Wealthy horse owners also feeling economic crunch

By JEFFREY McMURRAY | The Associated Press • Published December 13, 2008

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LEXINGTON, Ky. — Horse racing has long been a sport for the rich, but lately even those who can spend more on a horse than most people spend on a house have been struggling with the bottom line.

Racehorses are selling at auction for a fraction of what they did a year ago, if at all. Breeding operations are slashing thousands of dollars off the fees they charge to mate with their top stallions. A volatile market for mares saw one sell for a record $14 million last month while others were discounted by as much as 50 percent.

“We’re just going to have to slug our way through it and wait for better times,” said Robert Clay, owner of Three Chimneys Farm, a major stallion operation in Lexington.

Three Chimneys paid a sum believed to be about $50 million in May for the breeding rights to Big Brown, the Kentucky Derby and Preakness winner who faltered at Belmont to end hopes of a Triple Crown.

Last month, during a complicated ownership dispute, reigning Horse of the Year Curlin, the richest North American racehorse ever, was appraised at $20 million. Most thoroughbred experts consider his value as a stallion equal to or even greater than Big Brown’s.

What changed? The calendar and the stock market, analysts say.

“Big Brown was done in May, when the world was a totally different world,” said Geoffrey Russell, Keeneland’s director of sales. “Now you’re talking about trying to sell or syndicate a horse when there is no cash.”

The Kentucky Equine Education Project, a horse industry advocacy group, says horses are the biggest segment of the state’s agriculture business, representing a $4 billion economic impact. KEEP says the industry has directly or indirectly generated at least 80,000 jobs in Kentucky.

Richard Wilcke, director of the University of Louisville’s equine business program, said the economics of the horse industry aren’t as closely tracked the way they are in other businesses. Yet all indications are it has taken a hit in the past year.

Each November, Keeneland is host to one of the nation’s premier breeding stock auctions, usually a good barometer of where things stand in the thoroughbred industry.

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