Zayat- A little background

[gumtree]

This was meant to be in reply to Kim’s comment #48 and SportArab’s #51 didn’t click the “quote” button.

Fair enough. But I don’t believe you make your living in the industry. An industry and Sport that is teetering on being “viable” in the years to come.

An industry and sport that seems to get much more negative press than good. Right or wrong.

How many people have you brought into the sport and industry in recent years? How much money do you spend at the track supporting racing?

I can tell you this it is very disconcerting when when trying to “recruit” new owners, people that by and large like the sport and the idea of owning a horse of their own say. “I really want to but its just not something I feel comfortable being associated with at this time”.

In other words its not something to “brag about” anymore. Friends and family will give them a hard time for being part of.

[ravenclaw]

[QUOTE=Brooklyncowgirl;8170949]
Yes, one of the partners once made a stupid, unsportsmanlike, alcohol fueled, classless remark about the connections of Tonalist and other contenders in the Belmont Stakes who did not run the Triple Crown gauntlet and for some people that is unforgivable.[/QUOTE]

Steve Coburn also made a stupid, tacky, very insensitive comment before going to Dubai.

[Equibrit]

Interesting Chrome article;
http://www.bloodhorse.com/horse-racing/articles/91583/california-chrome-adjusting-to-newmarket

[LaurieB]

[QUOTE=gumtree;8171194]
Well said. Nice to see someone else got “my point”. I started this thread as a spinoff of the thread “Why isn’t Pharoah being hyped as much?” I was going to titled it that way but thought it would be more interesting to see how people “ran” with it.

I have nothing against the horse nor the owner by and large. I like the horse just don’t like the owner’s “politics”, way of doing business. Just because others in the past have done the same or worse doesn’t make it “right” in my book.
My sense of “fairness, right and wrong” has cost me a lot of money in the horse business. I was told by a VERY well-known and respected “name” in the business when living in Lexington, “you won’t go very far in this business because you are too honest”. So be it, I sleep well at night and honor the good name my father gave me.

“Why was AP listed as a sale instead of an RNA?”
Because it was a “shame, set up” sale from the get go. The horse had the “physical” to make the “cut” on that part of the “selection” process but did not have the pedigree. The dam’s pedigree is VERY weak. I much prefer CCs bottom line. IMO and experience the horse was taken based solely on the “politics” of the business.

They “set up” the sale to boost the sire’s yearling average being from his first crop. I would bet there was little to no “live” money above $100-150,000. They had a high profile agent sign the ticket. Moot now but if the horse had turned out to be just “another” horse the mare’s sales produce record would “read” better than having an “RNA” next to the yearlings sales price. So her next yearling would be more attractive to buyers who don’t know what they are doing and or don’t know how to extrapolate, read between the lines of sales records.

I have been a “professional under bidder” many times over the years to “run up” the price for sellers and or have signed tickets as buyer when it really was an RNA.

My father was COO and executive VP of Fasig Tipton for many years. The Saratoga sale was his “baby” he did not put up with that kind of BS. He would have read Taylor Made and Zayat the “riot act” when it came to light. RNA or nothing in his book of “credibility”.

IMO your “analogy” with I’ll Have Another is spot on. A very good friend of mine and fellow bloodstock agent is the racing manager for Reddam. He spent the afternoon at my farm the day before the Preakness to catch up and spend some “down time”. I told him I hope you win the Preakness but not the Triple Crown. He laughed and understood where I was coming from. Enough said, we dropped the subject and spent rest of the afternoon drinking and talking about other things. I did give up very good seats with him would have been hypocritical. I can tell you this Reddam has been VERY good to him. My “beef” was not with the owner.[/QUOTE]

Gumtree, I read your posts with interest and I appreciate your years of experience in the industry but right now it looks as though you are talking out of both sides of your mouth. It seems unfair for you to criticize Zayat for using the very same business tactics that you yourself have also employed.

[gumtree]

[QUOTE=Flash44;8168729]
Wow, nice. I just choose not to pass judgment on people that I don’t know. There is nothing I can do about who owns what horse, and I see no point in arguing about whether or not a horse “should” win because of it’s connections. Life’s not fair. Learned that a long long time ago.[/QUOTE]

I don’t either. I didn’t make up anything and or state anything that is not on “the record”. Facts and quotes from Mr. Zayat that are part of court transcripts. The published articles regardless of one’s feelings about the publication are highly respected.

They are not on some “no name” blogger’s page.

@SportArab;8168974

And btw, for all those who revere Calumet Farm, if you take a look at the tactics used by Warren Wright to pulverize the baking powder competition, you might realize CF doesn’t belong on a pedestal anymore than any other owner. There were a LOT of dirty tricks. My own opinion is that most people have some sort of dirty laundry and that’s not what I watch horse racing to hear about. I’m into the horses. If the owners could be fun, too, that would be nice. But the horses are primary.

Fair enough. But I don’t believe you make your living in the industry. An industry and Sport that is teetering on being “viable” in the years to come.

An industry and sport that seems to get much more negative press than good. Right or wrong.

How many people have you brought into the sport and industry in recent years? How much money do you spend at the track supporting racing?

I can tell you this it is very disconcerting when when trying to “recruit” new owners, people that by and large like the sport and the idea of owning a horse of their own say. “I really want to but its just not something I feel comfortable being associated with at this time”.

In other words its not something to “brag about” anymore. Friends and family will give them a hard time for being part of.
Last edit

[Kim]

I know people who live and work in the industry and they think the Zayats are good for the sport. As they say, one man’s candy is another man’s poison. And does it really matter who does or doesn’t like them? The horse will either win or lose, irregardless of what some folks think/say on an internet forum. Go Pharoah!

[GypsyLover]

[QUOTE=ravenclaw;8171221]
Steve Coburn also made a stupid, tacky, very insensitive comment before going to Dubai.[/QUOTE]

A lot of people have been beheaded in the ME. Heck, they are doing in here in the US now. Been going on in Europe and Londonistan for a long time. But lets ridicule the guy that points it out rather than the people doing it.

[gumtree]

[QUOTE=LaurieB;8171253]
Gumtree, I read your posts with interest and I appreciate your years of experience in the industry but right now it looks as though you are talking out of both sides of your mouth. It seems unfair for you to criticize Zayat for using the very same business tactics that you yourself have also employed.[/QUOTE]

I did not “criticize” Zayat I was answering, explaining what I “quoted”. If the question had been asked about another horse and seller I would have said the same. Even if it was my horse.

The “practice” of using “straw” bidders and or buyers does not violate the conditions of sale. At least not the last time I read them, and or my sales contract in its entirety. I sell horses at auction pretty much every year so maybe I should brush up to make sure things haven’t changed.

Yes, I have participated in “shame” sales but I am not using the word “shame” in a derogatory sense. It is a well-known “tool” and widely practiced. I stopped “signing” for horses a long time ago when I thought about the “ethics” of doing so. I have come to feel that just because something can be done, doesn’t make it right. As I said in my previous comment it distorts a stallion’s yearling average. It is mainly used as a “marketing tool” for young and or stallions that are on the “bubble”. But it is not “free advertising” because the seller still has to pay commissions on the “buy back” price.

It could be looked at as “stock manipulation”. IMO not much different. Stallions share value and stud fees are very much based in the beginning on their “commercial appeal” until they get runners talking for them.

Of the 48 yearlings offered 43 sold from Pioneer of the Nile’s first crop. American Pharoah was the highest priced yearling. If he had been RNA his name would not have been included in the list of horses sold. And his average would drop somewhat. The highest priced would have been $260,000 a colt bought by Stonestreet. The colt is not much on the racetrack and has been sold by Stonestree. The vast majority of his first crop sold from a low of 2,000 to around $100,000. With a median average of $75,000. Not bad but not that good for a horse that stood for $20,000. Not much above break-even.

I see nothing wrong with being asked to “bid up” a horse for someone. Or having someone “bid up” and or get the horse “going” in the ring. Even if there is a reserve set with the Auctioneer the bidding process sounds more “natural” to seasoned players. Even more so to unseasoned players. A horse that has a reserve set the seller can’t have a “change of heart” once the horse is in the ring. Using a "straw bidder and or bidders the seller can “feel out” the level of interest and “live money” and decide whether to take it or not. Straw bidders are told what price to "take’ the horse to and stop. It may or may not be “handed off” to another “straw” to carry on so the bidding “bonces” around the pavilion. Depending on how things are “orchestrated” the straw bidder may have been given a “signal” from someone in the room to stop bidding and let the horse sell.

Those of us who have been “trading” horses a long time know how to read “between the lines”. Be it in sales results, progeny sales results or in a dam’s pedigree page. We also have a pretty good “ear” for knowing when we are being “run” by the auctioneer and or straw bidders. Another valuable reason to use a bloodstock agent. Even by those who have been in the business a while. Good agents know all of the “players” agents, or sellers. And how they go about things.

I re-read my comment and to me it doesn’t read as a “criticism”. But in all fairness to Mr. Zayat I should have explained worded it differently for those that are not well versed in the business.

So to be clear, fair and balanced what I think was a “set up sale” of A-P should not be considered nefarious. In other words it is not against the rules. Many have done it in the past and many will do it in the future unless the conditions of sale are changed.

The above is not as much a tutorial for you. I know you are in the business. But for others who only have a vague handle on the TB side of “horse trading”.

[Kim]

[QUOTE=GypsyLover;8171510]
A lot of people have been beheaded in the ME. Heck, they are doing in here in the US now. Been going on in Europe and Londonistan for a long time. But lets ridicule the guy that points it out rather than the people doing it.[/QUOTE]

I’m pretty sure the family members of the victims did not find the “joking” about it to be funny.

[SnicklefritzG]

What typically happens if a horse is RNA at an auction?
Sellers takes it home or …?

[LaurieB]

[QUOTE=SnicklefritzG;8171676]
What typically happens if a horse is RNA at an auction?
Sellers takes it home or …?[/QUOTE]

Sometimes the sellers take the horse home. Sometimes people show up back at the barn and buy it privately (though the sale still goes through the sales company.) Usually the private sale price is lower than the unmet reserve but occasionally several people are interested in an unsold horse and they bid the price higher.

Fasig Tipton reports private sales in their results as they happen. Keeneland puts out an “RNA to Sale” list about 2 weeks after a sale. (Keeneland only reports private sales if the buyer gives permission.)

Here’s a link to Keeneland’s recent RNA to Sales Lists: http://www.keeneland.com/sales/rna-sale-reports

[Brooklyncowgirl]

[QUOTE=ravenclaw;8171221]
Steve Coburn also made a stupid, tacky, very insensitive comment before going to Dubai.[/QUOTE]

So the guy’s a jerk. I’ve never met Steve Coburn but I’ve met lots of jerks some of whom are actually very nice people once you get to know them. They just say what’s in their heads at the moment and let fly regardless of who gets hurt.

In our politically correct times, doing that, especially on national television is of course shocking unless you’re Rush Limbaugh and make a living by speaking the unspeakable and offending lots and lots of people.

At any rate, I’ve never heard of financial shenanigans, dishonest business practices, abuse of animals or anything else truly negative around these guys–and Coburn was gracious after the Dubai World Cup. Think about it, he could have started an international incident after his horse lost in an upset to a horse owned by the royal family by alleging that Prince Bishop was juiced or the royal family kidnapped his exercise rider (who went missing the day of the race) or something.

Fortunately for the State Department he didn’t. Maybe the guy’s learning.

[Equibrit]

[QUOTE=gumtree;8171563]

The “practice” of using “straw” bidders and or buyers does not violate the conditions of sale. [/QUOTE]

Not quite true;

"What do the laws in the United States, and what have the courts in the United States, said about such practice? Basically, the courts have consistently stated that:

• [B][I]By the seller bidding, either himself or by proxy, such action constitutes a reserve[/I][/B]

As we know, there are only, and distinctly two types of auctions. We discussed this in our article about the Different Types of Auctions. Auctions are either with reserve, or without reserve; period.
Therefore, if the seller bids then a reserve has been placed on the property selling — thus the auction would have to be a “with reserve” auction, and not a “without reserve” auction.
What does state law say about the seller bidding? First, almost all state law says that if the seller may only bid at a “with reserve” type auction. Secondly, that if the seller wants to reserve the right to bid, that such must be disclosed to the other bidders. Third, that if the seller bids without such disclosure, that the high bidder on property on which the seller bid can take the property at the last good faith bid prior to the seller bidding."

Posted by Mike Brandly, Auctioneer, CAI, AARE inAuction Law, Auction School, Auctions, Contract law,Real property at auction

Uniform Commercial code;

“(4) If the auctioneer knowingly receives a bid on the seller’s behalf or the seller makes or procures such a bid, and notice has not been given that liberty for such bidding is reserved, the buyer may at his option avoid the sale or take the goods at the price of the last good faithbid prior to the completion of the sale. This subsection shall not apply to any bid at a forced sale.”

[LaurieB]

[QUOTE=Equibrit;8172049]
Not quite true;

"What do the laws in the United States, and what have the courts in the United States, said about such practice? Basically, the courts have consistently stated that:

• [B][I]By the seller bidding, either himself or by proxy, such action constitutes a reserve[/I][/B]

As we know, there are only, and distinctly two types of auctions. We discussed this in our article about the Different Types of Auctions. Auctions are either with reserve, or without reserve; period.
Therefore, if the seller bids then a reserve has been placed on the property selling — thus the auction would have to be a “with reserve” auction, and not a “without reserve” auction.
What does state law say about the seller bidding? First, almost all state law says that if the seller may only bid at a “with reserve” type auction. Secondly, that if the seller wants to reserve the right to bid, that such must be disclosed to the other bidders. Third, that if the seller bids without such disclosure, that the high bidder on property on which the seller bid can take the property at the last good faith bid prior to the seller bidding."

Posted by Mike Brandly, Auctioneer, CAI, AARE inAuction Law, Auction School, Auctions, Contract law,Real property at auction

Uniform Commercial code;

“(4) If the auctioneer knowingly receives a bid on the seller’s behalf or the seller makes or procures such a bid, and notice has not been given that liberty for such bidding is reserved, the buyer may at his option avoid the sale or take the goods at the price of the last good faithbid prior to the completion of the sale. This subsection shall not apply to any bid at a forced sale.”[/QUOTE]

No, Gumtree was correct.

Horse auctions commonly use reserves and the fact that they exist is announced every morning in the pre-sale announcements. Whether that reserve is created by a pre-set price or by the owner bidding on his horse, potential buyers are informed that reserves are in place. (Hence the term RNA–reserve not attained.)

Horses sold in dispersals that settle estates or horses being sold to dissolve partnerships are often offered with no reserve, and the auctioneer will announce that information at the time. Otherwise it’s assumed that a reserve is in place.

[Equibrit]

Seller bidding IS illegal when reserves are NOT announced before the sale. Hence, when discovered, the lot is sold to the last legal bidder. Laws state that reserves must be announced, so a reserve cannot be assumed.

[skydy]

[QUOTE=Equibrit;8172599]
Seller bidding IS illegal when reserves are NOT announced before the sale. Hence, when discovered, the lot is sold to the last legal bidder. Laws state that reserves must be announced, so a reserve cannot be assumed.[/QUOTE]

The fact that sellers can bid IS announced at the beginning of most of sales. I have only heard reserves mentioned per single horse when they are “selling without reserve”. Laurie B is correct.

[gumtree]

[QUOTE=Equibrit;8172599]
Seller bidding IS illegal when reserves are NOT announced before the sale. Hence, when discovered, the lot is sold to the last legal bidder. Laws state that reserves must be announced, so a reserve cannot be assumed.[/QUOTE]

I am sorry this is NOT correct. The auctioneer does not have to announce that the horse in the ring is selling with a “reserve”. At least not in this country and or the states I have bought and or sold horses. Some sellers will have the auctioneer announce the horse sells without reserve.

The auctioneers for Tattersalls in England will “announce” during the auction process of a horse in the ring when the bidding has reached or gone over the reserve, “the horse is on the market”.

But it is not done in this country. Seasoned buyers can generally tell/know by the “sound” of the bidding process that the horse is most likely “on the market”.

Any seasoned buyer pretty much assumes just about every horse that goes into the ring has some level of a reserve set.

Most consignors will give a an idea to buyers or agents know to them of what they are looking to get for a horse when inspected at the sales barns.

As far as a seller or “seller’s agent” bidding on the horse the following is from Keeneland’s sales conditions.

BIDDING/DISCLOSURE: In accordance with KRS 330.210 and 355.2-328(4) and other applicable laws, the right to bid in this sale is reserved for all Sellers, including their disclosed and undisclosed Agents, unless otherwise announced at time of sale. Purchasers therefore agree and acknowledge that Sellers have the right to set reserves implemented by the auctioneer upon horses so entered which are not disclosed to Purchasers and also have the right to conduct by-bidding as related to their entries. Sales results reported by Keeneland may or may not reflect the fair market value of any horse(s) going through Keeneland’s sale as, among other reasons, Consignors may inform Keeneland after the sale concerning horses that may have been initially reported as a sale(s) which are, in fact, not a sale.

The highlighted paragraph applies to what started this discussion.

Keeneland’s complete conditions of sale can be found here.

http://www.keeneland.com/sales/conditions-sale

[gumtree]

[QUOTE=Equibrit;8172599]
Seller bidding IS illegal when reserves are NOT announced before the sale. Hence, when discovered, the lot is sold to the last legal bidder. Laws state that reserves must be announced, so a reserve cannot be assumed.[/QUOTE]

I am sorry this is NOT correct. The auctioneer does not have to announce that the horse in the ring is selling with a “reserve”. At least not in this country and or the states I have bought and or sold horses. Some sellers will have the auctioneer announce the horse sells without reserve.

The auctioneers for Tattersalls in England will “announce” during the auction process of a horse in the ring when the bidding has reached or gone over the reserve, “the horse is on the market”. But it is not done in this country. Seasoned buyers can generally tell/know by the “sound” of the bidding process when the horse is most likely “on the market”.

Any seasoned buyer pretty much assumes just about every horse that goes into the ring has some level of a reserve set.

Most consignors will give a an idea to buyers or agents know to them of what they are looking to get for a horse when inspected at the sales barns.

As far as a seller or “seller’s agent” bidding on the horse the following is from Keeneland’s sales conditions.

BIDDING/DISCLOSURE: In accordance with KRS 330.210 and 355.2-328(4) and other applicable laws, the right to bid in this sale is reserved for all Sellers, including their disclosed and undisclosed Agents, unless otherwise announced at time of sale. Purchasers therefore agree and acknowledge that Sellers have the right to set reserves implemented by the auctioneer upon horses so entered which are not disclosed to Purchasers and also have the right to conduct by-bidding as related to their entries. Sales results reported by Keeneland may or may not reflect the fair market value of any horse(s) going through Keeneland’s sale as, among other reasons, Consignors may inform Keeneland after the sale concerning horses that may have been initially reported as a sale(s) which are, in fact, not a sale.

The highlighted paragraph applies to what started this discussion.

Keeneland’s complete conditions of sale can be found here.

http://www.keeneland.com/sales/conditions-sale

[gumtree]

[QUOTE=skydy;8172676]
The fact that sellers can bid IS announced at the beginning of most of sales. I have only heard reserves mentioned per single horse when they are “selling without reserve”. Laurie B is correct.[/QUOTE]

Exactly.

But to be clear to others reading that have not bought at TB auctions and or attended one. The “announcement” or rather the “reading” of certain conditions of sale is made at the beginning of the sale. Not before each horse goes through the ring.

Not to brag but I do have over 30 years of buying and selling horses at auction. In the US, England, Ireland, France, New Zealand, Argentina, Australia and Peru.

[vineyridge]

TB horse auctions sound very dishonest to me. If a horse will not sell below its reserve, any bidding below that figure is just sham. Why not simply start the bidding at the reserve, let the sellers bid once a legitimate bid at the reserve is made by a third party, and accept the results as the true value of the horse.