Daily Racing Form National Digital Edition
Stud fees take hit for 2021
War Front commanded a stud fee of $250,000 in 2020 at historic Claiborne Farm, reigning as the most expensive stallion in North America. That fee will take a significant drop for 2021 – and he’s not alone.
As stud fees begin to be announced for 2021, the dominant trend emerging is toward declining fees, a response to the coronavirus pandemic that has touched every aspect of the Thoroughbred industry. Of the returning stallions who have had fees announced through Thursday, 63 percent will have reduced fees, including War Front at $150,000.
“In these unprecedented times, we felt it would be irresponsible to raise or keep some stud fees the same as last year, despite our stallions having outstanding success in the sales ring and on the racetrack,” Claiborne president Walker Hancock said. “It is now more important than ever that we do what is best for the sustainability of our industry.”
As the Thoroughbred marketplace climbed upward following the financial recession of 2008, which caused sale prices and stud fees to drop, the commercial arena that emerged was a polarized one, with fierce competition and soaring prices for the perceived highest-quality stock at sales, but dismissal of horses who failed to perfectly match buyers’ criteria. The resulting sale buyback rates created a crunch for smaller commercial breeders, who depend on selling their crop of young horses to remain solvent. As that end of the marketplace works for survival, the national trend has been toward tightened numbers of stallions and mares in production and smaller foal crops – trends that The Jockey Club has projected to continue.
As the marketplace faces the unprecedented challenges of the pandemic, it has, as expected, reacted with restraint to the turbulence in the world at large. Last month’s Keeneland September yearling sale – considered a bellwether for the North American industry, as it tests the marketplace at a number of levels over a marathon run – displayed trends that have been visible at most of this fall’s yearling sales. Average dropped 25 percent, with the median down 17 percent. The buyback rate rose to 25 percent from 21 percent in 2019. In response to a depressed sales market, stud fees must drop to remain affordable for breeders, who then seek to sell the resulting foals at a profit.
Through Thursday, six major Kentucky farms had announced stud fees for 2021 – Airdrie Stud, Claiborne Farm, Hill ‘n’ Dale Farm, Spendthrift Farm, Taylor Made Farm, and Three Chimneys Farm. Between those, there are 56 returning stallions for 2021 who also stood in Kentucky in 2019 and 2020.
Of those 56 stallions, 17 have a fee remaining unchanged from 2020 to 2021, compared to 36 in this group who were steady between 2019 and 2020. More than half, 35, have had their fee dropped for next year, compared to 14 who dropped from 2019 to 2020.
Only two stallions, Into Mischief at Spendthrift and Not This Time at Taylor Made, have a fee increase, compared to six between 2019 and 2020.
There are three stallions in this group whose fees are not yet public or who could change. Orb has moved to a private fee at Claiborne, with his stablemate Runhappy’s fee to be announced later in the year. Hill ‘n’ Dale stated that Maclean’s Music’s current fee is “valid on contracts signed prior to Breeders’ Cup,” indicating that it could change with success.
Into Mischief, whose fee rises to $225,000 from $175,000, and Not This Time, who jumps to $40,000 from $12,500, earned their increases with outstanding seasons on the racetrack and in the sales ring. Reigning leading sire Into Mischief again leads the standings in 2020 and recorded his first classic winner this season with Kentucky Derby winner Authentic. Shortly following that postponed classic on Sept. 5, Into Mischief led sires of the Keeneland September sale by gross, with five seven-figure yearlings. His overall yearling average this year is $419,205, with those yearlings conceived on a $100,000 fee in 2018.
“In our minds, there was only one box left to tick for Into Mischief and that was siring a classic winner,” Spendthrift general manager Ned Toffey said in a press release. “We continue to believe the best is still to come for Into Mischief. Authentic, Gamine, and these 3-year-olds were bred on a $45,000 fee, and Into Mischief has continued to cover better books every year.”
Not This Time leads his freshman sire class by individual winners, with one of those dual Grade 1 winner Princess Noor. She was the most expensive juvenile of the 2020 season, selling for $1.35 million in Ocala this spring, and helped her sire average $175,216 from his juveniles sold against a $15,000 fee. He is averaging $123,331 this yearling season.
Of the stallions who will have their fees drop, one of the most significant, in addition to War Front, comes from Spendthrift stalwart Malibu Moon. The classic sire’s fee is nearly halved, to $35,000 from $60,000.
Goldencents, a successful young son of Into Mischief, will have a fee of $15,000, a price point at which Spendthrift’s Mark Toothaker tweeted that seasons were “flying off the shelf,” compared to $25,000 in 2020. Overall, Spendthrift cut fees on the vast majority of its returning stallions for 2021.
“Breeders are the backbone of our industry, and the bottom line is that stud farms only go as breeders go,” Spendthrift owner B. Wayne Hughes said in a press release. “We are all in this together. Our team recognizes the challenges of the times and how the entire breeding community has been affected this year. If we had room to lower a stud fee, we did it.”
Breeders have applauded the changes.
“When the market goes up as breeders we accept the upward spiral of stud fees,” Craig Brogden of Machmer Hall tweeted. “I am always going to support stallion farms that understand the current market and the risk we take as breeders under the current economic environment. As breeders we don’t decide what the market price is, we let the buyers decide at auction.”