I'm Glad You Asked

[TGJB]

Indulto, I fought my way through your post, since there actually was some meat on those bones, and was pleasantly surprised to find you had improved your writing from incomprehensible to simply tedious. Your first paragraph showed complete lack of understanding of the subject, your second was a complete waste of space. But the final three-- now you\'re getting somewhere.

On this site you will find, as far as I know, the only disclosure by any consultant, bloodstock agent, trainer etc. of all the horses bought on their advice over an extended period of time, in this case 5 years, from 95-99 (some of the horses ran after that date, and their later results were counted up to the point we did the study). It was a tremendous pain in the butt to do, which is why we haven\'t updated it-- the results since haven\'t been at that unbelievable level, but even if we put the whole thing together the overall results have been remarkable, much better than anyone else has ever done that we know of for a large sampling. This in a game where annual purses total about half of expenses, and that doesn\'t even take into account the cost of the horses.

So yes, it has been a very good idea to hire us. Even if in some cases the result was not a profit (some of the Graph ventures, for example), overall our clients have done far better than owners do as a group. We are worth the money, and then some.

Which brings us to Len\'s post. Len, I\'m glad you seem to finally be willing to discuss the question of what you charge horsemen. So let\'s do it. In general I charge clients 5% of purchase price and 5% of revenue, and for help in managing horses where we haven\'t been involved in the buy, 3% of revenue. (The Graph deals were structured differently, with nothing on the front end and a bigger share of revenue in exchange-- the idea being to conserve capital). On the basis of 3%, I would be charging Frankel\'s owners about half a million for last year, and that\'s just on purses, not syndications etc. Obviously, I would have given him a discount for bulk-- let\'s say it would have been $250,000 all in.

So, what did you charge him last year? You are obviously an integral part of his success and that of the other top guys you mention, so they must be willing to pay you a lot, right? How much are you charging?

I\'m also glad you seem to be willing to discuss the results of that racing venture you mention. How about doing what we did? How about listing all the horses where you were the ones advising on the purchase, and receiving commissions, for a 5 year period of your choosing?

By the way, finances aside, there is an aesthetic side to this business, as you said. We\'ve been responsible for advising the purchase of and received commissions for 67 horses that have gone on to win stakes for our clients, and expect to add to that total over the next 6 months, and we\'ve been in business about half the time as you guys. How many stake winners do you guys have?

[TGJB]

Ruffian Fan- hmmm. You say it\'s no big deal to do (or update) a study about all the horses bought on one\'s recommendation. So you\'ll join me in my request for LF to do it, right? In the interest of comparing apples to apples, I mean.

>On the basis of 3%, I would be charging Frankel\'s owners about half a million for last year, and that\'s just on purses, not syndications etc. Obviously, I would have given him a discount for bulk-- let\'s say it would have been $250,000 all in.<

I don\'t know how many deals structured like this you guys have and how large they have been, but I think the theoretical value of such deals is not the way to evaluate one business model vs. another. You have to evaluate the \"actual\" deals both camps \"have\" been able to sign and the \"profits\" they have produced.

In other words, there may be a specific niche of trainers/owners that your model attracts. Another model may attract another category of trainers/owners. One model may produce significantly greater revenues, but come with greater costs and capital invested.

I haven\'t seen the numbers from either side, but the bottom line is actual profits and capital invested - which I doubt I will get to see. :-)



Post Edited (01-06-05 16:42)

[TGJB]

CH-- You are absolutely right. And based on their record, the approach the Ragozin operation takes is the right approach for them, which is my point. If they did it the way I do they would have virtually no clients, while the way they do it they get to claim lots of big names. But the list of big names is not because of their (Ragozin\'s) success-- it\'s because of the lack of it.

 There are just so many horses worth buying out there-- not enough to work with all those big outfits. You could help them all manage their horses, but there would be a ton of conflicts, and you would never get those guys to pay serious money for what Ragozin brings to the table-- there is no way they would even consider it. They have created a market with horsemen for bulk data and \"advice\" at wholesale prices.

[Chuckles_the_Clown2]

TGJB,

I know there aren\'t many one or two race on the books, good figure horses, from sires that improve significantly with age that come cheap. But, theres a fair amount of horses within that category. Some \"well bred\", some not. Folks have made some fun of \"My Snookies Boy\" here and he may be all done, but he was certainly one that ran that came from the lesser echelons.

[TGJB]

Indulto-- I tried to wade through that mess of innuendo to identify the questions, honest I did. I did the best I could, and I\'ll keep it brief:

1-- I\'ve been charging what I do for over a decade, and lots of people know it. As for whether clients are paying those rates, even you should be smart enough to figure out that SOMEONE has been buying those 67 horses I mentioned that won stakes, and the others that did not.

2-- I TOLD you how owners do as a group-- annual purses in this country add up to about half of annual expenses, and that doesn\'t count the cost of the horses. In other words, if they got the horses for free, they would still lose their shirts. Get it?

3-- To the degree that the literary nightmare of your fourth paragraph can be unravelled and the innuendos answered without me doing a huge amount of work, the answers can be found in the study we published. For \"owners as a group\", see 2, above. For a similar study of Friedman and Ragozin\'s results, see...hmmm.

4-- Small point-- VG went on to win the Eclipse as best older horse the following year (one of very few horses of recent times to win a Triple Crown race and win an Eclipse later, by the way). And if I had won the argument about riding Solis in the Derby and Travers, he would have been 3yo champ, as well.

[Chuckles_the_Clown2]

Solis is pitiful,

You need to have him on clearly the best horse and he\'ll find a way to mess it up. He cost Captain Bodgit a Derby too. I don\'t why they ride that stiff.