‘Our clients have got the appetite for them, so you have got to keep buying them’
Is the influx of internationals detrimental to the Australian yearling market?
Victoria Derby Day, slated by many as the country’s most prestigious race day, is upon us and so too is the annual debate about Australia’s apparent inability to breed quality stayers capable of challenging the growing influx of internationals who are taking out our biggest races with increasing regularity.
Many of those imports are owned by Australians and the skyrocketing international spend has led to the question being posed about whether that demand and diverted financial investment is negatively impacting on the Australian yearling market.
Sir Dragonet (Camelot), Saturday’s Cox Plate (Gr 1, 2040m) winner, recouped his purchase price, believed to be about $2.5 million, in the 100th running of the Moonee Valley weight for age championship and he is a leading contender in Tuesday’s Melbourne Cup (Gr 1, 3200m) after being purchased privately in August.
The first four across the line in the Cox Plate were all bred in Ireland, while only three of the 14 runners were bred in Australia, Arcadia Queen (Pierro) the best-performed in fifth.
Ozzie Kheir’s syndicate was behind the high-stakes purchase of Sir Dragonet, while the group also owns imported Cup hopefuls Admire Robson (Deep Impact) and Geelong Cup (Gr 3, 2400m) runner-up Le Don De Vie (Leroidesanimaux), among a host of internationally acquired horses.
Australian Bloodstock has Mustajeer (Medicean) and Geelong Cup fourth Ashrun (Authorized), while Coolmore’s imported pair Tiger Moth (Galileo) and Caulfield Cup (Gr 1, 2400m) runner-up Anthony Van Dyck (Galileo) sit at the top of Melbourne Cup markets, indicating that the nation’s most famous horse race is likely to be won by an internationally bred horse.
Industry observers suggest that up to $100 million each year is being spent on international horses to bring Down Under to race and that figure is steadily increasing with a large contingent of Australians and New Zealanders active at this weeks’ Tattersalls Autumn Horses in Training Sale in the UK.
More than 30 horses are heading to Australia following this week’s Tattersalls sale, with the likes of Chris Waller, Ballymore Stables’ Mike Moroney, Ciaron Maher and David Eustace, Annabel Neasham and Mick Price and Mick Kent Jr all set to prepare the horses purchased at the four-day auction.
Australian Bloodstock’s Jamie Lovett, who along with business partner Luke Murrell, purchased nine lots at Tattersalls and have been long-term importers of horses from Europe and Japan including 2014 Melbourne Cup winner Protectionist (Monsun) and Toorak Handicap (Gr 1, 1600m) and Emirates Stakes (Gr 1, 2000m) winner Tosen Stardom (Deep Impact).
“For us, it’s a case that we’re so fortunate with our prize-money (in Australia), you can justify lifting your sights a little bit at the likes of Tattersalls. You get the horse here and if he copes with the trip, he’s straight into training and within a reasonable time-frame you’re getting a return on what you put in,” Lovett said yesterday.
“Of course, there are no guarantees, but historically we have had a fair bit of luck out of that sale and obviously many private sales as well. For us, it’s a case of our clients have got the appetite for them, so you have got to keep buying them.”
Lovett found it hard to put a definitive figure on how much money was being spent on horses in the northern hemisphere to race in Australia.
“I can only speak from our own experience and we probably spend three times as much as we do at the (Australian) yearling sales, but that is more our business model as opposed to any other reason,” he said.
“It’s like any business, it’s supply and demand and our clients have an appetite for tried horses well over and above yearlings, so for me, we’ve just got to make sure we’ve got stock on the shelf, so to speak.”
International Racehorse Transport’s Chris Burke said the number of horses being sent from Europe to Australia to race had been increasing for at least a decade.
“If you look at the Melbourne Cup as an example, of the 41 horses who are still eligible, all but ten flew into the country. Some of those are from New Zealand but the majority are from Europe,” Burke said.
“The colonial-bred stallions are doing a great job with the speed horses but for the staying horses, they are still looking overseas for a solution.
“It’s the direction the breeding industry has been going, therefore people go looking for staying horses elsewhere.
“It’s a tough ask to breed stayers, because it’s a long wait and patience is required. A lot of owners, particularly new people to the industry, are keen to see their horse out there racing quicker.
“Certainly the volume of tried horses has steadily been increasing over the past ten years that we’ve been bringing horses in – that would be a fair statement”
Incentive needed for Australian-breds
Tony “Tubba” Williams, who spent time in the UK at auction house Goffs before a stint with Aquis Farm, believes Australia’s preoccupation with speed had not always been the case and he argues that there should be a greater financial incentive for owners to race Australian-bred stayers.
“At this point in time in Australia, it is about the colonial stallion with speed. If you turn the clock back to a bygone era, New Zealand were renowned for breeding high-class stayers as was Australia earlier in the 20th century,” Williams said.
“One of the problems we face in Australia, even though we say we want to breed those horses and we say we should be breeding them, trainers and owners predominantly still want the quick result.
“One of the reasons with those horses is that they aren’t actually given the time to mature, to be conditioned and developed. They are pushed too hard, too early and so it’s a catch 22 here. They want it, but they’re not prepared to spend an extra season (waiting).”
Offering a potential solution to Australia’s dearth of locally bred stayers, Williams poses: “If it was me personally, I would structure the whole stake money differently. What I would do is, I would model it more on a French system where there is a premium paid to the owner of the Australian-bred horse.
“So, what I would do is, with a Melbourne Cup it becomes a $5 million Melbourne Cup with a premium paid to the winner if it is an Australian bred or a premium paid to Australian-bred horses who are in the race if they earn stake money. The premium might be 40 per cent for want of an example.”
“Let’s face it, if the Melbourne Cup is worth $5 or $8 million (to the internationals), it doesn’t matter.
“There has got to be a formula there that would work for the Australian-bred horse.”
Experienced Melbourne-based agent Jeff Gordon, who undertook a feasibility study on purchasing international horses to race in Hong Kong and Australia and successfully brought horses Down Under, now believes the proliferation of southern hemisphere buyers targeting Europe had a significant detrimental effect on the local yearling market.
He was an admirer of the protocols put in place in Japan even though restraint of trade legislation would likely make it almost impossible to implement in Australia.
“Japan only allows the broodmares in, the imported mares in foal and you can bring in yearlings and foals, but you can’t bring in raced stock. Therefore, you find that the yearling sales are very strong all the time and the yearlings that are bred there find a place somewhere in Japan, and breeders survive,” Gordon said.
“In Australia, we could be getting it a bit wrong. I calculated roughly last Melbourne Cup through to about February-March, there would have been about the equivalent amount of money change hands for horses who were in quarantine (from overseas).
“The value of the horses who came into the country was about the same as the gross of the Inglis sale in Melbourne this year.
“If they keep bringing the imports out, particularly in these tough economic times this will place even more pressure on Australian breeders.They have already had to put up with x-rays, equine influenza and, more recently, the drought and now they are putting up with an influx of internationals.”
Lovett has experience on both sides of the fence, buying internationals, breeding locally and also as a yearling seller, and is well aware of the extra risk in breeding middle distance and staying horses.
“In fairness, Coolmore brought some lovely sort of horses out here – look at Camelot but he didn’t get the support from breeders,” he said.
“Unfortunately, the market determines what people breed to and if you go to a yearling sale with a nice staying-bred horse you lose money as a rule. It’s crazy.
“I’m just at my farm now and I’ve got a few yearlings by Protectionist, who we stand in Germany, and I’ve brought them over. They are bred to northern hemisphere time, but I’m happy to be patient and grow them out knowing he was such a good racehorse and he’s doing a good job in Europe at the moment with his two-year-olds.
“I’m happy to do it, but commercially, I wouldn’t do well if I was trying to sell them through a yearling market in the southern hemisphere.”
Lovett also believes in the credentials of Tosen Stardom, who stands at Woodside Park Stud in Victoria, as being capable of siring high-class middle distance horses but admits commercially he will have to “do it the hard way”.
“He’s a good example. Tosen Stardom was a serious racehorse being by Deep Impact who is arguably one of the best if not the best stallion in recent times, and he got a very good book of mares and we bred some very good mares to the horse and we’ve been rewarded with some good foals,” he said.
“As to whether they are commercial, time will tell, but they are probably going to be a bit hard because our market wants Golden Slippers. He will have to do it himself, he’s got pedigree, he’s got race performance and he’s now got the good foals.
“A horse like him could ultimately make it, it’s just hard to get the foal crop year after year to keep the support up to him to give him a chance at stud.”
He added: “Luke and I have our own property where we are foaling down and breeding a few, but I am already resigned to the fact that a lot of those lovely horses I’ve bred, by the time I put a sales prep into them and take them to the sales, I am better off breaking them in and racing them and hoping that they are good horses.
“Commercially, it is very hard to breed a foal that is worth $150,000 anywhere and you nearly need to get $100,000 to make it viable by the time you breed them and sale prep them.”
Overall, the Australian yearling sale market has enjoyed a sustained period of growth in recent years, spurred on by record prize-money levels, with the trajectory only halted in April this year by the coronavirus pandemic.
Demand dictates market
Basil Nolan, the president of the country’s peak industry body Thoroughbred Breeders Australia, acknowledges the amount of money owners were spending on overseas horses and he is “mindful” of the issue, but played down the impact imports were having on the depth of the buying bench at the local yearling sales.
“It’s a free market and people obviously think that they are getting a better deal by buying those staying horses (from overseas),” Nolan said yesterday.
“I suppose it’s been New Zealand’s loss because we used to go over there and buy their staying horses, now we’ve gone further afield to buy them out of England and Ireland.”
The demand from yearling buyers for ‘precocity’ meant standing middle-distance-performed stallions in Australia was commercially difficult but Nolan believes that could be slowly starting to change.
“I’ve been quoted a lot about this. You bring a horse out of the box and you say it’s going to be a nice three-year-old and the bloke will be gone and won’t come back,” he said of the ‘need for speed’.
“Obviously there will be a place for the staying-bred horses, but they are very difficult to sell at yearling sales, I can assure you.
“The thing is, the yearling sales have been pretty buoyant up until Covid arrived and there’s still a lot of races for sprinting horses so, at the moment, we’ll have to live with them going over there to buy the stayers while we see if we can breed some of our own.”