HOY - what is the benefit?

Originally Posted by Danzig188

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.

[Danzig]

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.

[Scurlogue Champ]

Originally Posted by oracle80

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.

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.

[Danzig]

Originally Posted by moodwalker

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.

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.

[dalakhani]

Originally Posted by oracle80

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.

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.

[Danzig]

Originally Posted by dalakhani

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.

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.

[dalakhani]

Originally Posted by Danzig188

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.

[Danzig]

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.

[dalakhani]

Originally Posted by Danzig188

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%.

Originally Posted by Danzig188

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.

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.

[Danzig]

'but thats not reality'

bah, reality. lol

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

Originally Posted by oracle80

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.

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.)