Now that the fall-bloodstock sales are done (look here and here for full results), perhaps it’s time to ask precisely what was going on at the top quality of the market. While overall results were approximately comparable to last calendar year, correcting for the high-end bump in 2011 from the Edward Evans and Palides dispersals, the top of the year’s market was stratospheric. 4.2 million. And the ones weren’t the only extravagant prices. 2.2 million high bet for In Lingerie, who didn’t meet her reserve.
2 million or more. Multi-million-dollar deals for stallion potential clients are nothing new, each year but a stallion can pump 200 or even more infants out onto the market. For a mare, in contrast, there are no economies of scale. Year One, one baby. And that’s if all goes well, which it often doesn’t. 2 million-and-up mares this season thinking?
Is there any way they can fairly expect to make a profit on their buys? How much would the mare’s owner have to market her babies for to get a positive rate of comeback? Let’s make some assumptions. In the eye of simplifying reality, I create a spreadsheet for the trophy-mare business.
- August (321)
- Instant reliability of working with big partner [insert company name here] brand
- Complete maintenance of museums and traditions sites
- Money as a measure not only an end
Sale costs, like the consignor’s and auction companies cut, sales prep, etc., are 10% of the sale price. Anybody of those assumptions is likely to be way off in virtually any given calendar year, but taken together they’re a reasonable representation of the united states cost structure for a high-end mare. So, if that’s the framework, how much would the babies have to sell for the breeder to get her cash back?
Let’s focus on Havre de Grace. 1.5 million in the sales ring. And that would be a paltry inner rate of return of 2%. Is not going to happen. So I hope that Mandy Pope didn’t make that purchase in the expectation of turning a revenue. And it’s a good thing that the Internal Revenue Service asks all of us in the business to show a profit in mere two years from every seven to overcome the presumption that it’s a spare time activity. Many thanks Sen. Mitch McConnell (R-Horse Racing).
600,000. Easy, right? 900,000. So, municipal bonds are safer, more profitable, and more reliable, but, damn, they sure don’t look as pretty as those Thoroughbreds racing across the paddock. 2 million or so, it could even be possible that the purchase of a top-level mare could be a sensible economic decision. One reason might be that the economics will vary beyond your US.
3.2 million) by agent Reynolds Bell for a New York client. 4.5 million for Pure Clan, will leave the mare in Kentucky evidently, given that he’s moved into into a collaboration with a major US stallion train station Three Chimneys. So the economics of mating may vary somewhere else; certainly the high purses in Japan suggest that a cash-flow projection might look rosier there than in America. But also for the couple of Americans who paid those top prices, it can’t be about the money. It’s surely got to be about the love of the overall game. And that’s not necessarily a bad thing.
