Each year, Americans carefully calculate the perfect gift for their children or loved ones, but should horse ownership be an idealistic expectation? Interestingly, there is a cheap and easy way to buy the next Kentucky Derby winner, visiting the stables is encouraged, and it does not cost as much as expected.
Naturally, horse ownership of any kind comes with a lot of responsibilities and the Thoroughbred Owners of California outline this area of owning a racehorse in a YouTube playlist called “Ins and Outs of Horse Ownership.”
In the web series, the Thoroughbred Owners of California explain that, while your spouse, sibling, grandchild or best friend might want to pet their horse on occasion, they hardly want to deal with the expense associated with keeping the horse in a stable, feeding the animal or other expenses related to training it and transporting it to major races.
Instead of leaving the business of owning a horse to the wealthy, there are now several ways to buy someone a horse for Christmas that are within a reasonable price range. In particular, Thoroughbred Owners of California encourages anyone that wants to give the gift of a horse to consider buying a share of a horse through a stock ownership program commonly referred to as a horse racing syndicate or partnership.
Although it can seem like a confusing process for a gift at first, and there are no guaranteed winners, popular thoroughbred horse racing syndicates have provided Kentucky Derby winners over the years. For example, Sackatoga Stables is a horse racing syndicate that owned 2003 Kentucky Derby winner, Funny Cide.
Team Valor (Animal Kingdom 2011), Taylor Made (California Chrome 2014), and IEAH (Big Brown 2008) are other horse racing syndicates that have had a Kentucky Derby winner since 2006. Other horse racing partnerships that have winners in Grade 1 thoroughbred stakes races include West Point and Eclipse.
Interestingly, even if there are no big winners in the group of horses your horse racing syndicates owns, it is not over when the horse retires. Instead, the horse might end up making good on your investment plus a profit because horse racing syndicates are often more interested in the breeding rights of horses.
The reason breeding rights are so important is because the horse owners can make millions from stud fees or simply by selling the horse for millions to a stud farm.
A good example is 2000 Kentucky Derby winner, Fusaichi Pegasus. LA Times reported that this racehorse sold for $70 million, and this record still stands.
By comparison, 2011 Kentucky Derby winner, I’ll Have Another, was sold to a stud farm in Japan in 2012 for $10 million, according to Blood Horse.
For horse racing syndicates that keep their horses for breeding, the stud fees can be enormous if they produce a Kentucky Derby winner. For example, Pioneerof The Nile only finished second in the 2009 Kentucky Derby.
Nevertheless, when their offspring, American Pharoah, won the 2015 Kentucky Derby and all three races of the Triple Crown for the first time in four decades, Pioneerof The Nile suddenly became very popular.
For example, most horses cover an average of 80 mares per year, and each time they get together, the stud fee usually begins at $5,000 that is paid only if the mare foals. However, the Paulick Report states that Pioneerof The Nile went from $60,000 in 2015 per mare to $125,000 in 2016 after his son won the Triple Crown. This means Pioneerof The Nile could collect as much as $10 million in stud fees in one year.
As far as buying into a horse racing syndicate for someone that only likes petting and not grooming horses, the good news is that horse partnerships also tend to have policies that allow all owners of the horse to meet the horses in-person almost daily. For example, West Point states the following on their FAQ for new partners or owners.
“[W]e encourage our partners to come out to the barn in the morning to visit their horses… to see your horses trained and cared for.”
All that is required to visit horses at the stables of many racing syndicates is calling ahead and making an appoint. Due to safety regulations concerning the horses, visitors cannot show up unannounced throughout the day.
The shareholders in the horse syndicate can also take tours behind the scenes and meet the trainers, jockeys, veterinarians, and other barn staff. This includes stable assistants, groomers, farriers, barn employees, and exercise riders.
In other words, if you have a family that is begging for a horse for Christmas, becoming a partial owner or shareholder is much easier and could potentially pay off if the horses at that syndicate are winners.
Although buying into a horse racing syndicate can cost around $10,000 per share and this can be ideal for giving as a gift, Telegraph suggests buying a single share that is split up among several friends or family members is more affordable for some.
In contrast, the average cost of a thoroughbred yearling at the prestigious Fasig-Tipton auction in Saratoga Springs, New York is $292,115, according to Biz Journals.
Of course, if buying into a horse racing syndicate seems like a larger investment than expected, a paid trip to visit a retired racehorse farm might be a better holiday gift idea. According to the Retired Race Horse Project, there are over 100 farms in locations throughout North America that could use the help of local visitors and volunteers.
[Featured Image by Darron Cummings/AP Images]