02/28/2014 4:39PM

New York-breds in demand at auctions

Barbara D. Livingston
A New York-bred by Speightstown sells for $300,000 at the Fasig-Tipton Saratoga sale of selected New York-bred yearlings last August.

When the long-awaited opening of Resorts World Casino New York City at Aqueduct became a reality in October 2011, the state’s racing and breeding programs soon benefited from a boost in purses and incentives supported by gaming revenue – and, in turn, the value of a New York-bred horse skyrocketed.

Heading into 2014, the demand for Thoroughbreds foaled and sired in the Empire State remains strong, as evidenced by their continued improvement in the auction market. Since 2011, New York-bred yearlings have experienced a higher year-to-year growth in gross sales and average price than the overall North American market.

“The availability of legislatively mandated VLT [video lottery terminal] funding resulted in the New York Breeding and Development Fund being able to distribute in 2014 approximately twice as much money as it had available to distribute in breeder and stallion awards in 2011,” said Barry Ostrager, president of New York Thoroughbred Breeders Inc. and owner of Questroyal Stud North in Stillwater. “And with the increased purse structure [the New York Racing Association] has, New York-breds are running for unprecedented amounts of money in restricted company, and the quality of New York-breds has increased to the point where a significant number of New York-breds can run in open company.”

[MORE: New York-bred auction results]

Average and median sales figures for New York-bred weanlings and yearlings each rose 20 percent or more during auctions in 2013, while the financials for 2-year-olds have remained consistent since a sharp spike in 2011.

Of particular note, the yearlings of 2013 were the first crop foaled after the opening of the casino at Aqueduct, putting them at the forefront of the rush of mares and stallions to the state to take advantage of soon-to-be-enriched statebred incentives while construction was under way at the racetrack. Ground was broken on the casino in October 2010, prior to the 2011 breeding season, when those yearlings were conceived.

The pool of New York-bred yearlings at auction grew by 47 percent last year, from 364 to 534, while revenue rose 82 percent, from $15,313,800 to $27,924,200. The average sale price rose 24 percent from $42,071 to $52,293, while the median price for a New York-bred yearling of $30,000 was a 20 percent improvement over $25,000 in 2012. All four of those figures were 20-year highs for New York-breds at auction.

“I think we just happened to have had two great things coincide with each other, which is, of course, the slot funds finally coming to fruition as well as an economy that has greatly improved from the beginning of the recession,” said Becky Thomas of Sequel Stallions in Hudson, N.Y. “If you look at our stallion farm, where we are now on booking mares versus where we were five years ago, there’s just no comparison, but the market value of all breeding stock has continued to increase.”

While the gross and average sale figures for New York-breds still trail the overall North American numbers, the state’s rate of growth exceeds the national trends.

The growth in the number of New York-bred yearlings sold in 2013 outpaced the overall North American growth by 35 percentage points. The 82 percent increase in gross sales for New York-bred yearlings was 58 points greater last year than the overall market’s growth, while the average price grew 13 percent more than did the whole of North America’s yearling auction market.

The driving force behind this spike in popularity can be tied to the state’s breeder incentive programs, which, paired with New York’s recently boosted purses, can make it profitable to raise a New York-bred.

According to the NYTB, a New York-foaled and -sired horse who wins a race in the state earns a 30 percent bonus on top of the purse money for his breeder, capped at $40,000 per award. Second- and third-place finishers earn 15 percent. If the runner is foaled in New York but sired by an out-of-state horse, the scale slides down to 15 percent to the winning breeder and 7.5 percent for second and third, capped at $20,000.

Owner awards for statebreds who run in open company at New York tracks are 20 percent for first through third place up to $20,000 if the horse was New York-foaled and -sired. If the horse is not New York-sired, the incentive is 10 percent for finishing in the money, capping at $20,000.

Additionally, the state features a stallion owner incentive of 10 percent of purse money earned for a top-three finisher sired by a registered New York stallion, with a $10,000 cap per award.

Currently, the base purse for a maiden special weight race at Aqueduct is $60,000 in open company (with bonuses of more than $10,000 for statebreds) and $55,000 for maiden races restricted to New York-breds. At last year’s Saratoga meet, open maiden purses approached six figures.

“The program allows people that purchase those horses to have a much greater chance of not just having fun and winning races and making money, but actually turning a profit,” Thomas said. “If you look at the quality of the horses, New York is stepping up, and it’s stepping up because the competition is getting greater. You see a lot of Kentucky people and Florida people that in the past hadn’t used the New York program looking to capitalize on it. They’re not sending their whole herd of mares, but they’re sending mares to New York to hedge their bets.”

While the perks of raising, owning, and selling a New York-bred are as great as they have ever been, Ostrager said it is important for breeders to continue upgrading their broodmare bands and attracting higher-quality stallions in order to maintain, and improve upon, the commercial value of the New York-bred going forward.

“I’m guardedly optimistic that New York-breds will continue to be an increasingly important factor in NYRA racing in both restricted and open company,” Ostrager said. “Everybody’s interested in financial success in the breeding and racing business, and I think breeding and racing New York-breds is often the best opportunity for profit.”