Anne M. Eberhardt

Bloodstock & Markets - Commercially Speaking

Looking inside the 2010 yearling average numbers

One way to measure the success of a stallion is by the average price brought by his offspring sold at public auction. But to get a more complete picture of a sire’s commercial performance, other figures need to be taken into account.

It’s not just how much a horse’s progeny command that’s important. For a commercial breeder, it’s also crucial to know if those offspring were profitable.

The focus of this column is the top 25 stallions on the list of leading commercial yearling sires based on their progeny’s sale average in 2010. The studs in this group, which are listed in Table 1, had three or more offspring sold at public auction, and The Blood-Horse had records of how much their stud fees cost in 2008, when the sale yearlings were conceived.

Under those conditions, Cozzene, who ranked 20th, was excluded because his 2008 fee wasn’t made public. The champion, who stood at Gainesway Farm near Lexington, was euthanized in October 2008.

The commercial yearling sire leader last year was 1992 Horse of the Year A.P. Indy, whose 19 offspring that were sold averaged $544,737. Next on the list was Distorted Humor, with an average of $381,154 for 26 progeny. A.P. Indy stands at Lane’s End Farm near Versailles, Ky., while Distorted Humor is based at WinStar Farm also near Versailles.

Dynaformer (with a $281,563 average), Street Cry ($256,161), and Smart Strike ($232,667) rounded out the top five. They stand at Three Chimneys Farm near Midway, Ky., Darley near Lexington, and Lane’s End, respectively.

The Blood-Horse used information about the top 25 stallions to generate two other lists for this column. Their rankings show the sires whose yearlings potentially were the biggest moneymakers by comparing their 2008 stud fees to their yearling averages. One, Table 2, is the top 10 based on how many times greater the yearling average was than the stud fee. The other, Table 3, is the top 10 based on how much higher the yearling average was than the stud fee in terms of dollars.

Tapit, who stands at Gainesway, was the Table 2 leader. His average yearling price of $114,381 was 9.2 times greater than his 2008 stud fee of $12,500. Tiznow, the 2000 Horse of the Year who stands at WinStar, was the runner-up with an average of $159,706, a figure that was 5.3 times greater than his fee of $30,000.

Three other stallions—Malibu Moon, Arch, and Medaglia d’Oro—had yearling averages that exceeded their stud fees by more than three times. Malibu Moon (3.8) and Arch (3.6) stand at Spendthrift Farm near Lexington and Claiborne Farm near Paris, Ky., respectively. Medaglia d’Oro (3.6) stands at Darley.

Years ago, horsemen considered a yearling to be profitable if it brought a price 2.5 times its stallion’s fee. It’s not a perfect formula, especially in an era when the costs to raise a young Thoroughbred have risen significantly. But it is a well-known standard. In addition to the top five stallions in Table 2, three others—Indian Charlie, Invasor, and Street Cry—had yearling averages that exceeded the “2.5 times” benchmark. Indian Charlie, ranked sixth at 2.7, stands at Airdrie Stud near Midway, Ky. Invasor and Street Cry were tied for seventh at 2.6. They stand at Shadwell Stud near Lexington and Darley, respectively.

A.P. Indy was the leader in Table 3. The average for his yearlings was $244,737 higher than his 2008 stud fee of $300,000. He was followed by Street Cry, with a $156,151 difference between his stud fee and yearling average, and Dynaformer, with a $131,563 difference.

Other stallions whose yearling averages exceeded their stud fees by more than $100,000 were Tiznow, Malibu Moon, Medaglia d’Oro, Darley-based Bernardini, and Tapit.

Looking Forward

Late in 2008 an American recession spread and turned into a global financial crisis. In the wake of that catastrophic development, prices for sale horses plummeted. Stallion managers responded by cutting stud fees for the 2009 breeding season and reducing them even more in 2010. There were further reductions in 2011 overall.

The yearling sale class of 2011 will be the first offered that was bred using the lower fees. If prices for yearlings remain stable or increase, commercial breeders will have better opportunities to make money. But the profitability of their horses won’t improve dramatically based on an analysis using 2010’s top 25 commercial yearling sires.

Those stallions had an average 2008 stud fee of $92,100 and their 940 yearlings that were sold brought an average of $159,634. The average price exceeded the stud fee by 1.7 times and also was $67,534 greater than the stud fee.

Those same stallions had an average 2009 stud fee of $80,720, which was down 12.4% from their 2008 average fee. If their yearlings bring the same average price as they did in 2008, it will exceed the stud fee by 2.0 times and will be $78,914 higher.

The dollar difference in yearling average and stud fee in 2011 will be 16.9% higher than in 2010. While that’s not a huge gain, it is significant, and any move upward will be welcome after several years of struggle in the auction business.

Making Hay

Some resourceful auction participants have enjoyed notable successes recently even though times are tough.

Ben McElroy, agent, purchased 2009 Santa Ynez Stakes (gr. II) winner Alpha Kitten from Bluewater Sales, agent, for $150,000 at the 2010 Fasig-Tipton Kentucky November select mixed sale, where she was outshone by champion-to-be Awesome Feather, who brought $2.3 million. At this year’s Keeneland January horses of all ages auction, Alpha Kitten brought $405,000 from Spendthrift Farm when resold by Paramount Sales, agent.

In 2010, at the Barretts January mixed sale, Kitty Taylor of Warrendale Sales, as agent, bought the winning Gentlemen mare Gentlemen’s Crown, in foal to Candy Ride, for $65,000 from Grant Hofmans, agent for the Craig Family Trust. Gentleman’s Crown produced a colt, and at this year’s Keeneland January auction he was in the Warrendale consignment and commanded $300,000 from Gainesway Farm’s director of public sales, Brian Graves, who bought him in the name of BG Stables. The price was the sale’s highest for a yearling.

Taylor bred the colt in partnership with Hargus and Sandra Sexton and Silver Fern Farm.


Table 1: Leading Yearling Sires by 2010 sale average (3 or more sold)

Rank Stallion No. Sold Average Price
1 A.P. Indy 19 $544,737
2 Distorted Humor 26 $381,154
3 Dynaformer 16 $281,563
4 Street Cry 28 $256,161
5 Smart Strike 33 $232,667
6 Bernardini 35 $202,400
7 Empire Maker 31 $182,226
8 Unbridled's Song 50 $180,580
9 Mr. Greeley 50 $167,160
10 Giant's Causeway 51 $161,961
11 Tiznow 51 $159.71
12 Malibu Moon 59 $152,364
13 Pulpit 28 $151,429
14 Medaglia d'Oro 48 $142,646
15 Street Sense 44 $135,250
16 Indian Charlie 44 $133,261
17 El Prado 7 $129,000
18 Tapit 42 $114,381
19 Hard Spun 63 $107,532
20 Dixie Union 39 $97,932
21 Speightstown 40 $91,075
22 Invasor 19 $90,395
23 Arch 29 $89,741
24 More Than Ready 45 $88,267
25 First Samurai 43 $88,191

Table 2: Leading Yearling Sires Avg. X Fee

Rank Stallion 2008 stud fee 2010 yearling average X stud fee
1 Tapit $12,500 $114,381 9.2
2 Tiznow $30,000 $159,706 5.3
3 Malibu Moon $40,000 $152,364 3.8
4 Arch $25,000 $89,741 3.6
  Medaglia d'Oro $40,000 $142,646 3.6
6 Indian Charlie $50,000 $133,261 2.7
7 Invasor $35,000 $90,395 2.6
  Street Cry $100,000 $256,161 2.6
9 Speightstown $40,000 $91,075 2.3
10 First Samurai $40,000 $88,191 2.2
  Hard Spun $50,000 $107,532 2.2

Table 3: Leading Yearling Sires by $ Above Fee

Rank Stallion 2008 Stud Fee 2010 Yearling Average $ Above Fee
1 A.P. Indy $300,000 $544,737 $244,737
2 Street Cry $100,000 $256,161 $156,151
3 Dynaformer $150,000 $281,563 $131,563
4 Tiznow $30,000 $159,706 $129,706
5 Malibu Moon $40,000 $152,364 $112,364
6 Medaglia d'Oro $40,000 $142,646 $102,646
7 Bernardini $100,000 $202,400 $102,400
8 Tapit $12,500 $114,381 $101,881
9 Indian Charlie $50,000 $133,261 $83,261
10 Smart Strike $150,000 $232,667 $82,667