Trends Affecting Owners of Thoroughbred Racehorses – Part Four of Six
Increased costs of labor and materials for breeders, coupled with falling sales prices for mares and babies have results in fewer horses being bred and thus shorter fields (which serves to drive even more racing fans away). I.e., we currently have fewer horses that are competing for purses that, to date, have remained fairly constant. Normally, of course, market conditions like these would produce a demand for more horses to replace those that are breaking down or were not bred in the first place. After all, someone wins the purse of every race that is run.
But the industry is crashing. The Barrett’s January mixed sales and the March two year-old sale were down dramatically from past years. Onlookers stood in shock as many horses whose owners had invested tens or hundreds of thousands of dollars did not get a single starting bid of $900. We’ve build a breeding industry in which a purebred Siamese cat is worth more than many of these two year-old horses that blaze a furlong in 10 seconds flat.
So let us ask ourselves this: Why are sale prices plummeting in a market that is experiencing a diminishing supply in the face of constant demand? The answer, I believe, is contained in the analysis above. The failings of the industry overall have resulted in a hugely negative average return on investment at the typical auction over the last few years. Most of these horses entered to be sold as weanlings, yearling, and two year-olds in training do not survive the brutal training and the abuse of drugs that are injected into them-and only a very small minority generates a substantially positive return for their owners.
Interestingly, the sales companies don’t even try to argue this point. The Barrett’s March sale offered a few hundred two year-olds, and its catalog advertised four or five horses from its previous sales that succeeded on the track. This forces the reader to wonder: Gosh, what happened to the other 99%? The answer, of course, is that they’re standing around somewhere trying to recover from cracked sesamoids, bowed tendons, ruined suspensories-or worse.
Even if owners can somehow avoid being outright cheated, they still have experienced a sharp increase in the costs of training. Together, these issues have formed a market condition that can be summed up as follows: Thoroughbreds are truly terrible investments. Only hobbyists spend money they know they’ll never get back, and, as the economy has tightened, fewer people can afford to participate in this expensive hobby. One can only look at the dismal sales results, the closing of breeding farms, and people leaving the business to acknowledge that the “chickens have come home to roost.”
