Marten’s Perspective: Racing – an owner’s experience

The British Horseracing Authority recently published their ‘Fact Book’, which they believe provides ‘an invaluable and informative guide to some of the key numbers behind our great sport.’

The publication reveals that in the period up to the spring of 2012 there was an average of 14,056 horses in training, although there has been a steady drop in the last few years. Taking flat, jumping and hunter chase horses the figures have fallen as follows:

2008                15,760

2009                15,243

2010                14,969

2011                14,435

The fall in the number of yards with a horse in training over the same period has been fairly minimal, with 855 in 2008 down to 825 in 2011.

Of the 825 yards in 2011, 87 housed 41 or more horses with the vast majority – 483 – home to 10 or fewer horses.

Since 2008 the number of owners with horses in training has dropped from 9,539 to 8,425.

By contrast racecourse attendance was holding steady until 2011, which saw an increase from 5,769,381 in 2010 to 6,151,282 in 2011.

The prize-money situation is less positive, with a drop from £100 million in 2009 to £94 million in 2011. Between 2008 and 2011 the yield from the Levy dropped from £115 million to just under £60 million.

Looking closely at these figures from the viewpoint of an owner, I am not as encouraged by the increase in racecourse attendance as those linked to the tracks undoubtedly are.

This is because the increase can be attributed to a number of non-equine entertainments, notably the concerts put on through the summer after evening race-meetings.

The newcomers to racing are not, for the most part, true fans of the sport. They are there for the al fresco offerings or party atmosphere. I recall attending Windsor one evening last year and the majority of the young racegoers were standing around chatting and drinking behind the grandstand all evening, hardly venturing to the front to watch a race. This especially applied to Newmarket’s Friday evening meetings, where it is very difficult to move around if there is a big-name act on afterwards.

I very much doubt that many of the new visitors to the races will convert to become owners. This is borne out by the drop in the number of owners with horses in training since 2008.

The 51st Levy Scheme covering the current period from April 2012 to 31 March 2013 will yield £65.9 million. In addition Betfair has undertaken to provide £6.5 million. This is based on bookmakers contributing 10.75% of their gross profits on British racing.

As someone who has been an owner and run partnerships over the last 40 years I am not alone in bemoaning the drop in prize-money.

We have just sold a horse named Cappadocia, who achieved a fair level of form this season as a two-year-old. From 12 starts he won twice and finished second three times. Fortunately we collected a Horseman’s Group bonus of £3,000 for winning a race at Kempton in September and then when he won again at the same track in October the prize to the winner was a not unreasonable £5,822.10.

In total our horse won £11,514 plus the £3,000 bonus. However this did not cover the amount we paid for him, which amounted to around £25,000. With training fees of approximately £60 a day, plus extras, and a sale price of £17,000, my owners will be sharing around £35,000 plus any excess which was unaccounted for in the monthly payments.

This has been an enjoyable experience and my owners did not become involved in the expectation of making any money. However in the States a horse of this quality – rated in the high 70s – would have won, according to a friend I have based out there, around $50,000 for showing a similar level of form.

On the positive side racehorse ownership takes you to places you may not otherwise go. The thrill of a winner more than compensates for the many bad days, while it’s rewarding to feel closely involved with the yard, jockey and staff.

My view is that despite the poor level of prize-money there are still commercially viable opportunities as an owner both on the Flat and over jumps.

On the Flat the best option is to buy a two-year-old which is eligible for the Racing Post Yearling Bonus of £10,000. These races are worth targeting and since its inception three years ago 533 bonuses have been paid out, with around 170 this season.

Also, if you are fortunate enough to get a two-year-old who shows decent maiden form in the first six weeks of the season then it’s more than likely that bids will come through for the horse. Pay Freeze, for example, was sold for £150,000 to Qatar Racing Limited after winning his second start by five lengths at York having cost just 7,500 Euros as a yearling. Cay Verde, who cost £27,000 as a yearling, was sold privately for the best part of £400,000 to the same owners and then again for 320,000 Euros in October.

These were, of course, exceptions but they still demonstrate that there are owners prepared to pay significant sums for a two-year-old in the spring which they perceive has Group-class potential.

It can pay to follow a similar path over jumps. In that case, though, the commercial market is with a bumper horse. Mick Channon could probably have named his price after Sgt Reckless hacked up on the bridle to win a bumper at Wincanton in May, comfortably commanding a six-figure sum for his modestly-bred son of Imperial Dancer.

Had I the means to do so I would acquire a handful of store horses and send them to someone with a reputation for training bumper winners. The purpose would be to place them to show themselves in a favourable light and then send them to a sale or wait for a private offer. Many years ago Chris Thornton and Don Eddy used to sell their bumper winners on, often realising a good profit.

There are opportunities out there but they are mainly with young unexposed stock.

Next time I will discuss the type of pedigree and profile which would appeal to potential purchasers.