Archives for April 2013


High Brow Cat, a fabled 24-year-old American Quarter Horse stallion, was recently sold for $10 million to Colt Industries, a diversified Dallas-based investment firm, even though he has been sterile since 2010.

High Brow Cat was the National Cutting Association sire of the year 2003-12, and his offspring have earned about $58 million. Waggoner Ranch, High Brow Cat’s former owner, also collaborated with Texas A & M University to clone him, and the genetic copy is due to foal this spring.

The Wall Street Journal reported that Colt Ventures’ risky acquisition was motivated by two considerations. High Brow Cat was transferred to his new owner along with the stallion’s valuable semen bank, and this repository should be increasingly in demand because the popularity of the cutting-horse sport is booming among Wall Street moguls.

The international Thoroughbred community has steadfastly refused to register racing stock from any method of procreation except live cover. While there are credible reasons for this policy, the High Brow Cat transaction presents an intriguing financial rationale for the other side of the argument.

Artificial insemination can yield some degree of residual or salvage value for stallions, especially for exceptional stallions whose natural breeding days are over or for promising stallions that die young.

If artificial insemination were sanctioned in the Thoroughbred breed, the pensioned Storm Cat, for instance, could easily have been substituted for High Brow Cat in the narrative. Storm Cat’s selling price would almost certainly be higher than $10 million, provided the buyer received an extensive semen bank that would be analogous to an annuity.

Artificial insemination’s potential economic benefit of residual value is not in and of itself a reason to modify the Thoroughbred industry’s long-standing regulation banning the practice. However, the striking magnitude of the High Brow Cat sale needs to be dispassionately weighed against the logic for the live-cover-only rule.

The Thoroughbred industry could take a step into the 21st century by making two modest changes in the rules about registering foals: A mare can be bred by artificial insemination if the stallion and mare are on the same grounds and the stored semen of a sterile stallion can be used as long as he is still living.

Copyright © 2013 The Blood-Horse. Used with permission.


The Boston Marathon terrorist bombings on Patriots Day are a painful reminder of just how vulnerable we are as a society to the schemes of wicked madmen who want to kill and maim unsuspecting and innocent people. Protecting runners and spectators over a 26.2 mile course along the streets of a major city is difficult at best, primarily because there are no entrances where screening can take place.

What happened in Boston vividly demonstrated that attending any public event, with a sizeable crowd, comes with the risks of injury and death.

The next extravaganzas in the United States are the Kentucky Oaks on May 3 and the Kentucky Derby on May 4. In addition to the actual races, the preceding Kentucky Derby Festival encompasses numerous well-attended affairs, including the Kentucky Derby Parade, which stretches out over a couple of miles.

I regularly attend NFL games that draw about 75,000 people. Everyone entering the stadium is subjected to an inspection of their items, such as coats, backpacks and purses, and people’s bodies are given a cursory pat down. Metal detectors are also employed.

A similar procedure will no doubt be used in Louisville for the Oaks and Derby and normal security measures will be ratcheted up. Yet the task will be more arduous than at an NFL game.

In the first place, the crowds at Churchill Downs will be much larger. Last year, the Oaks on Friday drew 113,000 spectators and the Derby on Saturday attracted 165,000. Second, Churchill Downs covers more acreage than typical football stadiums and thus keeping out nefarious intruders is challenging. Third, items brought in by the large and boisterous infield contingent at Churchill Downs on Derby Day, such as coolers and backpacks, will have to be individually examined or banned. Finally, to do a thorough job, racetrack security must, without exception, routinely screen numerous licensed backside workers, Churchill Downs employees, and vehicles entering the premises.

A national poll conducted the day after the Boston Marathon bombing found that the predominant emotion felt by Americans over the incident was not fear, but rather, anger. Far from being intimidated by terrorism, the vast majority of Americans seem determined to go about their business, regardless of the menace posed by conniving and deranged murderers.

Come Kentucky Derby weekend, experienced and dedicated law enforcement personnel from Louisville, the state police, and the federal government, along with units of the battle-tested Army National Guard, will be forewarned and ready. Couple that preparation with the resolve of Americans to carry on in spite of potential harm… and the show will proceed as planned, for the 139th time, with enthusiastic throngs taking in one of the grandest spectacles in sports.

Copyright © 2013 Horse Racing Business


Item 1. Strong response by sports fans to the recently completed NCAA men’s basketball tournament and the Masters Golf Tournament bode well for interest in the 2013 Kentucky Derby and the Triple Crown.

The NCAA men’s basketball tournament had the highest television ratings since 1994. Ratings for the Saturday semi-final game between Michigan and Syracuse were up 6% over last year’s matchup between Kansas and Ohio State. Ratings for the Louisville and Wichita State semi-final game increased 4% over the 2012 game between Kentucky and Louisville. The audience for the Monday night championship game with Louisville and Michigan averaged 23.4 million viewers (compared to 20.9 million in 2012), with the audience peaking at 27.1 million viewers from 11:00-11:30 PM. The average rating was 7.5.

Scalped tickets for the Masters Golf Tournament were selling for $2,000 per day and $10,000 for all four days. On the final day, Sunday, overnight television ratings for the event in 56 urban areas averaged 10.2; in the 7:00-7:30 PM time slot, the Masters garnered a huge 13.4 rating. Television ratings were up by 26% from the previous year, no doubt somewhat propelled by the Saturday controversy arising when Tiger Woods was penalized rather than disqualified for taking an illegal ball drop and the Sunday playoff between Adam Scott and Angel Cabrera. However, ESPN set a record high for ratings on its Friday telecast of the Masters before the Woods incident took place.

By comparison, in 2012, the Kentucky Derby averaged a 7.2 rating for its two-hour telecast. The actual race portion of the telecast scored a rating of 9 with 14.8 million viewers. Thus the Kentucky Derby telecast fares relatively well, especially considering that the actual “run for the roses” lasts about 2 minutes.

Item 2. In the wake of Animal Kingdom’s win in the Dubai World Cup, Team Valor president Barry Irwin revealed that Graham Motion would no longer be training Team Valor horses, except for Animal Kingdom. Mr. Irwin is certainly an astute judge of horse talent and a highly successful managing partner, who evidently wants a private trainer for his stable. However, the timing of this move is like hearing that the University of Louisville let Rick Pitino go as its men’s basketball coach.

Item 3. According to the California Horse Racing Board, the number of non-musculoskeletal sudden deaths of horses in racing and training at California racetracks was 19 during the 2011-12 fiscal year (July 1, 2011-June 30, 2012) and 17 so far in 2012-13. Seven of these deaths occurred in the barn of Hall of Fame trainer Bob Baffert. The odds that seven of the 36 deaths could originate in the same barn by random chance are so astronomical that it is virtually impossible. Obviously, there is something in the Baffert operation causing the deaths and here’s hoping that the reason can be determined with alacrity.

Item 4. John Sikura of Hill ‘N’ Dale Farm recently complained in a lengthy letter to the editor of the Blood-Horse about an innovation in standing stallions in which the mare owner pays no stud fee unless the offspring brings a pre-specified minimum price at a public sale. (This practice is being pioneered by B. Wayne Hughes’ Spendthrift Farm. Mr. Hughes has a track record in innovation; he became a billionaire by founding Public Storage and creating the self-storage industry.)

Horse Racing Business strongly disagrees with Mr. Sikura. Industry after industry has been disrupted to the benefit of consumers, and the pace is picking up. (Forbes magazine just published “The 12 Most Disruptive Names in Business 2013,” ranging from education to social media to retailing.) Disruption of the status quo is how progress comes about. The market always sorts out which disruptions are useful and which are not, so Spendthrift’s innovation will be put to this acid test over the next several years.

Copyright © 2013 Horse Racing Business