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Stallion Owner Strategies for Limited Breeders Auctions



by Wendy Lewis

 

Limited breeders auctions are a popular way to generate large purses for competition. The basic idea is that stallion owners donate a breeding season to the limited and it is auctioned off with the proceeds going to the limited and not to the stallion owner. The following year the babies are shown in hand to compete for these large purses.

 

The idea was formed by Dr. Rick Luft and originated at the Wisconsin Limited Breeders Futurity in 1987. This futurity has a long history and has made this horse show grow year after year. In more recent years the All American Cup with Jim Aikman’s inspiration and perspiration has raised huge purses and payouts over $300,000 that make any horse person of any breed take a look at limited breeders as an opportunity to play and win some real cash. Melissa Moore heads the Bluegrass Futurity that generates near $100,000 in purse.

 

These are what can be called the big three, but there are numerous local limited opportunities that may be a better bet for the first timer to play and get the feel for how it works. Also, the smaller limiteds may actually have better odds with fewer entries. So although the huge numbers sound better, the payout and your chances of winning may be better in a purse of $15,000 to $30,000 which is typical of many of the smaller limiteds.

 

I was asked to address the issue of using limited stallion service auctions as a marketing tool by several individuals. Having won $50,000 in three years with Sky King colts, I am naturally supportive of the limiteds. I am not a big breeder. I own three mares and one stallion. I hope to encourage the average individual to try raising a show colt and seeing him through to the show ring. There is nothing more rewarding in the horse business then designing the product and seeing it succeed and have a useful rewarding life. I firmly believe that the limiteds are a boon to the industry and can really help promote young stallions. Some stallion owners feel that there is nothing in it for them and that people are just shopping for a cheap stud fee, so they will not donate services. They feel that all of these donated services take money out of their pocket. I have in the last several years seen this issue from both sides of the fence. I think that there are several strategies that can be utilized to prevent the seasons from “going cheap” yet gets the colts out there to be shown and seen earlier in a stallion’s career.

 

I think we can agree that the best promotion for your stud is to get a good colt in the ring. Many of the mare owners that participate in limiteds have mares with good produce records and exceptional pedigrees so to have you studs season purchased by these mare owners can really be a shot in the arm if the colt is nice.

 

My first piece of advice is if you cannot purchase the breeding back at a fair price then you should not donate it. Basically you are buying an entry fee to the limited and if you win it is a huge return on the investment. My husband is a gambler, but definitely not a horseman and he loves the odds and is willing to shell out $1000 to about any of the limiteds.  Odds are in your favor to win money back plus you have a colt. It’s a win-win situation.

 

Most of the auctions start the bidding at half of the advertised stud fee, but this can be changed by the stallion owner at the time of the donation of the service. As a cheap season buyer, this was really attractive to me. Now as the stallion owner I see the other side of the coin.

 

What I would suggest is that you, being the stallion, owner bid the season up to a certain amount above the minimum or ideally no less than the published dollar amount of the season. This will al least generate the illusion of interest and believe me momentum, buzz and excitement are critical in stallion promotion. Many people have no idea about breeding and just stick their finger in the wind to make a breeding choice.  My current policy for Sky King is to not let the breeding sell for less than the advertised stud fee of $1500 which will include 2 shipments of semen, so the season will not go for less than $1100(accounting for $200 per shipment) If it goes higher then great, if not then you own the entry. Now once you own the entry you can do what you want with it. You can keep it and nominate your mare or you can sell it with a breeding that has been purchased to your stallion as an incentive. This will refill your bank and you can be very selective to which mare you offer this “bonus”. For example if I bought back Sky King and wanted to breed him to a certain mare I could get on the phone and solicit to sell this breeding with the limited entry. This would get colts on the ground to better mares. I could negotiate the cost and sell the entire thing or I could negotiate to get a piece of the winnings. Another strategy to support the limiteds and protect your stallion is to get that breeding sold before the auction. Contact people who have bred to your stallion before and negotiate a minimum bid and have this published in the sale catalog. Maybe the breeding will sell for more, but at least you have it minimally protected.

 

Another problem with letting the seasons go cheap is that I think mare owners will try to get a certain stud for cheap at several limited and this discourages them from just booking the mare. Then they may see another stud at the auction and go ahead and buy that one instead of the one they wanted.

 

Having attended these auctions many times it is very telling and discouraging to have no one bid on your stallion. We need to support these limiteds and be creative to protect our stallions from the inevitable “cheap stud fee” shopper. These colts are usually not shown and are often out of inferior mares. Sometimes there are no options, but it just takes a little creative thinking and the energy to make some calls to change the approach. This not only will benefit your stallion, it will benefit the stallion service auctions that provide a huge incentive to the breeder. We need to do all we can to keep this alive and healthy in our industry. If these tactics are successful, then maybe more stallion owners will participate. I know that the late Sondra Moll hated these auctions for the reasons that I expressed earlier. If she would have used some of these tools we may have discovered 42nd Street much earlier in his breeding career.

 

Another issue is the opportunity for the stallion owner to “buy in” a second entry into the class. Many of the limiteds offer this as an incentive to stallion owners. This is severely underutilized in my opinion. Even with the huge purse of the All American Cup, the stallion owner did not take advantage of a second opportunity with less than 30% nominating a mare for $1000. Other limiteds have different stallion owner entry fees that are less. The Penn Ohio is $500 and the Bluegrass is $1000 that is not due until June so you can take a look at the foal. Wisconsin does not allow a buy in. The others I am not familiar with their various rules. Again the odds are so good you cannot afford to take the risk. You can sell this foal or mare in foal and just use this as a marketing tool. You can sell this “buy in” entry to a good customer who routinely breeds a nice mare and on and on. We are only limited by our imaginations. I have shared this entry and the agreements are on paper. I will train the foal and ship the foal. After the show the expenses are paid, the winnings are divided and maybe not equally depending on the agreement. The partner will pay things like the futurity nominations and the shoeing bill. The scenarios are endless.

 

The last thing that needs to be addressed is to the mare owner. The mare owner is buying a stallion service that has the additional benefit of the entry to the limited class. If your mare does not get in foal, you still own the entry. Therefore, you have some options. The first call you should make is to the stallion owner. The stallion owner may choose to buy the entry back or negotiate a deal on the entry to share the winnings and expenses. I have in the past leased a mare that was in foal to fulfill the entry. The stallion owner should negotiate rebreeding details for that mare. I have had customers that sold the entry back to the stallion owner. The stallion owner can then resell or utilize the entry.

 

Best of luck with your breeding decisions, it is so rewarding when it works.
Don’t hesitate to contact your limited stake sponsors or futurity organizers to get help and advice. To find these contacts, call the ASHA at 859-259-2742.




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