kickbacks alleged in suit

Originally Posted by Cunningham Racing

There is a "Sales Integrity Task Force" there as you may know, but it is bogus and not moving forward for these very reasons...nobody wants it to......very interesting that the industry doesn't ant to get right.....shows there is as much illegitimate money being made in the sales arena as legitimate business in the sales arena if you ask me.....what a damn shame and a black eye for our sport that we can't even support the groups that are trying to make things fair....

There are ALOT of cheaters in this game, boys....

You're making clear what we all eventually learn ... or should learn ... life isn't fair.

You may achieve wealth ... you may achieve happiness ... you may achieve satisfaction or success ... but if you're trying to achieve fairness ...

... you're on a very wild goose chase.

Originally Posted by Bold Brooklynite

It's more like chicanery than outright theft.

Anyone who spends $1 million on something that he knows nothing about ...

... either has lots of millions ... or is a complete chump.

The scheming trainers and consignors don't put a gun to anyone's head ... the chumps do these things voluntarily.

If you pay $100 for something ... then see it selling for $60 everywhere else ... is the person who sold it to you a thief ... or is it your fault for not being diligent?

It is still ethically not right and that is the bottomline....So just because somebody is a little naive and wants to be involved in the game you are saying that they are the ones at fault?...Comon man..

If it were required for all owners to be educated in thsi game then the industry would be done...flat and ruined.....there would be just a handful of owners...

The bottomline is that when you turnm a new owner on to horse racing that is a beautiful thing - and NO owner who is getting a beginning completely understands the game - especially teh yearling market, etc....they ALL usually do what an advisor - i.e. a trainer or agent - advises them to do....period...

Every owner this game didn't completely understand it at one time...that is natural and why people hire consultants and trustees to DO THE RIGHT THING!

Look at Bob and Beverly Lewis for example - whom have been getting illegitimately financially molested their entire racing careers as owners - they were introduced as new owners in the 90s and became soem of the greatest and most popular owners of all time - yet, all they knew prior to being owners were that they loved the game, and all he knew when he died and all she currently knows is that Silver Charm was a good horse....Believe me, i sat behind them at the Keeneland Sept. sale last year and let me tell you that they were CLUELESS to say the least about what they were looking at....no clue about looks, pedigrees, conformation, etc....

So are you saying people like the Lexis' don't deserve to be treated fairly as owners of this game and taken advantage of because they were naive to the sport and only loved it for it's beauty?......NO

Originally Posted by moodwalker

"Value" in a unproven racing prospect is about the most subjective thing on the planet.

A horse that sells for a million in one sale, might be worth $75,000 in another sale.

The trust is placed with agents to see the best value and know the worth of what they are really buying, and get it for the cheapest price possible for their client in my opinion.

I could be dead wrong, as always.

Nope, you are 110% correct in my opinion....they need to spend money like CFOs would spend money for a large company, or like purchasing managers would spend money for large manufacturers.....the bottomline os that YOU ARE ON THE PAYROLL WORKING FOR SOMEONE AND WHEN YOU ARE SPENDING THEIR MONEY YOU ARE ENTRUSTED TO WORK DILIGENTLY TO BE AS EFFECTIVE AND AS EFFICIENT AS POSSIBLE!!!

How many times has a sale ended and you heard a quote from an agent or a trainer who said, "He was the best indiviual in the sale and I was going to spend whatever I had to get him"?

...I've heard this a few times and I shake my head everytime....

Originally Posted by Bold Brooklynite

Let's face it ... there is no known value or price for any race horse ... one man's million-dollar horse is another man's nag.

How can anyone say, "The horse was only worth $100,000 ... but I paid $200,000"? Hey ... the horse may really be worth nothing ... or millions. A yearling may never get to the races ... or he could be a champion. A broodmare may be barren ... or she may drop five SWs. A champion race horse can go to stud and be Coaltown (0 SWs from 160 foals) ... or Bold Ruler (24% SWs).

The price of anything ... horses, cars, cigarettes, or toothpaste ... is what you're willing to pay for it ... and what someone else is willing to sell it for.

This is true but that should only factor as an opinion when the buyer is spending his OWN money and not an agent spending someone else's money....If you are an agent bidding on a horse for a client, it is your responsibility IMO to value that horse pre-sale based on your opinion and then try to buy him for that price....If that number in your mind is $100,000 and he brings $90,000 - then great....Now, if that number is $300,000 and you actually spend that much for him - then that is a HUGE injustice to your client IMO and it makes you look like a jackass too....

[Rupert Pupkin]

Originally Posted by Danzig188

sounds kinda crappy!! ....of course you'd think most breeders wouldn't set an unrealistic reserve price, as they don't want to take horses home--not good for future business.
thanks for putting that up there, good to know--and i don't think anyone can ever know too much.

At 2 year old sales, often times the seller is not the breeder. The seller is often times a pinhooker who bought the horse as a yearling. If they paid $120,000 for the horse and are into the horse for $140,000, they will probably put a reserve on the horse for $160,000 or so. It depends on the situation. If the horse worked an 1/8th in :10 1/5 and looked great doing it, they may put a $400,000 reserve on the horse. But if the horse just worked mediocre, they will probably put a reserve of about $160,000 on the horse so that they will make a small profit.

Originally Posted by Bold Brooklynite

You're making clear what we all eventually learn ... or should learn ... life isn't fair.

You may achieve wealth ... you may achieve happiness ... you may achieve satisfaction or success ... but if you're trying to achieve fairness ...

... you're on a very wild goose chase.

Fairness is one thing, but blatant and outrageous and rapid incidents that are this deeply interwoven into our game that people are SCARED to acknowledge it and take action against it - well, that is a different story my friend....

Systems can be put in place to catch cheaters in most industries and everybody will have these forms of rogue activity - no matter what type of industry it is....However, when the primary players and figures in our game are the ones who are cheating on a constant basis and doing so by ripping off the very lifeblood (owners) of our sport - then that is a very DEEP problem for our game and much more than little Johnny stealing $60 of petty cash from Cingular......

Originally Posted by Cunningham Racing

Nope, you are 110% correct in my opinion....they need to spend money like CFOs would spend money for a large company, or like purchasing managers would spend money for large manufacturers.....the bottomline os that YOU ARE ON THE PAYROLL WORKING FOR SOMEONE AND WHEN YOU ARE SPENDING THEIR MONEY YOU ARE ENTRUSTED TO WORK DILIGENTLY TO BE AS EFFECTIVE AND AS EFFICIENT AS POSSIBLE!!!

How many times has a sale ended and you heard a quote from an agent or a trainer who said, "He was the best indiviual in the sale and I was going to spend whatever I had to get him"?

...I've heard this a few times and I shake my head everytime....

I will say this, one of the best things you can have as a private sales agent is educated clients. It makes it much easier because if a horse doesn't pan out they are less likely to say you screwed them. Educated clients know in what range a horse is worth and don't just take your word for everything.

Joel's right, this is the biggest problem in the game.
the problem now with racing is that we just don't have enough owners to go around. More than any other problem we face, thats so far ahead at number one that its not even funny.
Here is what fewer owners means and here is how it impacts the business:
1) trainers are under extreme pressure to win early, often, and not lay up a horse who may need laying up. If you don't perform at the highest level, your owner gets 100 phone calls from other trainers(all fighting over the same scraps of meat like hungry dogs) saying they could do better. It leads to horses being pushed too hard and too often.
2) The business has lost its "middle class" to a very large extent. You now have huge owners, and little ones. The number of guys in the middle has shrunk to a record low. A monopoly has been created among a small number of trainers and owners.
3) Fewer owners means fewer horses which means smaller fields which means bad gambling opportunities for bettors and lower handle for racetracks.
Now why do we have fewer owners? Simple, if their early experience is that they get screwed, they just decide to leave the game.

Man would I love to be given the same budget to spend in a year privately for an owner and have him give his "yearling picker outer agent" be given the same budget and see whose purchases earn more and have higher residual value at the end.

[Scurlogue Champ]

Originally Posted by Cunningham Racing

Nope, you are 110% correct in my opinion....they need to spend money like CFOs would spend money for a large company, or like purchasing managers would spend money for large manufacturers.....the bottomline os that YOU ARE ON THE PAYROLL WORKING FOR SOMEONE AND WHEN YOU ARE SPENDING THEIR MONEY YOU ARE ENTRUSTED TO WORK DILIGENTLY TO BE AS EFFECTIVE AND AS EFFICIENT AS POSSIBLE!!!

How many times has a sale ended and you heard a quote from an agent or a trainer who said, "He was the best indiviual in the sale and I was going to spend whatever I had to get him"?

...I've heard this a few times and I shake my head everytime....

I also love that "best individual in the sale" line. hahahaha

OH!!! I almost forgot my very best anecdote!!! And I swear this is true, every word.
ABout 10-12 years ago someone I knew and worked for hired an agent who had a rather peculiar way of "defining" which yearlings were going to be good horses.
I will not tell you the method as it would give away the man's identity if you know the business at all(and if one of you guesses, please don't make the guess here, this is steve's site and we can't be having any lawsuits).
In any case, at a particular sale my friend came home and said he had bought the "best horse in the sale". This horse was purchased for about 50 grand. I looked excitedly at the pedigree and was astonished to see that the horse was by nobody out of an absolutely nobody mare. The man with the methods had told him this was the best one.
Wanna know who had bred the horse and had it consigned? The man's brother!!!!!!!!!!!!!!!!
Gee, do you think that helped determine him as the best horse in the sale somewhat?
The horse raced on the track two years later and finally won a maiden 2500-4000 race at Penn National.

Originally Posted by oracle80

2) The business has lost its "middle class" to a very large extent. You now have huge owners, and little ones. The number of guys in the middle has shrunk to a record low. A monopoly has been created among a small number of trainers and owners.
3) Fewer owners means fewer horses which means smaller fields which means bad gambling opportunities for bettors and lower handle for racetracks.
Now why do we have fewer owners? Simple, if their early experience is that they get screwed, they just decide to leave the game.

This might be your best post ever.......couldn't be any closer to the truth here...and it is that trickle-down effest that people who do not intimately understand the game do not realize.....WE ALL LOSE WHEN PEOPLE CHEAT!!!

Originally Posted by Cunningham Racing

This might be your best post ever.......couldn't be any closer to the truth here

You have no idea how frustrating it is to see a horse worth what the owner is asking for it, call clients or trainers up and try to sell it to them. Hear them say its too much money, and then see them buy one at a two year old in training sale the next week for more.
Remember Cherokee Jewel's debut? Cherokee Run filly at Gulf? I was in love with her and called and they gave me a price which I thought while not a bargain, was fair considering how much i loved her.
Noone would buy her. But they sure bought a bunch of rat two year olds in training that month who won't ever win multiple stakes like Cherokee has since then. They'd already be ahead on Cherokee(including residual value as a broodmare) right now.
The reason i say that is that one of the guys I called said it was too much money. And then at the next two year old in training sale, spent twice that on some horse I haven't seen run yet.
Its exasperating.

Originally Posted by Cunningham Racing

If it were required for all owners to be educated in thsi game then the industry would be done...flat and ruined.....

And the bad part about that would be ... ?

[Sightseek]

Originally Posted by oracle80

If you can find 300 grand that I ever made buying a horse at a markup, you can keep 298 grand of it and just give me two grand to play the Belmont card tomorrow.
Private buying agents probably work as hard as anyone you ever met in the whole industry. Honing skills to determine what talent is, then having someone teach you residual value(thank you Mr Fox, the guy on Steves radio show lately is the guy who taught me when I was younger), then having to make a thousand phone calls that almost always end with no sale.
Then you have to work hard to find clients who trust you and trainers who trust you.
All for 5-10% of a deal.
I see guys wearing suits at saratoga who are nothing more than guys who are guessing at pedigree getting into Limos and heading to the windows with wads of bills that would choke a horse to make bets. Must be nice.
By the way, I have made offers for someone who is being accused on this thread many times. Hes had me make offers in the multimillions, multiple times, and hes never ONCE asked me to do anything wrong. Never ONCE has he asked me to pad a deal, and when i asked him if I should split a commission from a possible sale with him the first time I made an offer for him, he said no, thats your money if you get it, you earn it. Hes aces in my book. And I can only judge people based on how they have acted towards me and with me in dealings.
I think all sides of the story need to be heard here before anyone judges anyone.

I don't know about working as hard as anyone you ever met....you wake up at the crack of dawn and walk around Keeneland looking at 200 something yearlings then tell me how easy it is!

I think the most frusterating thing is when a horse that was recommended to LOTS of people gets passed on and then goes on to win some serious cash and G1's and like you said all of these people are buying unknown horses at auction....makes NO sense!

Nice post Cunningham Racing..you're right, this business more than any other puts the biggest players (the owners) in a lot of risk. To them it is a hobby and they really should be able to trust the people who are "advisors".

[Sightseek]

Originally Posted by Cannon Shell

The biggest problem with horse auctions lies with the autions themselves. The fact is that you do not even have to be registered to bid on a horse nor does the sales company even keep track of the bids outside of the final one. As a matter of fact the bid spotting process often leads to phantom bids being accepted such as a case where two bid spotters call out the same bidder. But in an unregulated forum that the auctions are cheating and fraud are unusually easy to accomplish.
I think its important to understand that very rarely are all bids live. Most of the time a consignor will assign a Reserve price and then have an agent bid the horse up to right below the price. So the unknowing bidder is actually not bidding against a live buyer, he is said to be bidding against the reserve. Being that you dont know what the reserve is beforehand sometimes the consignors agent will play a little russian roulette by continuing to bid past the reserve, known as running the bid up. This is a fact of life in the auction game like it or not. Often the sale is a bogus one such as when Scipion was sold at Saratoga a few years ago. Bred by Mrs. Payson, he was purchased by P. Biancone, agent. He ran and continues to run as the property of Mrs. Payson. There was no actual sale but he was showcased in the Bloodhorse as the sales topper.

All of these things and the other little issue raised by mattress mac could be eliminated if the sales companies would sell horses like art is sold, numbered, registered bidders. the bids could be tracked and recorded so when there is a problem like this there would be a record of who bid on who. Considering the fact that a billion dollar business is so unregulated it is shocking hat it has taken so long for cases like these to be unearthed. Also all agents that are given bidding privilidges should be licensed and subject to loss of license if found guilty of fraud.

But, alas it wont happen because that would decrease the price of horses therefore decreasing the profitability of those in charge of this sport, the breeders, consignors, and sales companies along with several powerful agents and trainers.

Funny thing about this business is that all the things that would make the sport (racing) healthier like dropping averages at the sales are thought to be horrific to the Lexington and Ocala crowd who really are the profiteers in this industry. Like Joel said if prices keep going up and expenses keep going up and scandals (sales and drugs) keep popping up and purses are stagnant, then how long until the bottom drops out?? Despite the press we could all get along very well without The Arabs, Coolmore and Storm Cat.

Excellent ideas.

I'm not sure if this is correct, but buying at auction is the only practice where 'insider trading' is allowable and everyone deep in the game is 'in the know'...I think the approach taken for selling art could indeed stop it.

Originally Posted by Bold Brooklynite

And the bad part about that would be ... ?

I thought you liked horse racing, don't you....the bad part would be the industry would be extinct because there are only a handful of owners out there who actually understand the game at a high level.....I would say that it is safe to say that over 90% of owners in the industry have an average to very low all-around knowledge of the game.....most just think its fun and they rely on their expert consultants to know the game....

Originally Posted by Sightseek

I don't know about working as hard as anyone you ever met....you wake up at the crack of dawn and walk around Keeneland looking at 200 something yearlings then tell me how easy it is!

Well, I will say that most of the big-shot agents don't even walk the grounds checking hundreds of yearlings in serach of the good ones.....most of them short-list horses now, which for you who don't understand means that they outsource hire other agents to go out (the agents split the ones they review by either catalog number or barns usually) in the first days of showing on the grounds during a sales week and disqualify 90+% of the horses in the sale based on what that particular big-shot pinhooker wants in terms of specifications - such as conformation, size, precociousness, etc.....

Then, after the big-shot agent has his 3 or 4 people review every horse in the sale, he consolidates the data and THEN actually goes out to check a very limited group of prospects......I know a guy who short-lists for a popular agent I won't name, and he said that this guy's grading system is SO strict that he usually will only qualify about 10% of the horses he looks at.....

Buzz Chace, Demi....most of the big dogs do this....so, I guess the point is that they never actually slave over hundreds of horses searching for the jewel in the stack.....as a matter of fact, most of the horses actually come to the big buyers because the consignors will call or seek out the big money clients when they know they have something the market is going to really like....

Originally Posted by Cunningham Racing

I thought you liked horse racing, don't you....the bad part would be the industry would be extinct

Are you really, really sure that would be bad?

Wouldn't it also mean ... that all the losers and psychotics who inhabit this forum ... everyone except myself ... would have to find something else to do with their time ... which likely would result in major improvements in their pathetic lives?

Look on the bright side!

[SentToStud]

Originally Posted by Bold Brooklynite

Are you really, really sure that would be bad?

Wouldn't it also mean ... that all the losers and psychotics who inhabit this forum ... everyone except myself ... would have to find something else to do with their time ... which likely would result in major improvements in their pathetic lives?

Look on the bright side!

Congratulations. This is the stupidest thing you've said all day.

Originally Posted by Bold Brooklynite

Are you really, really sure that would be bad?

Wouldn't it also mean ... that all the losers and psychotics who inhabit this forum ... everyone except myself ... would have to find something else to do with their time ... which likely would result in major improvements in their pathetic lives?

Look on the bright side!

All I can say is wow...hopefully you're joking sir....

Originally Posted by Cunningham Racing

All I can say is wow...hopefully you're joking sir....

Joking?

Absolutely not ... I'm deadly ... hoo-hoo-hoo-HAY-ho ... hoo-hoo-hoo-HAY-ho ... serious.