sure to live on in racing folklore for years to come. Add all this into the mix and you probably prompted a few people to take another long, hard look at the NYS sale lots for Sunday… !
Financial Results
Alec Hogg conducted an interesting and enlightening interview with Phumelela CEO Riaan du Plessis, who ran through a summary of the operators’ financials to the end of January 2012. According to the numbers, the operators spend R608million on ‘putting on the show’ on an annual basis. Of that sum, R300m is prize money and the R308m is spent maintaining facilities, subsidising transport, training, paying salaries, etc. If I’ve understood it correctly, the operators receive a contribution from bookmakers (via a bookmaker levy) to the tune of R75m, so it would seem that ‘the show’ costs the operator around R523million on an annual basis. That’s quite a sum of money and one starts to feel quite sorry for the beleaguered operator.
Until we consider some other numbers.
As a fun little exercise, I’ve added together the aggregates of the two Cape Premier Yearling Sales (R117,210,000 for book 1 and R27,493,000 for book 2) and the NYS (R86,740,000), it comes to a grand total of R231,443,000. And those are just the bigger yearling sale stats.
Furthermore, the SA Racing Fact Book states that there are somewhere in excess of 7000 individual runners on an annual basis, which, at a rate of around R90-R100k per year in training / vet / transport / etc fees, adds another R700,000,000. For those of you as staggered by all those zeros as I was, that’s R700million. Which means that you and I Joe Public fund the industry to the tune of R700million in training fees alone.
(Punters, I’m not deliberately ignoring you – just trying to draw some direct comparisons here).
So it costs the operators around R608 million (before the bookmaker levy) to run the show. It seems to cost owners nearly double that to provide the cannon fodder that provides the betting product. And we know from Mr du Plessis’ stats that the operator pays out around R300m in stakes.
Without getting myself into trouble, I have some rather strong opinions about that !
What those stats tell me….
Firstly it tells me the owners must be bloody crazy to even contemplate getting into the business. Anyone with half brain can work out that an investment of R931million for a return of R300million does not make a lot of sense. And yet we do it anyway.
The second thing it tells me is that our owners are unbelievably passionate and supportive of the industry, even in the face of those crazy odds.
So it brings me back to my original question – what is a horse worth ? Well, I can tell you what it costs, but I guess it’s up to each of us to work out the individual worth of a horse and what they mean to us personally. However, the bald facts seem to say that despite the trials and tribulations, they mean a lot. An awful lot indeed. And that pleases me, because I believe that horses are a little bit of magic.
As Rebecca Carroll once said – ‘A pony is a childhood dream; a horse is an adult treasure’.
