By Ulf Lindström
As harness-racing fans turn their gaze to the Meadowlands for the 90th edition of the Hambletonian Stakes some will train their eyes on horses that finish behind the winner.
Since 2001, and Scarlet Knight's victory as the only European trained horse, 14 stallions in the beaten field have found their ways straight to Sweden and stud service on location. Of course, other horses in the line-up of the finals have also left their progeny in Sweden and elsewhere in Europe. But this population of 14 is exclusive in the sense that they were picked up before anyone had had a chance to evaluate the offspring ahead of importation. In other words, a business venture of considerable risk.
This analysis asks whether the 14 turned out to be a profitable investment for the owners and also whether the customers - the breeders - were lucky to book their broodmares to the Hambletonian finalists. The case is Sweden, but is basically relevant across the board for other countries in Europe (France excluded) and Oceania, at least in the sense that, genetically, they have a similar population of bloodstock. But since the market for stud service is substantially smaller in other Nordic countries and Central Europe, the computations are not applicanble outside Sweden.
A survey among people "in the know" suggests that, in the '00s, a stallion cost 500,000 euro. For the most recent years the price is more likely to be 300,000 euro - give and take 100,000 for factors beyond worthwhile conjecture.
Number of foals and stud fees, checked for costs, give the intial calculi that, of the 14 imported stallions, 6 have left the owners with a profit, 3 have broke even and 5 have set the investors back. In particular, Mr Pine Chip and Flirtin Man turned out to become profitable ventures..
The Statistics
Gross earnings from stud fees are far from what the owners collect at the end of the foaling season. Deductions are plenty, costly and opaque. Listed as a time-line from the moment the stallions disembark and put their feet on the ground, deductions nos 4, 5 och 10 are the principal ones:
1. Insurance, 2 percent of valuation of stallion.
2. Official stallion grading, SEK 15,000 for 2015.
3. Interest, 2 years until first stud fees paid.
4. Marketing, website, ads in industry publications, mail prospects, posters at tracks.
5. Discount on stud fees, like multiple bookings, by performance of broodmares, full siblings, etc.
6. Stabling, meant to be
covered by booking fees. However, with few full books, the revenue for the host
farms not sufficient, meaning compensation to
farm owners in the form of
additional discount for the farm's own
broodmares, etc.
7. Annual fee for Breeders' Crown, SEK 15,000 and 2 percent of stud fees on booked broodmares (not live foals).
8. Breeding certificate for season, Svensk Travsport, SEK 8,750 for 2015.
9. Veterinary bills and other expenses.
10. Non-payment, or insufficient payment, of stud fees.
Again, we're operating with estimates: the combined deductions would land in the range of 25-40 percent of gross revenues , the heaviest cost as discounts on and non-payment of full stud fees. (Fees paid by breeders registering their offspring outside Sweden not included in the calculi above)
Still, buying stallions among the beaten field of the Hambletonian is likely to be good business. True, some projects have gone really in the red, but considering harness-racing economics overall, the prospects of owning a stallion are fair enough.
What about the breeders, and the bloodstock industry in general? Who's on the receiving and giving end?
The breeders, owners of broodmares, are those who risk more than any other players in the industry. Their curiosity for new and successful offspring is costing them dearly. Reason, plain reason, would tell the breeders to book their mares to proven sires, like those listed among the 5 to 10 top performers in the annual statistics. Having said that, the offspring of sires like Mr Pine Chip and Make It Happen have returned nice breeders' premium to the broodmare owners. And, of course, all offspring born 2010 and later, like those by Symphonic Hanover and Judge Joe, still have their careers ahead of them.
Considering the alternatives, what is good advice at the end of the day? Frozen semen from Hambo winners? Fine, but the cost is accordingly and there's no guarantee for success. (No need to rub it in by naming names.)
The European industry needs to replenish its bloodstock, continuously. A less than top performing sire may become a golden grandsire, and the fortunate out-crossings with the French TF are welcome, among them "The Big V's" and hopefully their sons.
Now, that'll be the day when we stop being curious about the imports of Hambo finalists.
So, for those who are toying with the idea of calling bloodstock agents immediately after the race on Saturday, the advice is to also buy the American business concept. Put the stallion at stud for 3 to 5 seasons, but be prepared to call it a day if the offspring have not met with interest at sales and not performed overly well in the stakes for 2 and 3 year olds. Initial success means everything in terms of keeping the stud fee up, not offering discounts, refusing deals on non-payments, etc. If the first crops only do average or worse, offload the stallion to markets in the lower divisions of European trotting. There they may still draw interest since most sires at least have a couple of lucky shots from among their first crops.
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