Two tiers I cry: registration fees v. breeder fees - #1 Horse Racing Forum in Australia for Race-Horse News

Peter Mair

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Original Post 2012-Jan-09, 06:40 AM

Two tiers I cry: registration fees v. breeder fees

There is a useful story in the SMH this morning:

Breeding levy a workable answer to fund prizemoney growth -- and the full story is here:

http://www.smh.com.au/sport/horseracing/breeding-levy-a-workable-answer-to-fund-prizemoney-growth-20120108-1pq42.html#ixzz1ito8Xae3

In a nice illustration of the conflicting interests facing RacingNSW, it notes:

''You have to remember that breeders own about 60 per cent of the horses in the country, so they are among the biggest contributors to the industry,'' said Arrowfield Stud boss and Racing NSW chairman John Messara.

The more relevant focus, however, is about the breeders and owners of the 'Tier 1' horses capable of competing in the top level black-type races. These people and these horses are a very different caste from the great majority of 'Tier 2' horses with no chance of ever winning the major races that pay the bulk of the prizemoney.

Recent media attention has pointed up the prospect of annual stud fees for the more popular sires running to $30 million or more -- and the circle is continuous in that the owners of the progeny earning the most prizemoney (collected from punters) are likely to be repeat customers. It is unlikely that 60% of the most valuable horses in training are owned by breeders.

It is past time that the racing industry continues to be treated as some modern illustration of greatness having humble origins -- great horses start great is closer to the truth and their sales prices are indicative of these expectations.

The most effective way of ensuring the major breeding barns contribute appropriately to funding racing is not some levy on all foals registered but an annual registration fee -- say $25,000 -- for horses to be eligible to contest 'black type' races. This fee, nominally paid by owners each year at their discretion, would actually be reckoned in the initial purchase decision and the most likely outcome would be lower prices paid to breeders for the horses considered most likely to win the most prizemoney.

As the industry stands, it is the owners and punters that pay all the freight -- and it is the major breeding barns that finish up with the easy money after the employed participants have struggled to make ends meet.

In short, everyone else is overpaying (or being underpaid) to the benefit of the major breeders -- we need a new balance.


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j.r.b.

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2012-Jan-09, 07:19 AM

Peter Mair writes ... 2012-Jan-09, 06:40 AM

Recent media attention has pointed up the prospect of annual stud fees for the more popular sires running to $30 million or more -- and the circle is continuous in that the owners of the progeny earning the most prizemoney (collected from punters) are likely to be repeat customers. It is unlikely that 60% of the most valuable horses in training are owned by breeders.

It is past time that the racing industry continues to be treated as some modern illustration of greatness having humble origins -- great horses start great is closer to the truth and their sales prices are indicative of these expectations.

Rather than being lazy and relying on 'media attention', why don't you look into the figures yourself and tell us which stallions generate annual fees of $30m or more.

And while you're at it, let us know which of the sample below 'started great' (which I presume means they were catalogued at the elite sales - Magic Millions and Easter) and why - recent G1 winners and their sale prices (as yearlings):

Black Caviar $210,000

Hurtle Myrtle $55,000

Luckygray $46,000

Playing God $41,000

Sepoy not offered

Helmet not offered

Pinker Pinker $120,000

Secret Admirer $38,000 (passed in; reserve $40,000)

Streama not offered

The Verminator $37,500 (passed in; reserve $50,000)

Dr Doom not offered

Mosheen $250,000

Manawanui $45,000

Atlantic Jewel $320,000

Southern Speed not offered

Ortensia $50,000


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BigHef

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2012-Jan-09, 08:33 AM

An annual fee? You must be kidding.

So when a group of battlers get a handy horse together and think let's have a go at this listed race worth 50 to the winner, oh hang on we have to pony up 25k to be eligible.

Maybe the worst suggestion I've ever heard

Just levy 1% of stallion fees and put it back into racing


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Peter Mair

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2012-Jan-09, 08:33 AM

'JRB' -- you forgot Honest Abe by Humble out of Log Cabin

The stories i recall were along the lines of the top sires covering some 250 mares --and that coupled with some illustrative service fees returns 'annual fees' totalling some $30 million

Fastnet Rock -- 2011 service fee is: $ 132,000

Redoute's Choice Sire: Service Fee: $176,000 (down from $300,000+?)
I am sure the major studs know the scores.


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j.r.b.

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2012-Jan-09, 08:59 AM

Fastnet Rock covered 214 mares in 2011, more than any other stallion. His advertised service fee was $132,000 incl GST.

However it is not as simple as multiplying 214 x $132,000 = $28,248,000.

FR averages about 80% fertility, so you can take off $5,649,600 straight away.

There'd be some free returns in there as well.

Plus Coolmore would have a few of their own mares in the mix.

He was the most lucrative stallion in 2011. He wouldn't have got even close to generating $30m in fees.

Redoute's Choice covered 130 mares @ $137,500 incl GST.

Based on his last few years, you wouldn't want to bet on him topping 80% fertility.

He wouldn't have generated more than $15m, let alone $30m.

The foundations of your proposal are just plain wrong.

It's your scheme.

You do the figures and work out how much it would provide to racing's coffers.


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manikato1

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2012-Jan-09, 09:13 AM

BigHef writes ... 2012-Jan-09, 08:33 AM

Big Hef,

Pete's been on this one for years. It has always been obvious this was 2 seconds worth of thought without any idea of how it would work in practice. Despite everyone pointing out the ridiculousness of the idea, Pete still continues to promote it.
Shows the worth of most of Pete's theories really.


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dragons

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2012-Jan-09, 11:16 AM

What a great idea 25k a year to run in black type races.
Peter you should be in racing administration, you are silly enough to be.


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Peter Mair

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2012-Jan-09, 12:12 PM

Casting pearls before those that do not think

The major breeders, making the only real money in racing, can rely on the otherwise perplexed participants to ensure they continue to do so.

It is the same with the corporates -- they are featherbedded by the excessive TAB takeouts and then have the gall to offer 'best tote' on markets booked at 125%.

The Productivity Commission extended its brief to deal with some key funding policy issues in a single chapter.

The light of reason has still to shine on the analysis of the dirty detail of the economics of racing -- but, if the racefields levy falls over, my bet is that the response of the federal government will be to ask the PC to make a more comprehensive assessment of the likely future of the industry nationally.

...........if so, a levy on breeders collected from registration fees paid by owners to get 'Tier1 eligibility', will start favourite.


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dragons

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2012-Jan-09, 01:21 PM

I dont know in what fairyland it would start favourite.
How many horses have you raced or bred Peter?
My tip would be not many.


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Gintara

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2012-Jan-09, 02:36 PM

I asked that before Dragons, strangely Ol'Pete has never answered it

JRB - you left off Sincero @ $8k imagine that group of 10 owners and Ol'Pete expects them to stump up 3 times the purchase price of the horse just for the chance of following a dream ......


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Peter Mair

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2012-Jan-09, 05:38 PM

An industry that does not want to tell the truth, or the truth told

The racing industry is not alone in its preference that the ordinary punters are never told how the suasages are made.

That said the ordinary punters should not be too quick to dismiss an objective assessment of the industry's problems and possible solutions which is rather different to the tripe that the industry's administrators and major participant beneficiaries typically trot out.

One does not need to get sick to be a competent doctor.


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richo

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2012-Jan-09, 08:01 PM

so maybe pete's on to something here = punters betting on country racing $500 a year ,provincial races $1500 a year, city races $10000 a year and to bet on black type races $25,000 a year and all punters who back a winner have to sling the jock and the trainer aaaah fairylands a great place to be.


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whispering

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2012-Jan-10, 02:38 AM

1% of stallion fee to racing or foals cant race IMO


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