Off to Korea

[snaffle1987]

ArchArchArch and Tizway were both sold by Spendthrift to S. Korea. Spendthrift retains first right of refusal if ever sold and they also retained the rights that both stallions return home at the end of their breeding careers (although I am assuming this is only the case if both stay with the farm they were sold to)

Original owners of both stallions could not reach a deal with Spendthrift to keep them in the States.

A bit sad to see both leave. I am surprised to see ArchArchArch go. He seemed to be heading the Spendthrift roster along with Jimmy Creed.

[Texarkana]

It happens. Hate to see them go, but they will be in good hands.

But Spendthrift also stands Malibu Moon, Into Mischief, etc. ArchArchArch and Tizway (and Jimmy Creed), though nice sires, were far from heading anything.

[Pronzini]

Actually the original owner of Archarcharch is all over social media and the comments section of Bloodhorse claiming that she wasn’t given a fair opportunity to purchase the horse back. Obviously that depends on the original contract terms and whether there something in them regarding future sale. The willingness of the Kentucky farms including Spendthrift to jettison established stallions for new and shiny retirees does point out the risk in Share the Upside type agreements. It is a little difficult to honor the free breeding if the horse is in Korea. Also Archarcharch may have done OK in a regional program but it sounds like the new/old owner would have had to honor the 50 free breedings earned through Share the Upside if the horse stayed in the US. Fifty free breedings is a lot especially outside of Kentucky.

[Texarkana]

@Pronzini

The willingness of the Kentucky farms including Spendthrift to jettison established stallions for new and shiny retirees does point out the risk in Share the Upside type agreements. It is a little difficult to honor the free breeding if the horse is in Korea.

These two are not the first “share the upside” stallions to end up overseas. Tiz Wonderful, Victor’s Cry… good news is you retain your breeding rights, lol.

[snaffle1987]

Some are saying Jimmy Creeds are just coming into their own; a sire to watch out for. Off topic though. According to the bloodhorse article, Spendthrift said they couldn’t reach agreements with original owners of the stallions. Sad for ArchArchArch’s original owner. I feel for her.

[snaffle1987]

ArchArchArch is doing pretty well, 9 stakes winners and still early in his career. I think Spendthrift yanked the rug out too fast on that one,

As for Share the Upside; its a scheme and I firmly believe this type of “agreement” is ruining the market. Someone posted on BH that ArchArchArch covered 176 mares in 2016, 176!!!. Tizway covered 73. The industry continues to cry “poor me” when they are essentially ruining any chance a small breeder has by overbooking, overbreeding, and flooding the market. Have to cash in on these stallions quick, make the highest amount possible in a small timeframe by offering insane incentives, and then ship them off when they hold no value anymore in stud fees and offspring markets.

It appears the Yagos’s are very upset about ArchArchArch and how this story is being portrayed. I hope they can bring him home when the time comes and cheers to them for trying for the horse!

[Where_sMyWhite]

Were Archarcharch and Tizway eligible for Share the Upside? It appears very few of Spendthrift’s stallions are available through that program.

Spendthrift has a number of nice stallions… I also like Temple City and Goldencents. I’d agree with Texarkana that Archarcharch and Tizway make more sense as regional stallions if they were to stay here.

As for the original owners, who knows what their contract was with Spendthrift. If the horses really meant that much to the former owners, then agree to Spendthrift’s terms. Easy to cry after the fact.

For these big breeding farms, it is a business. They can afford to be sentimental if they want to once a stallion is done with their breeding career but, IMO, not so much so before.

Sounds like Spendthrift has done all they can to ensure both horses will come back to the States when their breeding careers are finished. I can live with that.

[Pronzini]

@Where'sMyWhite

Were Archarcharch and Tizway eligible for Share the Upside? It appears very few of Spendthrift’s stallions are available through that program.

I don’t know about Tizway but Archarcharch definitely was when he first retired. That’s the 50 breedings they are talking about.

@Where'sMyWhite

As for the original owners, who knows what their contract was with Spendthrift. If the horses really meant that much to the former owners, then agree to Spendthrift’s terms. Easy to cry after the fact.

Agreed. Especially if they were paid more money for the right of future sale and to approve the enrollment of the horse in the Share the Upside program. Archarcharch has been moderately successful which means they can sell him but not enough of a stallion for Spendthrift to keep him. Selling him to Korea makes a lot of sense in that light.

[Pronzini]

@snaffle1987

ArchArchArch is doing pretty well, 9 stakes winners and still early in his career. I think Spendthrift yanked the rug out too fast on that one,

I think he’s done fine for a beginning stallion in his price range but that number of SWs seems high to me. Bloodhorse still has his page up and his statistical summary says that he had 9 stakes horses not stakes winners. Honestly I’m not picking on you (or on the former owner who was also claiming that number) but it really does make a difference. The leading second crop stallion Bodemeister only has 6 SWs at this point. Archarcharch had a full additional year at stud and plenty of foals and Bloodhorse indicates that he has 5 SWs and only one of them Toews on Ice is a graded SW. That’s really not enough firepower for Kentucky which is why the sale makes sense.

[snaffle1987]

the problem with Share the Upside is Spendthrift sells off these massive amounts of lifetime breedings and then dumps the stallions after a few years. Its a win, win for them from a cash flow standpoint. But no one in the US is going to take on these stallions if Spendthrift wants to sell them and add something different to their lineup.

NO other breeding farm is going to take on 50 lifetime breeding rights from owners on a stallion unless its something like Curlin or Malibu Moon (but those type of stallions will never change hands). They probably wouldn’t take on a stallion with 20 of these lifetime rights. Essentially the farm they would get sold to gets screwed (Spendthrift cashed in initially then it becomes the burden of another farm to supply that many free breedings every year) and it also screws over those who buy into these lifetime breeding deals.

Its a complete Ponzi scheme. Yes, you dont pay any stud fees until the offspring are sold. Just look at the “Breed Secure” part of the program. On a $100,000 foal sold at sale, the farm gets the breeding fee and the seller keeps the rest. So you’re paying for the stud fee no matter what. In addition to that, the stallions available for Breed Secure are often $1000 - $3000 more on that program than for their regular stud fee. So you’re paying a higher stud fee at the time of sale on a mediocre stallion instead of just paying the lesser amount at time of breeding.

On the “Foal Share” program where the stallion is a $7500 from another farm; the resulting foal sells at auction for $100,000 and the breeder/owner gets $50,000 while the stallion farm receives the other $50,000. So you got a free breeding to a $7500 stallion but you really didn’t; you only got $42,500 while the stallion farm banked the remainder. You, as the breeder still had to pay to raise the foal and prepare it for sale; Spendthrift did nothing and still took half your money. Sure you got lifetime breeding rights after 2 years but when they sell your stallion overseas after 2 or 3 years; you are SOL.

So if you chose one of their SharetheUpside stallions; his stud fee was 15,000 and the resulting foal sold at public auction for 16000 due to a some issues on a PPE: Spendthrift gets 15,000 and you get 1000. If you made a profit past the stud fee; you still owe Spendthrift the fee; even if its only $50 profit. If the resulting foal sells for less than the stud fee; you owe nothing to Spendthrift (but how often would that honestly occur).

the other deal with SharetheUpside is you only get lifetime breeding rights is if you have two live foals within 2 years and pay both stud fees at time due. By the time the 3rd or 4th year rolls around, the stallions lose their luster as first crops are already racing and they potentially get sold overseas where your deal is no defunct.

Hit It a Bomb (Lord I hate that name) is currently one of the stallions in the program. His stud fee is 7500 but his Share the Upside fee is 8500
Cinco Charlie on the other hand; his stud fee and Share the Upside fee are both 5000.
All of the stallions in the BreedSecure program have higher fees for that program than their normal stallion fee.

[Texarkana]

While Spendthrift may have been the first to publicly brand their program as “Share the Upside,” selling breeding rights on new stallions is a very old practice that’s not even exclusive to thoroughbreds. I would not call it a “ponzi scheme,” however, I do think it’s very risky in today’s market. Sometimes lightning strikes (like with Into Mischief, who was one of the first publicly in the program), most of the time it doesn’t.

Spendthrift is far from the only farm who subscribes to the practices of big book stallion management/drop the stallion when lightning doesn’t strike immediately. I have a lot of respect for the few farms who have gone against the current and still try to manage for something other than huge numbers.

Re: Breed Secure. Breed Secure is 100% independent of Share the Upside, or at least it was when I saw the contract. It’s basically a loan + an interest fee so you can float your payment. Personally, I think it was brilliant of Spendthrift (and other farms who do similar) for when the market tanked, because many breeders lost everything and could not have kept on going.

[Where_sMyWhite]

In looking at Spendthrift’s web page, It appears that Share The Upside and Breed Secure are still separate.

Share The Upside is offered for only 2 of 23 stallions, Cinco Charlie and Hit it a Bomb.

Breed Secure is offered on 12 of their 23 stallions so just barely half. I would also guess that a breeder could choose to breed to one of the stallions that is offered in either program and choose to use a conventional non-program contract and fee.

None of Spendthrift’s top, or what I would consider top, stallions are available for either program

Breeding young stallions is as much a crap shoot for the stallion owner as it is for the mare owner. Sometimes you get lucky but most of the time, you don’t.

[LaurieB]

snaffled1987, it appears that you have all your breeders’ incentives mixed up together without a clear understanding of how some of them actually work, but for the sake of brevity, I will only address your paragraph about foal shares.

No one who has a mare capable of producing a 100K foal (to use your example) would breed on a foal share to a $7,500 stallion. It doesn’t make financial sense on any level. A person with that kind of mare would be looking for a foal share to a horse they loved but couldn’t otherwise afford–a stud fee of maybe 50-60K. That’s when both parties have the opportunity to benefit. The mare owner can upgrade the caliber of stallion his mare goes to, and the stallion owner gets another nice mare in his horse’s book and perhaps some additional income from breeders’ awards down the line.

[snaffle1987]

So Laurie; Basically what you are stating is Spendthrift’s Foal Share program is stupid considering the stallions available on the program are not the elite. To clarify, the foal share/breedersshare program at Spendthrift is sale price as a yearling, not a foal. Regardless; many of these stallions offspring (if you look at sales history) very few make the 100k or even the 60k mark.

Regardless; I still think both programs at Spendthrift are a complete scheme. If someone wanted to do this with a stallion like Bodemeister when he was first offered, as a Breeder I could see it worth it. Still a gamble but more worth it than what is currently offered at Spendthrift. But for a 7500 stallion; you’d be paying more to be a part of the program and return on investment I don’t think its paying off. As I stated in my above post; after 3 or 4 years the stallion is likely to leave Spendthrift due to lackluster progeny, mediocre sales prices, or not enough booked mares. After each member’s 2 live foals are born; Spendthrift has to start honoring those free breedings every year. Why would they keep the stallion in their barn at that point? At that point likely to be sold, likely go overseas and your lifetime breeding rights are gone. No one in American is going to take on a stallion out of Spendthrift who has 50 free breeding’s attached to him every year that the buying-farm never received any initial capital off of.

Sure it may be a great opportunity to breed to a solid stallion on the cheap (7500) and take the risk. Not everyone can afford a 25-50k stallion. But lets be honest here and just state that any stallion inducted into this Spendthrift program every year; is screwed unless he defies the odds and is a diamond in the rough.

Yes, Cinco Charlie and HIt it a Bomb are both the current SharetheUpside stallions. Once those books are filled and they filled their quota; new stallions are offered in the program next year.

I actually like Cinco Charlie. He is a beautiful horse with a neat pedigree (I love to see Halo that close)

Hit it a Bomb is an excellent choice for turf or even hurdler breeders. He has a very interesting, and unique pedigree. Nice to see Private Account, Danehill, Sadlers Wells, and Rubiano there. He would be a real treat to those who breed for sport. But his falter is he is an irish bred horse who is a turf horse. He wont survive as a sire in the states despite how successful he was. His pedigree is well written for those in Europe or even Asia where they favor this type of sire/turf racers. If you have a turf mare or like to breed steeplechase horses; I would certainly take my 5k and consider him. but I wouldn’t do so expecting either one of these stallions to stay here for long.

[Texarkana]

@snaffle1987 I think you are misunderstanding the info on Spendthrift’s website and what Laurie was saying. Foal share is not something they are advertising per se; it’s an old practice independent of their two, separate branded programs- Breed Secure and Share the Upside. They just listed it as an example. And I don’t think @LaurieB realized those numbers came straight of Spendthrift’s website, as she was unlikely to be needing to look at their advertisement. I agree Spendthrift’s choice of numbers was overly optimistic, lol. But she did not call it “stupid” because the stallions were not “the elite.”

I’m having a hard time following your post to address things, but there seems to be a lot of assumptions and anger.

Bottom line, it’s a breeder’s choice to enroll in either of those two programs. No one is forcing them; they can still purchase traditional LFG seasons from Spendthrift or do their business entirely elsewhere.

Personally, as a broke ass wannabe breeder myself (O mi gott in himmel, will ANY of my mares ever deliver a live foal?), I appreciate that many of these farms have created non-traditional programs. It is an expensive game that I could not afford to play without deals and discounts. I’ve worked in breeding a long time, but just recently bought mares of my own. The business end is all new to me, and I was very intimated to contact some of these farms at first. Yet I’ve been so impressed how I’ve been treated by Spendthrift and nearly every other farm I’ve dealt with. There are things in the “game” I don’t like, but I definitely do not believe Spendthrift or any other farm is a “complete scheme.” Quite the opposite, actually. At the end of the day, everyone is trying to profit, which may sound negative and greedy, but there is literally no way to continue in the sport if you are not profiting. It’s too expensive.

[LaurieB]

@snaffle1987

So Laurie; Basically what you are stating is Spendthrift’s Foal Share program is stupid considering the stallions available on the program are not the elite. To clarify, the foal share/breedersshare program at Spendthrift is sale price as a yearling, not a foal. Regardless; many of these stallions offspring (if you look at sales history) very few make the 100k or even the 60k mark.

Well, no. That’s pretty much exactly what I didn’t say. So please don’t use me to support your ideas and opinions.

Foal shares are not the same as Share the Upside. In fact, they have nothing in common.

Since you used the term foal shares when you were posting above, I assumed you were talking about foal shares.

There’s really no point in being so angry about something you clearly don’t understand. None of these deals are being thrown together behind a barn by a couple of good old country boys. Stallion owners are business people. So are mare owners. There’s a lot of money involved in doing these breedings. So we read the contracts we’re signing. We understand the risks. And we don’t go on the internet to make things up about consequences that don’t exist.

[LaurieB]

@snaffle1987

Regardless; I still think both programs at Spendthrift are a complete scheme. If someone wanted to do this with a stallion like Bodemeister when he was first offered, as a Breeder I could see it worth it. Still a gamble but more worth it than what is currently offered at Spendthrift. But for a 7500 stallion; you’d be paying more to be a part of the program and return on investment I don’t think its paying off. As I stated in my above post; after 3 or 4 years the stallion is likely to leave Spendthrift due to lackluster progeny, mediocre sales prices, or not enough booked mares. After each member’s 2 live foals are born; Spendthrift has to start honoring those free breedings every year. Why would they keep the stallion in their barn at that point? At that point likely to be sold, likely go overseas and your lifetime breeding rights are gone. No one in American is going to take on a stallion out of Spendthrift who has 50 free breeding’s attached to him every year that the buying-farm never received any initial capital off of.

Sure it may be a great opportunity to breed to a solid stallion on the cheap (7500) and take the risk. Not everyone can afford a 25-50k stallion. But lets be honest here and just state that any stallion inducted into this Spendthrift program every year; is screwed unless he defies the odds and is a diamond in the rough.

I find it interesting that you think the program is a “scheme” when you like the stallion (Bodemeister) but not when you don’t. All stallions farms are looking for “diamonds in the rough”. Only 10% of horses that retire to stud, succeed–and Bodemeister was just as much of a gamble for WinStar as Spendthrift’s new stallions are for them. Spendthrift has given many stallions a chance at stud that they would never otherwise have had. They defied the odds with Into Mischief, and will no doubt do so again with another stallion.

As Texarkana pointed out, no one is forced to take part in any of these programs (which are now so popular that they have spread to other farms). Mare owners know what they are doing when they gladly sign up, so your outrage on their behalf is sadly misplaced.

[snaffle1987]

No I am not angry about this, not a bit. Frankly; it does not really bother me much at all. I think you are reading into the simple points I am trying to bring to light that are there for your plain viewing that you are making assumptions. But when you read between the lines and you start researching what you’re buying into; on the stallion side it is an ingenious business plan to make a buck and the only thing you have to support is the stallion itself. Their breed secure program would work well for those who want to sell the resulting yearling and pay the stud fee later. If the yearlings sells for only a few grand more than the stud fee; it certainly does not bode well for you and you still owe the stud fee. Its a big risk.

In the case of the stallions listed for breed secure; their fees are already quite cheap so the chances of the resulting offspring selling for under 7500 is very slim which is good for the stallion owner but If you look at sales history on some of these stallions; it can get sketchy.The JImmy Creeds seem to be doing very well in the sales and his first runners have been winners in their 1st or 2nd career start. I do think its a good opportunity for breeders to invest in a stallion like him and the Breeders Share program offers the opportunity to pay the stud fee later on.

And, yes, breeding programs like this and brokering deals has been going on behind the barn door for a long time. Any higher end mare would be accommodated by a stallion owner if it meant a high volume sale coming their way and press-time. While American Pharoahs stud fee was 200k, some breeders were able to get 2 or more mares bred to him for that price. Why? because they were high end proven mares producing high end offspring. It would only make sense for Coolmore to accommodate every opportunity to improve their stallions stud career from the get go.

My point on the Share the Upside program is if you are investing in these 2 stallions for two seasons expecting to get lifetime breeding rights; don’t hold your breath. I don’t expect either of the 2 currently listed to stay at Spendthrift for long (I hope they prove me wrong) and if they get sold overseas; those holding the breeding rights are now SOL. the chances of another farm buying this stallion to stand in NA with 50 free breeding’s every year is non existent.

But I would assume breeders would be doing this type of research long before hand and not giving into the glitz and glamour of fancy advertising.

[Where_sMyWhite]

Still don’t get the furor over this

Just for giggles I looked at Spendthrift’s Cinco Charlie’s page.

He current shows $5K S&N or Share the Update $5K (live foal) so same price.

His first babies should be on the ground early next year. If you took advantage of the Share the Upside, you could breed this year and next and pay the StU fee. It won’t be until, at the earliest, last next year that his babies would hit the auction ring so a potential beginning idea of produce. You could breed again for free in 2019 and 2020 before his babies hit the track.

Based on the verbiage on Spendthrift’s description of StU, you aren’t limited to breeding the same mare. Unless Spendthrift sells Cinco Charlie before the 2019 breeding season, you still have an opportunity to utilize the free breedings. Couldn’t find the actual StU contract online (which kinda doesn’t surprise me) to see what it says if the stallion is sold before being retired.

I suspect that the top mares won’t be going to Cinco Charlie, regular or StU or not.

If Cinco Charlie turns out to be the second coming of Tapit or War Front then I suspect Spendthrift will hold on to him and you’ve got yourself a deal

[LaurieB]

@snaffle1987

And, yes, breeding programs like this and brokering deals has been going on behind the barn door for a long time. Any higher end mare would be accommodated by a stallion owner if it meant a high volume sale coming their way and press-time. While American Pharoahs stud fee was 200k, some breeders were able to get 2 or more mares bred to him for that price. Why? because they were high end proven mares producing high end offspring. It would only make sense for Coolmore to accommodate every opportunity to improve their stallions stud career from the get go.

Yes, but regardless of where the deal gets done, the end result is still that a contract is signed and both parties understand the terms. Breeders are not being tricked into agreeing to something that is only advantageous to the stallion owner–as you said above.

As for American Pharoah, every breeder was able to breed to him for that price. His adjusted stud fee was announced, and hardly a secret. It had nothing to do with the caliber of the mares he was being bred to, rather it was a result of Coolmore’s inability to initially fill his book.

There is an internet notion that “high end” mares don’t pay stud fees. But usually that is only true when they are bred to lesser stallions. The owners of horses like Tapit, War Front, and Bernardini have nothing to gain by handing out free seasons, no matter who the mare may be.