Losing faith and patience in a syndicate owned stallion?
There is a thread going on another board about why syndicate members bail out or lose faith in a stallion they are partners in and this response I found very very interesting:
One is how many paid stud fee's the syndicate owners are getting.
Another is lack of syndicate owners actually breeding their own mares to the stallions they own shares in.
And the major one is how some of these farms rape syndicate owners.
I had a client call me one time wanting to give away 3 shares in a decent old hard - knocking stallion. He was up in age but still was standing for $6500 if I remember right. This was a 40 share syndicate that was getting charged about $4,000 a year per share for care, stallion promotion and advertising plus the farm was taking a huge cut of every paid stud fee, those 3 shares were costing him $12,000 a year, he offered them for sale to the other syndicate members and there was nary an offer for them.
I had NO idea at all that if you bought shares in a stallion you were then charged a yearly upkeep / management / promotional fee on him as well! To the tune of $160,000 annually / collectively on this particular stallion as well! Plus the farm took a hefty cut off any paid stud fees that came in to him as well!
Is this just the TB racing industry or is this how it works in Sport Horse breeding circles as well???
Sheesh ... there must be an awful lot of disallusioned syndicate owners out there if this goes on all the time ...
Clarksdale, MS--the golden buckle on the cotton belt
Of course you would be charged part of the expenses if you were a partner. Seems to me that's elementary. I believe in the TB world that most people buy into a stallion because they want the right to have guaranteed breedings to him. Buy into the stallion, pay your part of the expenses, and sell your breedings or use them yourself.
It would make no sense to me for the stallion statio to take a cut of any stud fees that your breedings brought you, but the ones to the general public should be a matter of contract between the syndicate and the station.
But that brings up an interesting point. What happens to the stallion if he is a bust at breeding?
"I'm a lumberjack, and I'm okay." Thread killer Extraordinaire
$160,000 isn't too far fetched, especially at a smaller farm that doesn't pro-rate the advertising between all of the stallions. I've been offered a share in newly-retired stallion where they were estimating annual costs at $200-300,000. The boarding usually runs $45k/yr, the farm receives breeding rights for the stallion management and the advertising is the bulk of the expense. They expect this particular stallion to stand for $20k or $25k.
Intersting that they are taking a cut of the stud fees. I am guessing that the farm isn't obligated to sell the shareholder seasons of this particular stallion, so they are acting as a bloodstock agent, therefore, taking a commission (ususally 5%) from everything that they sell.
The majority of people buying into a stallion do so as an investment (such as myself). I don't think it has much to do with guaranteed breedings, as if your mare is not good enough to be accepted to the stallion, you certainly wouldn't want to breed that mare on your season. As partial owner of the stallion, you would want him to have the best book available for the highest chance of success.
I have no idea how Sport Stallions are syndicated, but I would assume they would have to cover expenses as well.
That's pretty reasonable for the racing scene. When the horse is running they are usually costing you money. Race horses well most horses actually start life off in debt. Depending on the horse depends on where your debt starts. Once they retire out of racing (Hopefully sound and sane) they have a chance to make it back for you in the shed or in another career.
Repo cost just for the mare may cost upwards of 50k and that didn't include the stud fee. That was just to get her prepped and shipped to wherever romeo is standing. Add the cost of prepping for Auction or training then more shipping and more fees and yeah its amazing how much those darlings cost.
Smaller scene I am far more familiar with is Western showing. Not nearly as expensive as racing but there were some years when I wondered if we could keep it up. Thankfully I had awesome friends and family that helped out and kept costs down. Now as an adult I am truly amazed at how we did it!
Adoring fan of A Fine Romance
Originally Posted by alicen:
What serious breeder would think that a horse at that performance level is push button? Even so, that's still a lot of buttons to push.