HOY - what is the benefit?
 

Leave it to stupid me to ask a stupid question. I am curious as to what the benefits are to having your horse, from a trainer or owners perspective, named HOY.

Versus, lets say, a couple of Grade 1 wins, 1 or 2 legs of the Triple Crown, a Breeder's Cup win. You feelin what I am askin?

In other words, does this award really help this horse bring in a lot more money once it retires versus the above? Or is it kinda like an ESPY, cool on the shelf but not a lot of value? I am thinking it must be important otherwise the industry would not track it the way they do all year.

Thanks for answering cause all this debating about who should be HOY has my interest perked.

just ask alysheba....

i honestly don't know that it adds a whole lot as far as stud fee, most fees are announced by the time the awards come out. seems initial fees are set by hype, races won, and pedigree of the horse, but mostly by demand....i don't think GZ went from starting at a lower fee to 200k because he won HOY.

i'd imagine it's just a fun thing to win, but in the grand scheme of things, it only means you'll be listed in a record books somewhere, and someone has an extra trophy to dust.

It means millions of dollars

it means very little for a well-bred horse like bernardini. his fee will not go up because of the hoy honors. it helps horses like our old friend saint liam.

It means 10's of millions in some cases.
Advertising that you stand "champion" so and so increases the stud fee.
Its the goal of the whole thing. Unless you race a gelding, in that case its a nice dinner at the ceremony and a statue to put on the shelf.

millions?

most syndication deals are done far ahead of when HOY is awarded. so how can it mean millions?

i'd imagine most post-bcc deals for horses are done with the presumption everyone knows who will win hoy. but once it's given out....that's a little late, isn't it? mares have already been covered by then.

also, i seriously doubt smartys syndication could have gone above what the value was set at if he'd won HOY. there is a ceiling.


but hey, i could be wrong. have been before.

Zieg you completely struck out here.
I've worked on deals before with stallions.
There are incentive clauses that are in the contract that state that the buyer pays X amount more for being a champion, being HOY, etc.
When St Liam won last year, believe me, they weren't just screaming about the purse money in the BCC. They got a HUGE payout from the buyer for that.
Its industry standard Zieg.

well, yeah, true...

was reading the other day about all the clauses you can add to a contract to cover different occurrences on the track.

anything that forces up demand for a horse would make his value increase. but then after a year or two, for every giants causeway, who saw several rate increase announcements in one spring for the next year, you have a hundred alyshebas. so long term, i don't think HOY means a thing. probably not even much past the short term. once you get past the honeymoon, it's all about performance by the youngsters.

What about when Leroidesanimaux got crowned? You think his price didn't change.

A little bird told me that the farm paid the owners an extra couple of million not to run him one more time, just to let him come on to the farm.

I can't be sure, but apparently they wanted to run him in one more big purse race and the farm just paid them what he would have made if he won and then some.

Don't quote me though.

OK ... here's the real simple answer ...

... in most years ... it's widely known who will be named Horse Of The Year long in advance of the voting ... so ...

... by the time the actual voting takes place ... and is announced ... retirement plans have long been finalized ... and the actual designation means little ... especially nowadays ... when few horses race again after winning the honor.

Doesnt it depend on the horse though?

Did Smarty's connections lose any money when he wasnt named HOY? Would Fusao Segiguchi (sp?) gotten any more for Fusaichi Pegasus if he had won HOY? How about PG? Was he going to be worth any more?

I think it makes a much bigger difference to the older horses than it does for the three year olds.

That's true only if negotiations take place very early in the year.

No one negotiated a HOTY bonus for Saint Liam after he won the BC Classic.

In either case ... his value would have been about the same ... to wit ...

Early year value + Bonus = Late year value without bonus.

(Bold Brooklynite's Equation ... chisel it in stone.)

breeders would rather they didn't race any more after a deal...after all, it's easier to get a broodmare owner to commit to a horse that they're close to 100% sure will be there, racing anymore is certainly a hazard to the horses health, and a loss would dampen enthusiasm somewhat. and a broodmare owner doesn't want to commit, something happens, and hopefully the farm can help them out, since other stallions are already booked.

glad i'm not in that business, the stresses would be mind-boggling.

this is not correct. there are often escalators in contracts. you have to remember a decent horse that might stand for $25K can boost his fee to $50K with the honor. that means millions for the first two to three years.

See my Post #12 on this thread ...

... it addresses those circumstances.

syndication deals will only go as high as the breeder thinks he can recoup in a couple years time....that's why fupeg and some others shuttle. ya gotta cover as many mares as fast as possible while the honeymoon lasts, and before the foals start hitting the ground, going to sales, and then running. plus, you have a 'bubble' period, between the first flush of excitement when a hyped horse retires and gets a lot of attention, and when his foals start running and (hopefully) winning....many horses see a reduction in the fee to keep interest, and compete with new retirees.
BUT they hope the babies can win, and thus bring about more hype....

fupeg was in the 60's in syndication fees, they had to get that money back ASAP in case he tanked...
smarty was in the '30s--no doubt the resistance by the owners to shuttling hurt his initial syndication.

Exactly. Thats my point. Generally three year olds are going to be much more hyped than older horses regardless of Eclipse awards. Thats why i say the award affects the syndication value of older horses more so than three year olds.

unfortunately i have never owned one, but you are partially correct that it is an award for bragging rights more than for fees.

i wasn't arguing with ya dal....

and i can't help but wonder if volponi would have gotten much more response had he lucked into hoy due to winning the classic....i don't see it!



hoy might help at first, but long term...no. look how many former hoys are out of country now. they wouldnt be there if there was demand for them here.

Agreed 100%.

Bold you are dead wrong, completely wrong.
Any contract done on a horse who isn't doen racing yet includes bonuses.
I can tell you this for a fact.
Its the only way the deals get done.
Noone would sell breeding rights before the horse was done racing without them.
When you work on one of these deals, gimme a ring.

It's simply a matter of timing ... when negotiattions take place toward the end of the year ... it's usually known if the stallion prospect has already earned HOTY ... so the actual award makes little difference.

If negotiations take place early in the year ... there'll be a bonus clause. If the horse doesn't earn HOTY ... there's no bonus. If he does earn HOTY ... the bonus applies ... but ... the owner probably would have done just as well without the bonus if he had waited 'til the end of the racing season.

yeah he would got a bump up. Fact is that you get three free years of stud fees before anyone finds out how good the horses offspring are Zieg.
Works like this, 110 x3 is the accepted formula. If the horse gets a grade one lets say, after the deal is done. the bonus is generally one mill.
Both sides are extremely happy. Seller bumps the fee 5 g's. 5,000 x 330, well you do the math. even after paying the bonus the buyer still makes out better.
Trust me, you guys are sitting there trying to find examples where it woudnt have made sense, but thats not reality.
The reality is that bonuses are all included in stud deals. Don't you guys get it? WHy do you think these thinsg take so long to settle? If the deals just went to teh highets bidder, they would take 3 days. When a horse who is still racing has a stud deal done, 1/2 the paperwork is about the bonuses.
Ask Lansdon about his two biggies and the potential they had.

'but thats not reality'

bah, reality. lol

i guess i was mostly just thinking long term...

LOL!!
Long term in sire deals is 3 years.
Zieg heres the deal. They wnat to insure that if the sire is a total bust that they don't get killed.
Take the horses stud fee, multiply it by 330. Thats about what they paid(a little more, but usually no more than 25% more).
Lets take rock hard ten and St Liam. Both entered stud at 50 g's. They paid about 15-20 mill for those sires. Thats how it works.
Now lets take a horse we have heard about what they paid for him.
Lets take Smarty Jones.
he stands for 100 g's. Thats 33 million(and was announced at what? 36 mill-40 mill). You see Zieg?
This is ain't magic or random numbers that they set. Its based on a math formula.
The reason that deals take a while is trying to estimate what a grade one, or two grade one wins, or a championship, or a BC win, or a championship means in terms of resid. Yo have to get both sides to agree what those events occurring theoretically would mean.

yeah, i know about the stud fee and all the math....

let's put it this way..

smarty was syndicated well before the end of the year. stud fee announced. had he ended up winning hoy, they can't raise the fee--do they raise the book to make the difference if they have to pay a bonus?? breed to 110 rather than 100 so they don't lose money on that part of it?

You're right ...

... and so am I ... see Post #22.

Zieg you are incorrect.
Smarty was done after the TC was over. It was already a given that he would be 3Yo champ. Would there have beena bonus paid had he won HOY? You bet your ass. because they woulda bumped it up 25 g's.
Look at the Zapper. His fee went way up after he won the BC and got HOY.

You really aren't.
There are lots more clauses than just HOY.
In some cases:
Win a grade one(assuming the horse hasn't won on yet)- one mill
every additional grade one- 1 mill
wins championship- 1-3 mill
wins HOY- 1-5 mill

Thats how these deals are done.
Bonus clauses became popular because farms wanted to gamble on a prospect who had upside. Owners didn't wanna lose all that possible upside and would wait until the horse was done racing to do a deal.
On these clauses, they way they are designed, believe me the last words spoken by the farm that buys the rights are "Man, I sure hope I get to send you another 5 million". Seller "me too!!"

no, that's what i mean, if he got HOTY....everybody knew he had 3 yo champ wrapped up...and i know there would be a bonus...what i'm asking is how the farm recoups THAT bonus if the stud fee is announced before they win HOTY. or do they just go up and hope those already committed understand the rise in fee?? it's not as tho the farm is going to take a hit if they pay out an extra incentive. that's what i'm wondering about...if a deal is made, broodmares lining up like single mommas at the wic counter....how do the breeders cover that other bonus they now have to pay?

Zieg,
I understand now what you are asking.
But go ahead and look. Find me ONE example where the stud fee was announced before the horse was offically retired. Happy Hunting. You'll be searching for a needle in a haystack. Trust me, those fees ain't announced until the fat lady sings.

Winning HOY was huge for Saint Liam. It made his value much greater and that deal was made late in the year. After he won the BC Classic, it was a foregone conclusion that he would win HOY. I don't know if there was any clause in the contract about the terms changing if he somehow didn't win HOY. I can tell you that winning HOY always makes a difference in the value of the horse. Winning HOY is a big deal.

I don't think that Kurt's question was a dumb question at all. I have been in the business for a long time and didn't even know the answer of that question until last year. I actually asked one of my trainers who has been involved in many syndications deal that same question. I asked him if HOY meant anything. He told me it makes the horse's value for breeding go way up. He said winning HOY is a huge deal monetarily.

but officially retired isn't necessarily after the bc, or after eclipse awards. that's why i was asking.

And you are saying that a horse with even a shot at an eclipse wont officially retire until the eclipse awards are announced?

I really am ...

... if a horse runs well enough to earn all the bonuses ... his owner would probably have gotten about the same if he waited until the racing season was over to talk turkey.

If the horse doesn't run well enough to earn any bonuses ... well ... there are no bonuses ... so the owner doesn't get any more money.

In either case ... the owner winds up with about the same amount of money ... if he syndicates early in the year ... or if he waits 'til the end of the year.

Early season + Bonus(es) = Late season without bonus(es)

Chisled in stone for a good reason.

Zieg,
the money is deposited upon official announcement. The stud fees are based on a "pretty good idea" of what will occur. If there is a question in the voting. The stud fee will be announced with the fee that would be justified with the winning of the award. If the award is lost on the vote, word goes out to interested parties that they can get to the horse "a little cheaper".

No,
but at the point there is usually a high degree of certainty about what will transpire at the awards ceremony.
Read my explanation to Zieg on how that situation is dealt with.
Dala the fees are never set to low, always too high. You can always tell folks that they can get to one cheaper. This is commonplace. Horses are often available at lower stud fees than advertised in the first few years. especially if the the mare you bring is suitable and they want her in the book.

Thanks for the info. Very interesting.

wow, this turned out to be a great read. very informative, just wanted to say thanks.