. . . really?
http://www.thoroughbreddailynews.com/zayats-test-juvenile-market/
Seems like they’re having fun and learning as they go. Unusual, but do you think there is a problem?
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Why not? It’s a business.
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“learning as they go”
They must be slow learners because he has been in the business a pretty long time.
The $750 “sale” of hip 118 considering the connections and their history of sham “sales”. Like the high profile sale to a straw “name” buyer of American Pharoah as a yearling at Saratoga. Bodemeister is part owned by Zayat also. Given Zayat’s PPs this “sale” doesn’t pass the sniff test IMO and experience.
$750,000 for a Bodemeister out of a old and moderate family is a lot of money. Bodemeister ran 6 times won 1 graded stake. He’s not exactly settting the world on fire with his first crop.
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Zayat has also gone bottoms up, in a HUGE way, at least once. It would be a real shame if it happened again, honestly. We have no real way of ascertaining if he is playing with his own money, or money that he is borrowing from some bank, but he plays really big, and then, he has gone down. Here’s hoping it is nothing but a success for them and everyone involved.
ETA- Ask Fifth Third bank- 34 million dollar loss…
Don’t need to ask nor read about the 5th 3rd. I was living in Lex, banking with them and a bank exc was a friend. He screwed a lot of little guys I know with his horse business bankruptcy. All the while living the life in his mutlimilllion dollar house in NJ.
Taylor Made and another high profile farm through him and his horses out for not paying recently. Long after the 5th 3rd BS was settled. Damn shame his name is associated with a Triple Crown winner. The lord works in strange ways.
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I found this quote odd, as they seem to want to win the classics,
“But one thing I’ve learned is that everyone going to these sales is very, very sharp and they know a good horse from a bad horse, so I entered the best horses we have on our farm right now. We want to see where the chips fall.”
Good horses are selling for good money, so let’s see what happens. Who knows what their balance sheet looks like, maybe they have a cash flow issue, which is usually the case when you see stock liquidated. But I have no idea how they have their horse business organized, so I am guessing.
PB: I think what surprised me the most was the apparently sudden decision by the Zayats. Preparing horses for sale is well planned, arduous, and time consuming. The fact that turf writers didn’t have a hint of the forth coming decision is quite telling.
Sitting back and sipping…
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Not knowing them well, that is one of the reasons why they seem to me to be learning as they go.
Of course I’m not well enough versed in the more dubious aspects of sales to assume they’re up to no good.
I had forgotten their buy back of A.P. but that’s not very uncommon is it?
As for their financial and business ethics, I’ve learned not to look behind the ownership curtain if I can help it. It can be really ugly back there and can spoil my enjoyment of a nice horse. Loved watching A.P. and tried to neither read nor hear anything more of his owners than I had done already.
My original post was not intended to be malicious and had nothing to do with what I think of their business dealings. I was just surprised. Pinhooking is a specialized sector of the sales industry and very risky. I could be wrong but the Zayats don’t impress me as having either the talent or character to succeed at this over the long run. They are the typical owner types who need professionals at their side. My first impression was they are in financial trouble again, but I really have no idea.
Let’s see how this turns out. If Palm Beach dozes off sitting (on a beach?) and spills her sipping drink we will have a clue.
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I think we may agree that they are “learning as they go”. I probably should have quoted Gumtree’s post, not yours.
It will indeed be interesting to see if they do well or if, as you say, they don’t have the specialized experience to be successful pinhookers and will find themselves in over their heads.
Do they have an advantage that professional pinhookers don’t because they can race what they can’t sell? Not that they wouldn’t take a financial beating, but they may end up with a good racehorse once in a while.
Do most professional pinhookers have racing stables?
Skydy: I can’t think of any pinhookers who would risk their hard earned money by racing. That would make them owners.:yes:
“Of course I’m not well enough versed in the more dubious aspects of sales to assume they’re up to no good”
“I had forgotten their buy back of A.P. but that’s not very uncommon is it?”
To be clear and fair. “Buying back” a horse is not unusual/uncommon and is not dubious per-say. There are two types of “buy backs”, the most common and recognizable is “RNA” reserve not attained. The way is to have/hire someone bid on the horse with no intention of actually buying it. They will be given a number/price to bid up to and stop. If someone makes one more bid the horse sells. If not the “straw buyer” signs the sales ticket and their name goes down on the results as the “buyer”. Sometimes other “bidders” are used to make the auction process lively and look legit. Other times the “straw buyer” is bidding against the reserve. A “number” they know.
Both of the above is perfectly “legal” under the rules of the American horse auction system and state’s auction laws where the major sales companies conduct business.
This is almost always done to “manipulate” the value of the selling horse’s dam. Or more so to increase a stallion’s sale average. Commercial breeders use a number of different statistics when choosing a stallion. With young, freshman stallions who have no horses of racing age, no race records to judge his future viability in the sales ring. His sales yearling average is pretty much the only statistic breeders have to use. That and the “names” that buy the yearlings.
“Artificially” inflating some yearling sales prices can and does change a stallions yearling sales average. Good “advertising” but it doesn’t come cheap. Because in almost all cases they still have to pay the full 5% sale commission. But this can be negotiated with the sales companies.
It also changes “how” the Sales Results “reads”. The sales results are a major part of analyzing the general health and over all vitality of the breeding industry. None disclosed buy backs are not recorded as “not sold”, If you take out the high priced “sham” sales price of a number of horses the over all sale average can and does drop pretty dramatically.
When breeders look over a stallion’s sales results and see that the majority of his get through the ring sell that is a plus. But say 5 out of 20, 25% don’t actually sell that is a “knock”.
Buyers of yearlings base what they are willing to, have to give/pay based on a number of factors. One of which is the stallion’s yearling average.
I and others see this sort of thing as “stock manipulation”. Something the SEC goes after people for in the Stock Market. I and others don’t see it being any different.
In the world of “Wall Street” if a “name” brokerage house is buying up stock of XYZ company others take notice. More times than not they will jump on the bank wagon.
The same can and does happen when a “name” agent pays big money for yearling/s by an un-established stallion.
If one reads the daily race results in the “trades” and the winner was sold at auction it gives the “sales price”. It also gives the breeders name and the owners name. When both are the same and the “sale” was not listed as a RNA the horse did not “sell”. I see this all the time.
This is not Zayat’s first selling trip to the 2 year old in training sale. He has “sold” others that in the end were buy backs. Expensive buy backs that ended up running in his name.
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Thanks Gumtree. It seems we are rather on the same page.
The owner breeder “sale” that is really a buy back is nothing new, it’s a well known phenomenon that does skew the stallion stats, but since I am aware of it and have never invested in racehorses, it shouldn’t be a great surprise to anyone who is actually breeding or buying. They do spell it out loud at the beginning of every sale and it is written as well in the catalog conditions of sale.
I would hope that people who buy or breed TBs, especially if they are absolute beginners, have enough intelligence to study up a bit on the subject and/or to solicit some sort of advice from someone who has a clue. Do people really breed mares to a particular stallion solely from his yearling or 2 yr old sale average statistics?
If people buy or breed horses using an algorithm they will most likely get what they deserve, results commensurate with the effort they have expended.
Gumtree,it seems you have implied that the only purpose of a reserve is to manipulate prices or artificially inflate value.
We use reserves for a simpler and less nefarious reason. Every time we sell a horse we know what it is worth to us. If a bidder is willing to meet that price, the horse sells. If not, we are happy to keep it.
This isn’t market manipulation. It’s no different than putting a price on any horse that is for sale.
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LaurieB, I thought Gumtree was objecting not to RNA but to sales that are a “buy back” in a manner to avoid an RNA designation, perhaps enlisting someone to bid up the price or doing so themselves.
I don’t see the merits of that objection because the people who are buying and breeding surely should be aware of the practice. It has been done before it happened with the Zayats and A.P.
I think that people who buy at auction or breed, should take the time to educate themselves about what they are doing. If they don’t care enough to expend the effort to do so?.. it’s on them. It takes only a little effort to find who sold the horse, who bought the horse, and who owns it after the sale.
I think perhaps Gumtree is worried about absolute beginners being bamboozled by statistics? I neither own nor breed racehorses,yet from my casual interest alone I am aware of the practice that keeps a horse from showing up as RNA. The rules of sale are in black and white for everyone to see and if one can’t bother to read them, I’ve heard Keeneland and Fasig Tipton read them out loud…
skydy, I suppose you’re right. My mistake.
definitely agree with you that people who intend to participate in TB sales or any aspect of the industry should educate themselves pretty thoroughly first. I tend to think that beginners are less often bamboozled by statistic than they are by bloodstock agents whom they thought they could trust.
I have found what seems clear to the person writing, commenting isn’t always as clear to those reading. An “RNA” is straight up, clear to all and are not including in a sales, stallion or mare’s statistics as a “sold horse”
Up until the mid 80s, can’t remember exactly. Keeneland included the RNA price in their result average. Something that their competitor Fasig Tipton didn’t.
Having worked with/for a number of people over the years. I have been surprised how many that had been in the business for a while really didn’t have a very good understanding of “things”. Very surprised at times.
Though I haven’t done much “agent” work in a few years. Buying and running a farm is pretty time consuming. Especially considering our “timing” couldn’t have been worse purchasing and setting up less than 2 years before the financial crash.
I hear what you are saying about “bloodstock agents”. Unfortunately this is true at times. But I would like to think there are more good apples than bad. But I know where the bodies are buried and who has skeletons in their closet.But in all fairness some including myself one time were left “holding the bag”. With no bases in fact to what was being talked about on the “streets” of Lexington.
I “trusted” a couple of clients that I did very well for. My compensation was on the back end, performance based. They ended up screwing me out of my fair and agreed compensation. I guess all’s fair in love and war?
Good agents make decent money. But as the old adage says, " if you stockbroker, agent is driving a better “car” than you, better beware".
As I said in my reply to LaurieB a lot of people in the sport and business have a tendency to take statistics on their face value. It’s not their principle business and are not very good at extrapolating, reading between the lines. Even the pundits who are paid to write about these things a nor well versed in reading “between the lines”. Very few if any have had any skin in the game. Nor have they done much of the “walk”.
That’s no saying people who are “students” of the sport and business don’t have a pretty good idea of how things work. When I “quote” someone’s comment it doesn’t mean I don’t think they “know” what they are talking about. I quote to so I can elaborate, explain in more detail the bigger picture for others who maybe reading various comments to help with their understanding of “insider speak”.
“Do people really breed mares to a particular stallion solely from his yearling or 2 yr old sale average statistics?”
Not entirely but if you are a commercial breeder considering a “unproven” meaning a stallion who doesn’t have anything on the race track yet. There isn’t a lot to go off of. So, yes these “numbers” are important, very important to the stallion owner. A stallion with 2 year olds on the come is considered a “bubble horse”. More so then ever these days. If their sales numbers are moderate, no “names” buying them. His book could be very difficult to fill.
I took a chance on Scat Daddy on his “bubble year”. His “numbers” were good, I looked at enough of his yearlings, and talked with others who had also. I made some calls to find out how his early 2 year olds were doing and got good feed back. I was offered a contract for the very low price of $7,500. Below advertised and well below his “opening fee”.
Did the same with Uncle Mo, got a $15,000 contract for him. Unfortunately the mare “red bagged” on me. That still hurts!!!
