Our very own Rajasthan is entered to run on Friday at Pimlico Race Course in Race 13, right after the running of the Black-Eyed Susan Stakes. He will be facing a full field of 14 and will break from post position 5.

We are looking for an improved effort out of Rajasthan who had his first race of the season three weeks ago. That race was a little bit of a disaster for him. The jockey tried to settle him behind the slow pace but Rajasthan wanted to go straight for the lead. The result was a fight all throughout the first turn between jockey and rider that was not pretty to watch and cost us heavily in the end. His effort was not a poor one given what happened and his holding on to get third.

We expect this race to be different. He already is much tighter given that he has a recent race under his belt at this track and distance. His workout was very strong yesterday, posting a bullet for the half mile move and leading rider Luis Garcia picks up the mount since Horacio Karamanos will only ride on stakes on Friday due to some issue he was having.

It is a competitive field and we will probably be second favorite that day, the graded handicap has Rajasthan at 7-2. The favorite will be a lightly raced horse named Ballymoy who had a strong first start in an $80,000 maiden claiming race last out at Gulfstream Park where he finished a close second and was given an 80 Beyer for the effort.

Owner Rick Porter raised more than a few eyebrows when he announced that Eight Bells, a probable favorite for the Kentucky Oaks, may actually run in the Derby. The outrage surrounding the decision had nothing to do with running a filly in the premier horse race in America but rather on the concern that Eight Bells would be entered only to end up running in the Oaks.

Under current rules, only 20 horses can be entered for the Derby. However, nothing prohibits an owner from entering a filly in both the Derby and the Oaks. The problem is that if the filly ends up running in the Oaks, she will have denied another legitimate contender a place in the Derby.

Rick Porter has been unapologetic about his decision stating that in his view there is nothing “illegal or unsportsmanlike” about entering the filly in both races; he notes that “this is a business and not just a sport.” His decision will be controversial only if Eight Bells draws a bad post position for the Derby and scratches.

What will not be controversial is the ability of this filly to compete with the best colts of her generation. Her top Beyer speed figure, a 99, makes her on paper a strong contender. It is also very positive that she has already shown a liking for the dirt and with nine lifetime starts, four of those in the current year, Eight Bells is already a very experienced performer.

One issue against may be that only three fillies have ever managed to win the Derby. Regret in 1915, Genuine Risk in 1980 and Winning Colors in 1988. However, only 38 fillies have ever raced in the Derby, the latest being Excellent Meeting who finished fifth and Three Ring who finished 19th in 1999.

Three out of 38 is not a bad statistic for the Derby. Fillies are winning at a healthy rate of 8%; which means that according to the numbers; theoretically, a filly has a better chance of winning the race than a horse trained by Todd Pletcher who is 0 for 19!

In conclusion, Eight Bells is a strong contender especially considering all the question marks surrounding much of the field and as Rags to Riches proved last year, the girls can beat the boys even at the top of the sport.

On Friday, I had the pleasure of seeing the movie The First Saturday in May. I had been a little reluctant to go because of the mixed reviews it received. However, Alan from Left at the Gate pushed me in favor of going with his review of the movie.

The movie is playing at Cinema Village in New York until Thursday May 1, as well as in select theaters across the country.

The documentary follows six horses, including Barbaro, on the road to the Derby. Throughout this journey, the movie captures beautifully the equine and human stories behind the greatest race in America.

All of the six very different trainers that are profiled talk about what it would mean to them to make it to the Derby. Some of them have waited twenty years or more to make it to the big race. This sets up the drama for the horses’ subsequent races, as each tries to get enough earnings to make the field.

The human stories are all powerful. From Frank Amonte, an assistant trainer with years in the business that finally gets a shot with a top prospect to Michael Matz who went from Olympian medalist to Derby winner. We meet the trainers, their families and the staff who day in and day out take care of these magnificent animals.

In a deeper level the movie captures the power and mystique of the Derby. Its ability shape the dreams and aspirations of everyone associated with the sport and the overwhelming odds that any trainer and owner face of actually getting there.

But perhaps the greatest achievement of the directors was to pick, very early on, five horses that actually made the derby, all of whom had a great chance of winning. From Brother Derek and Lawyer Ron to Belmont hero Jazil, the movie captures most of the horses that turned out to be the favorites for what Barclay Tagg called the most competitive Derby field he had ever seen. And of course, there is Barbaro, the eventual winner by one of the largest margins in history.

The movie would have been fantastic had it ended there but the directors did go on to tackle the issue of Barbaro’s tragic accident in the Preakness – albeit very tastefully. Making the ending seem like patch work, an epilogue put together last minute to accommodate the tragic event.

The movie itself is designed to build up to only one thing – the Derby. So whatever comes after that is not only anticlimactic, it is not supported by anything in the plot. It leaves the viewer feeling lost and a little depressed.

I spoke with one of the Hennegan brothers after the film and asked him about the ending. He confirmed that when they set off to do the project they had only intended to film up to the Derby but when Barbaro won so impressively, they decided to keep shooting in case they had a Triple Crown winner in their hands.

After filming, they were not sure how to end it but they were completely surprised by audiences when they screened the film. He told me “you would be surprised how many people don’t know what happened to Barbaro. Some think he is still alive, others think he got hurt in the Derby itself.”

The Hennegan brothers see this film not just as a simple documentary but also as a time capsule, designed to capture the reality of that particular Derby. They were very fortunate to share in the rise of Barbaro to the highest place in thoroughbred history; so they felt responsible to also speak about his tragedy. Especially, when they found that many people just don’t know what happened. They want people to know and they want people to care. In achieving this, the ending of the movie is successful.

The documentary is a powerful film, about people and horses. The stories are heartwarming, sometimes funny, sometimes sad, but always engaging. We share in the dreams and disappointments of those involved as they keep fighting for their chance, their day in the Derby. We are taken through a great emotional ride, and in the process we get a close look at what makes the Derby one of the bet races in the world.

It is a film that no horse enthusiast should miss! Especially, not on Derby week!

In a very eventful race Rajsthan ended up finishing third in his first race of the season. The veteran maiden Virginia Minstrel won the race as expected. Not expected, however, were Rajasthan’s antics during the first part of the race.

Trainer Tim Woolley asked Horacio Karamanos, our jockey, to hold Rajasthan “just behind the pace” so that he could have “something to run at.” The race on paper looked like it had some speed to it and Rajasthan has been able to relax very well when he has a horse in front of him in the mornings.

Everyone agreed with the plan – everyone but Rajsthan. He broke well and immediately dashed to take the lead. Horacio Karamanos restrained him as instructed and allowed the 8 horse Chancellery to set the pace in front of him in very slow fractions. Rajasthan fought Karamanos all the way through the first turn. He was very rank and tossed his head in every direction trying get to the lead. I am sure that if the jockey had not restrained him he would have run over Chancellery.

All this fighting did no favors for Rajasthan, who could have gotten a clear lead and relaxed much better if allowed to just run freely. The first quarter went in 24.4 which was pathetically slow and must have been excruciating for the horse who was ready to go; and obviously had no patience.

We clearly made a mistake by asking him to hold back in such a paceless race he came home flat on the wrong lead but still kept up pace with the winner in third. He apparently has cooled out well and we hope we will be able to race him back in three weeks or so.

The Kentucky Derby is only a few weeks away and press coverage of each contender is already at full blast. During the next few weeks we will hear about every aspect of the training, health, eating habits, right down to the choice of shoes of each of the potential participants.

It is easy to get carried away by all the commentary and the hype and lose sight of the elements that are most important in sorting out the contenders from the pretenders.

Today, I want to discuss one of the factors that will receive much of the attention from both turf writers and fans -Pedigree.

How important is an individual horse’s pedigree in evaluating potential Derby success?

Ever since Leon Rasmussen wrote in the early 80s that “no Kentucky Derby winner since 1929 had a Dosage Index higher than 4.00” handicappers and journalist have analyzed the pedigrees of Derby contenders almost obsessively.

The Dosage Index classifies horse pedigrees by type and assigns a number that reflects the ability that a horse has to compete at a specific distance - the lower the number, the greater the aptitude to compete at classic distances.

The idea that a number derived from pedigree alone could single handedly eliminate almost half the field from contention in the Derby was simple and alluring. And it worked!

It worked, that is, until in 1991 when a horse by the name of Strike the Gold won the Derby despite the fact that his Dosage Index was 9.00. His win was followed by wins by Real Quiet, Charismatic and Giacomo all of whom had Dosages in the higher than 4.00. These results put an end to Dosage as a theory for predicting Derby winners.

However, the idea that pedigree can be used to somehow gain an edge in selecting Derby winners did not die with Dosage. The race is now on to find the next magic number, explanation, or gimmick that will give a handicapper an edge in predicting Derby success.
Pedigree, as a general matter, can only give us the probability that a particular horse will have certain characteristics. The law of genetics is random in selecting traits that will be handed down to through the generations.

Therefore, we often see horses that display very different characteristics from the ones we expect to see by looking at their pedigree. For instance, a sprinter type who is able to succeed in the classics (Smarty Jones) or a turf horse that really likes dirt racing (Cigar).
For me, although a hard-core Pedigree enthusiast, Pedigree is not very important in handicapping this race. I believe that the usefulness of Pedigree is inversely proportional to the amount of additional information available on a given horse.

Pedigree is most important when planning a mating because there is no information available on the prospective foal (except of course the physical characteristics of the parents which should be taken into account).

At the yearling sales, pedigree is still crucial but it loses some of its importance because we have plenty of information on the build, conformation and temperament of the foal in question.

Finally, by the time a horse is ready to run, pedigree may still shed some light on certain factors like the ability of a foal to mature early or her preference for a specific surface but as soon as the gates open the usefulness of pedigree as a predictor of success is diminished even further.

The only relevant use of bloodlines in this Derby may be to try to determine which of the horses that have been successful in Polytrack may actually take to the dirt surface of Churchill downs – a surface they have never tried. But even here other factors such as workouts prior to the race may be much more telling.

We have too much information on Derby entrants to focus on bloodlines. Looking at genetics to predict Derby success is like using a meat cleaver to perform a fine surgery, it’s blunt and unnecessary.

Our very own Rajasthan is entered in the fifth race on Saturday at Pimlico for his first race this season.

He had the winter off and has really matured since last year. His workouts have been great and it seems like he will be ready for a big effort on Saturday. We entered him both at Laurel and Aqueduct but were not able to get into those races.

Rajasthan has only run four times. His first couple are throw outs because the horse was very distracted and rank during those first races. After this Rajasthan was gelded and blinkers were added he gave us two very good second place finishes at The Meadowlands and at Aqueduct.

The effort at Aqueduct was especially impressive since the going was very soft and he was able to open up 4 lengths on the field in mid stretch after setting the pace and was only caught at the very end by a deep closer who benefited from the fast fractions. Rajasthan still finished well ahead of the third place finisher and no other front runner finished close.

I also question the Beyer speed figure that was awarded to us (78). According to my calculations when compared to the other turf races in that card he should have received an 84. Equibase seems to agree with my numbers by giving him a speed figure of 95, which is equivalent to the 84 Beyer I would have expected from DRF.

However, the winner of the race, Star for Tina is a horse that never ran anything close to that and has not run anything like that since. So I think the people at DRF reduced the figures in our race to make up for this anomaly, which I attribute to Star of Tina loving the deep going and the fast pace we set for him.

Examining the Saturday race, Virginia Minstrel seems to be his main threat. This horse has run 12 times without, inexplicably, breaking his maiden. He ran Beyers in the 89 range while finishing second and third to some of the best horses at Saratoga and Belmont. Granted he didn’t win because he met the likes of War Monger, Warn and Stalingrad (who just won an allowance easily at Aqueduct in his debut this year).

Virginia Minstrel struggled through the winter to find his best form on dirt putting up Beyers in the mid 60s and finishing second and third in those races against mediocre competition in Laurel and Philadelphia. However, he came back to the turf to run a good race at Laurel on April 11 with a 79 Beyer and now they send him right back on two weeks rest. Hopefully, the 13th won’t be a charm for this one.

The only other horse I can see with a shot is Task Force, he is making his second start after a debut in the main track at Monmouth where he finished a strong second last year. However, this horse only shows one workout at Laurel and although he is no longer trained by top trainer Bill Mott, James Murphy may have him ready to run. That makes him the big question mark of the field.

Let me know if any of you have any comments on the race.

On a personal note, many of you have noticed that I have not posted in a while. This has been due to the fact that I have been teaching this semester at Fordham Law School, in addition to my regular workload. So now that the semester is over I will start posting again so please visit the site or the TBA homepage for updates.

Today we will discuss stallions standing between $20,000 and $49,999 and we will try to identify which stallions offer the best value and which offer the worst value for breeders.

The group is joined by former star Fusaichi Pegasus, a once thriving Coolmore Sire that los 40% of his value and is standing for $45,000. The group has been pretty steady in terms of their fees and offers some very good value in the form of older proven sires and some well placed younger sires.

Best Values

Exchange Rate ($25,000) A fee increase of 150% should not deter anyone from breeding to this stallion, he is a young proven sire with strong numbers and offers a unique opportunity for breeders at this price range. His AEI of 2.26 is extremely strong. He also produces 8.6% stake winners from foals which is huge for modern standards. His yearling median lags a little but his sales numbers should improve dramatically given the performance of his horses at the track.

Cozzene ($35,000) Has been standing now for a couple of seasons for this low fee. He has an Average Earning Index of 2.39 and produces 8.9% stakes winners from foals both figures are easily the highest for any stallion at this price level, these numbers are even attractive at the $50,000-$99,000 bracket. His yearling median is only $60,000 which still make him a commercially viable prospect but his real value will be for those who breed to race. Hard to find a better value in any price range.

Theatrical ($40,000) Another sire with big numbers that seems to be punished because of his age. He has a 2.43 AEI and 7.9% stakes winners from foals. His median yearling median of $70,000 makes him a contender for the commercial breeder but as with Cozzene it is the breeders who breed to race that will find this offer most attractive.

After Market ($30,000) Very well priced sire offers those who want to take a chance on a first year sire very good value. He is an incredible physical specimen who was effective at middle distances on the grass at every level. He is impeccably bred being out of G1 winner Tranquility Lake by Rahy so he has the same cross as Giant’s Causeway. He retired with 8 wins from 13 starts and his yearling should be well sought after at the sales since he will appeal to both domestic and foreign buyers. In addition, if he passes on just a fraction of his looks, his yearlings have the potential of selling well into the six figures.

Worst Values

Aptitude ($20,000) Has not been performing well and this fee just seems too high for a sire with his numbers. He only has a 1.34 AEI and produces a pathetically low 1.8% stakes winners from foals. From a commercial standpoint his $25,500 yearling median does not warrant anything close to his fee.

Sky Messa ($30,000) Danger signs of a major flop are flashing. Sky Messa had a disastrous year with his two-year old runners and although I like to give stallions a couple of crops before judging, his numbers are just too bleak to warrant any breeder taking the plunge at this fee level. AEI of only 0.57, a pitiful 9% winners from foals and no stake winners to speak of make him a really bad gamble at this stage. If you like him, wait a year or two to get a better view of his ability and his fee is almost certain to fall.

Today we will discuss stallions standing between $50,000 and $99,999 and we will try to identify which stallions offer the best value and which offer the worst value for breeders.

This year, overall stud fees are down 12% for the group when compared to 2006. The average decline in yearling average was only 5% compared to last year. This is good news for breeders at this price range.

The group is joined by former six figure all stars Gone West, El Prado and Elusive Quality. The group has been pretty steady in terms of their fees as most horses return for the same fee as last year. They did lose one member in Fusaichi Pegasus whose fee was dropped by a huge 40% to $45,000.

Best Values

El Prado ($75,000) With a 40% fee reduction, El Prado may finally offer value and quality to breeders. He has an Average Earning Index of 2.14, the second highest of the group after Rahy, and has 8.4% stakes winners from foals. His yearling median of $190,000 also makes him very attractive at this price range.

Gone West ($85,000) has also been reduced from $125,000, he is a proven sire of sires and offers a unique opportunity to breeders at this price range. He still has a strong demand at the sale for his yearlings with a median of $210,000. He produces 8.6% stake winners from foals.

Elusive Quality ($75,000) Another sire with a big fee reduction (25%) that screams value for breeders. He has a 2.11 AEI and 6% stakes winners from foals. His median yearling median of $205,000 makes him a strong contender for the commercial breeder.

Worst Values

Johannesburg ($65,000) does produce some useful horses but his numbers are not that good. His AEI of 1.36 is pathetically low for a stallion in this range (it’s lower than for many stallions in the $5,000 range) and his 4.3% stakes winners from foals Is only marginally acceptable. He still has plenty of room for improvement as he has sired some good horses but I would not be surprised to see him in the $30,000 range soon. Especially given the way that Coolmore discounts its stallions. His yearling median of only $95,000 make him hard to swallow on the commercial front.

It is that time of the year when we evaluate the best and worst values in the stallion market. Today we will discuss stallions standing above $100,000 and we will try to identify which of them offer the best and the worst value for breeders.

This year was a tough year for this group; overall stud fees are down 2% for the group when compared to 2006; mostly due to the drastic reduction of Storm Cat’s fee. At the sales this group of sires also saw their yearling average decline for the third straight year; they suffered a 15% drop compared to 2006. This is not good news for breeders trying to breed to the top echelon of horses since stud fees are declining at a slower rate than average prices thus reducing the profitability for breeders.

However, Storm Cat was not the only sire who saw his stud fee reduced. Unbridled’s Song’s fee was reduced by $50,000, Forestry by $25,000 and Giant’s Causeway and Kingmambo previously standing for a private amount are also standing for less than their last advertised fee.

In addition, other stallions that were once members of this selective group have fallen out of this very exclusive club. They include El Prado, Elusive Quality and Gone West. On the other end of the spectrum two more stallions have joined the six figure sires, they are Smart Strike and Street Cry.

Best Values

A.P. Indy ($300,000) A.P. Indy has been an ultra consistent sire; his yearling median of $675,000 make him the most attractive sire in this price range from a commercial standpoint. He has a 3.22 Average Earning Index and produces a great 12.9% stakes winners from foals. Most important of all he is quickly cementing his reputation as an important sire of sires, a most for a stallion in this price range.

Storm Cat ($300,000) Yes his yearling median was off this year for the first time in a while; his median was ‘only’ $350,000. Yet the 40% reduction in stud fee make him very attractive. He has a 3.41 AEI and produces 13.3% stakes winners from foals. He is also the best sire of sires of any active sire.

Worst Values

Mr. Greeley ($125,000) We thought he was a bad value last year when he stood at $75,000. Unbelievably his fee is increased by 67% for this year. His yearling median does not make him attractive at $150,000 although he is very capable of hitting homeruns in the sales ring. At the track, he has been able to sire top runners especially in Europe where he boasts an outstanding filly in Finsceal Beo. Be that as it may, his AEI of 1.53 is what I would expect to see in the $15,000-$25,000 stud fee range and his 5.1% stakes winners from foals is the lowest percentage for any stallion standing for more than six figures. In conclusion he is one of the worst values in any category!

As some of the sires that have traditionally occupied the top of the thoroughbred breed are getting older; a new group of sires has emerged to replace them. They are the new cream of the crop and will be stepping into the shoes of some of the current greats- Storm Cat, A.P. Indy, Kingmambo, Seeking the Gold, Gone West etc. These older stallions have upheld a tradition of excellence for Kentucky Sires that once included the likes of Northern Dancer, Mr. Prospector, Danzig, Nijinsky II, Nureyev, Bold Ruler, Princequillo, Buckpasser, Nasrullah, Blenheim II among many others.

The best new top sires that are most likely to lead Kentucky in the near future are the following (the year when they retired to stud in parenthesis):

DISTORTED HUMOR (1999) $300K
UNBRIDLED’S SONG (1997) $150K
AWESOME AGAIN (1999) $150K
SMART STRIKE (1997) $150K
GIANT’S CAUSEWAY (2001) $125K
MR. GREELEY (1996) $125K
FORESTRY (2000) $100K

But the question remains, are these sires up to the task? Are they worth their high stud fees? Can we realistically expect great things from a group that includes one sire with an Average Earning Index of only 1.53, another one that drags his mares down by more than 26% and yet another that can barely produce 5% stake winners from foals?

How did it come to be that our best sires are so, well… mediocre? Is it a sign of the times? Is the effect of the large books of mares bred to them? Or could it be that Kentucky’s position of a top class provider of thoroughbreds is coming to an end? In order to answer these questions we will briefly analyze the history of the Kentucky thoroughbred and some of the factors that may be contributing to this decline.

HISTORY

The rise of Kentucky as a commercial powerhouse was launched in the 80’s; when John Magnier and Robert Sangster decided to buy the very best yearlings in the hopes of making future stallions. At that time, private breeders had given way to commercial producers and top stock was available to the highest bidder.

Their business plan worked very well. Surrounded by the best advisors they selected the cream of each crop - yearlings by the best sires and the most distinguished female families. They knew that they needed to produce only a few top runners to make up for all their expenditures. And produce top runners they did. Under the care of the great Vincent O’Brian, Coolmore flourished producing such horses as The Minstrel, Danehill, El Gran Senor, Saddler’s Wells, Giant’s Causeway, Royal Academy among many others.

Even when the rulers of Dubai arrived at the scene, pushing the prices of top stock to unprecedented highs; the Coolmore business model worked. Year after year they were able to offset their expenses with the success of their race horses and sires.

Since that time, the Coolmore formula has been copied by many top buyers that enter the game. They threw away millions during the 90’s to obtain top racehorses, trying to win classic races and come up with the next top stallion. But in the world of today the same business model that propelled Coolmore to unprecedented success will undoubtedly fail.

The advantage that Coolmore had in the 80’s was that it purchased its stock only from a very select group of sires. These top stallions were able to produce stake winners at a 20% clip. In addition, by selecting the very best foals from the sire’s progeny they were able to tilt those numbers even more to their advantage. This level of success would be impossible with today’s top sires that can only turn out 6% stakes winners from foals.

Another advantage that Coolmore had in the 80’s was that there was a strong market for their second tier runners, those that were useful stakes performers but ranked just below classic quality. Today’s mega books make these second tier runners almost useless since breeders today have access to the top performers of each crop.

The difficulty and expense now associated to buying yearlings with the aim of turning them into stallions may be part of the explanation of why Darley has recently switched its strategy and stopped trying to create future sires from the bottom up. They have focused instead in buying the best runners from the racetrack. Their recent shopping spree includes Street Sense, Hard Spun, Authorized and Manduro. Although they spent a huge amount to secure these horses under the new market realities that expense was much less than trying to purchase yearlings in the hopes of coming up with these types of horses.

THE EFFECT OF THE MEGA BOOKS ON THE STALLION POPULATION

The turn of the century brought with it the age of the mega-books for stallions. Led by Coolmore itself, which wanted to increase its profit margins to finance their ever more expensive yearling purchases; they accepted an increasing number of mares to be bred to their stallions.

The move instantly revolutionized the industry. In a span of a few years stallions that were covering 40 mares a year were covering well over 200. It did not take long for other farms to follow suit and obtain larger profits from their stallions.

This trend was further enhanced by dual hemisphere breeding, where Stallions are shuttled to Austrailia, South America or South Africa where they continue to breed large books year round.

In practice, the effects of this trend of increasing the number of mares bred to a stallion has a huge impact on stallion values. On the one hand, it dramatically increased the value of good sires and top prospects. On the other, because the mare population has been relatively constant and more mares are now bred to popular sires; other sires are seeing their books dramatically reduced or have been relegated to regional markets. Every year the Jockey Club report of mares bred reports fewer and fewer sires in use. In addition, Southern Hemisphere markets where the second tier stallions often ended up are now getting the services of the prime sires exclusively.

Therefore, horses that are not among the best runners of their crop will no longer get a chance at stud. As Seth Hancock of Claiborne reminds us, in the current market place, Danzig would have never gotten a shot at stud. Can anyone imagine a breed without Danzig? Certainly not the Australians or the Europeans. How many great sires will we lose because no one will gave them a chance?

Another effect of the increase in book size still has not become evident. Economists tell us that when there is an increase in supply, there should be a decrease in price. So, shouldn’t it be that with an increase in number of seasons there should be a correlated decrease in stud fees? However, this has not happened, top sires that cover large books still command high six figure stud fees.

Four interrelated forces have contributed to fuel a rise in stud fees: a) the strength of the yearling market, b) the weakness of the dollar, c) the increase of participation of international buyers in the Kentucky market place and d) the psychological conditioning of buyers that have not re-evaluated their valuations given market realities.

There are signs that the effects of these forces are reaching their saturation point and that stud fees should be reduced in the near future.

First of all, even with the market at historical highs, breeders are experiencing a reduction in profitability across the board. A large part of the revenue obtained by breeders is being needed to pay for stud fees. Commercial breeders must pay less for stud fees and increase their profitability or be forced out of the market.

Secondly, we are experiencing a period of unprecedented volatility in the market. For next year alone, we have seen stud fees move wildly even for the proven sires. Giant’s Causeway was priced between $200k and $300k last year and now will stand for $125k, Storm Cat was reduced by $200k, Unbridled Song was reduced by 50k, Smart Strike increased by $75k, Mr. Greeley increase by 50k, Elusive Quality down 25k, Forestry down 25k, Distorted Humor up 75k. These are not small changes; farms are scrambling to find the right price for their sires as the realities of the new market settle in. They are banking on fashionable trends to extract the most value from recent performance and adjusting fees downward, sometimes heavily after a disappointment in the top of the yearling market. With the exception of Smart Strike who was heavily undervalued and had a breakout year there is no reason for the fees of proven sires to vary so widely. Is Unbridled Song really worth $50,000 less than last year? Did Mr. Greeley really improve to the tune of 33%? We don’t think so.

Third, economic forces have reached their peaks. The top of the yearling market showed an important slowdown this year. There were fewer yearlings sold for more than $1 Million and the median for the elite sires seems to be stuck in the $200-$300,000 range. Even the mighty Storm Cat saw his average decrease and his fee reduced by 40%.

Finally, buyers are being more realistic in the valuations for top stock. It seems that they understand that it makes little economic sense to spend more than $200-$300,000 for any horse regardless of quality. The reason for this is, of course, that modern top sires produce a much lower percentage of stakes winners than the sires of the past.

However, buyers are still overpaying for certain stock regardless of the overall numbers of that sire: a)for progeny of stallions that have proven to be able to sire a top stallion, the so called ‘sire of sires’, b) for horses that have recently produced one or more very good runners, or ‘fashionable sires’ c) first year sires.

A DECLINE IN QUALITY

There are a few theories that try to explain why the new top sires have low statistics when compared to the top sires of the past.

For all sires an increase in the book of mares also means that they will be servicing, on average, a lower quality of mare than they would if they were only serving a small select book. This must have an impact on the performance of their overall stock.

A second theory states that the quality of the sperm of the sire suffers when bred to a very large group of mares. We have found no evidence to support this theory and find it to be rather indefensible, at least scientifically speaking. The DNA of a horse does not change with the number of matings and microscopic tests show that sperm vitality does not seem to change dramatically with the current number of mounts.

Another interesting theory states that because the top sires have more products on the racetrack competing against each other it becomes more difficult for any one of them to dominate top races. Whereas in the past, there would be only a few elite horses by elite sires running against mostly mediocre competition, they used to win often, now they encounter situations in which every horse in the filed is by another good sire. Under this theory, because large books are a relatively new phenomenon, the statistics of top sires will continue to decrease and the pressure on stud fees will intensify.

Finally, some state that there is a fundamental change in the breed that has closed the gap between the very good runners and the average horse. Under this view, there would also be a reduction in the gap between top sires and average ones. Again if this is the case, the gap in fees between top sires and average sires should tighten as well.

IS KENTUCKY LOSING ITS EDGE?

The other obvious reason why the top sires are not performing as well as in the past could be because sires in Kentucky are not longer the elite in the world market and the new generation of sires are just not as good as those in other parts of the world.

In order to put the theory to the test we looked at some of the young top European sires and compared their percentage of stakes winners with those of their American peers. Our preliminary view is that the phenomenon of reduced performance by the new top sires is a global phenomenon and, at least in Europe we are also seeing much lower statistics for the next generation of top sires. For instance Danehill Dancer who stands for €125k has 5% stakes winners to foals; Montjeu also €125k has 6.9%; compare that to top older stallion Saddler’s Wells who has an astonishing 14.7% stake winners to foals! What a difference!!!

THE NEW TOP SIRES UNCOVERED

So who are the sires in Kentucky that will replace the great old guard? The following sires standing currently for more than $100,000 are the next wave of top stallions:

1. DISTORTED HUMOR (1999) $300,000: With an Average Earning Index of 2.56 and 10% Stakes Winners from foals, Distorted Humor is truly a fantastic sire. More incredibly many of these numbers were achieved with mares that were covered at a $10,000 stud fee. But is he worth the large stud fee? Compare him with Storm Cat, standing for the same fee, who is already a proven sire of sires, has an AEI of 3.40 and produces 14% stakes winners from foals. The $300,000 fee seems too ambitions for Distorted Humor, especially when his yearling median is also $300,000.

2. UNBRIDLED’S SONG (1997) $150,000: he stood for $200,000 last year and is now being reduced 25% despite selling a couple of very nice foals for more than seven figures. His AEI is a very low 1.98 and he drags his mare down quite a bit (CI 2.69). He does produce a very good percentage of stake winners (for modern standards) at 7%. However, his yearling median is only $220,000.

3. AWSOME AGAIN (1999) $150,000: We wrote about Awesome Again in a previous post and named him one of the most undervalued sires of 2006, when his yearling median was a paltry $46,000, less than 1/3 of his stud fee. An solid AEI of 2.67 but only produces 5% stakes winners from foals. It is difficult to justify paying so much for this horse.

4. SMART STRIKE (1997) $150,000: We also have written much about Smart Strike as a heavily undervalued sire and back in December of last year in an Article entitled ‘Best and Worst Stud Fee Values for 2007′, we predicted that his stud fee would “soon be in the over $100,000 range.” Well here we are, a year later at $150,000, doubling his 2007 fee! He has an AEI of 2.91 obtained with much cheaper mares as he has been undervalued for a long time and he has a very solid 9% stake winners from foals. However, his yearlings have been usually punished at the sales and he has never enjoyed a good level of commercial success with the physical types that he throws.

5. GIANT’S CAUSEWAY (2001) $125,000: He is another sire whose fees have varied widely. Last year he stood for a Private Fee and you could not get to him late in the season even if you were willing to pay $300,000 for him. Now a considerable reduction that makes you wonder about the lack of value for those who have bred to him in the past. He breeds a large group of mares in is usually overrepresented at the sales. He has an AEI of 2.04 but produces only 5% stakes winners from foals. He has shown that he can get the big horse and some of his best runners are also hitting the breeding shed led by Shamardal, First Samurai and Aragorn which can boast his reputation in a big way.

6. MR. GREELEY(1996) $125,000: The last time that Mr. Greeley gave value to breeder’s he was standing for $35,000. Since producing El Corredor and showing that he can get the big horse in Europe his sale numbers have skyrocketed. However, his AEI is only 1.53 which is a number that you would expect in a sire standing for less than $15,000 and the fact that he produces only 5% stakes winners is a red light that this horse is standing for much more than he is worth.

7. FORESTRY (2000) $100,000: is also standing at a reduced fee this year, down from $125,000. He has an AEI of only 1.86 and a more solid 7% stake winners are good numbers but still may be a high price to pay for this horse.