Types of Ownership
One of the great things about racehorse ownership is that there are different types of options available depending on budget and the level of involvement you are looking for.
Individual Ownership
Individual ownership is exactly that. The horse has only one owner who covers all costs, makes all the decisions and gets to enjoy all the rewards. This type of ownership, obviously, involves the highest individual cost, but also means you call the shots.
Partnerships
A partnership is the most common form of ownership. It provides the partners with many advantages, such as the sharing of costs - and the fun. Partnerships are limited to between two and ten people. They can be formed between anyone - family, friends, work mates, sports teams, whoever.
In most cases it requires one enthusiastic senior partner to liaise directly with the trainer. It's that person's role to make sure all the partners are kept up to speed on what's happening with the horse. When there are more than four partners, under the Rules of Racing, one person must be appointed as the Racing Manager.
Syndicates
Syndicates are another common form of multiple-person ownership. The minimum number of owners is five, but there is no maximum number of members of a syndicate. Syndicates and Partnerships have many similarities although syndicates are registered differently, and operate under a different set of rules defined in the Rules of Racing. Syndicates must appoint an official Syndicate Manager who is then authorised to control the syndicate. The Syndicate Manager is responsible for communication between the syndicate members and the trainer, and accounting functions. Their role is pivotal to the enjoyment that the syndicate members derive from being involved.
Company Ownership
Company Ownership is also a possibility in New Zealand. New Zealand Thoroughbred Racing must approve the company for racing horses. Essentially shareholders in the company are the owners of the asset, in this case the horse or horses.
Leasing - an alternative to ownership
In New Zealand you do not have to purchase a horse to enjoy the fun of ownership. Many first-time entrants into the industry choose to lease rather than buy a horse.
Leasing provides the opportunity for people to race a horse without having to get the capital investment to purchase the horse to begin with.
Essentially the horse belongs to the lessee (person or partnership or syndicate) for racing purposes. The lessee is responsible for the costs associated with the care and racing of the horse and collects the rewards from racing.
Leases are subject to the registration of a formal lease agreement that is held by New Zealand Thoroughbred Racing. The terms of a lease vary from lease to lease.
Example of an actual lease
A right of purchase can be included on a lease and it is common for the lessor to be entitled to a percentage of prize money won.
This was the situation with New Zealand champion Sunline (NZ). Sunline was leased to Trevor Mckee, Thayne Green, and Helen Lusty from her breeders, with a right of purchase up until the end of her four-year-old season. Well before this time Sunline had shown she was very good, and the right of purchase was exercised. If Sunline hadn't proven herself to be a star, her breeders may have had their mare returned knowing that she'd had a shot on the track and that they hadn't had to meet any of these costs.
So how do we make the dream come true? In this Ownership section, we take you through the steps to becoming an owner and bringing the dream a little closer. Firstly we look at some of the basic questions surrounding buying a racehorse.
A Racehorse: where does he or she come from?
There are sales to fit all budgets, but unless you know what you are looking for, make sure you ask the advice of a trainer or bloodstock agent before you get the urge to flay your arm about in the auction ring. A trainer will advise, inspect and even purchase for an owner with the expectation of training the horse, while an agent will charge either a negotiated fee or a percentage of the purchase price (5-10%). Details of the registered bloodstock agents can be found here.
If you have decided to purchase the racehorse of your dreams, the yearling sales are an excellent place to start looking. New Zealand breeders offer almost a third of the annual 4500 foal crop as yearlings every year, most of these being sold at New Zealand Bloodstock’s www.nzb.co.nz Karaka sales facility. With such numbers come considerable variety and a range of prices from $1,500 all the way up to the Southern Hemisphere record price of $3.6 million paid in 2003 for a colt at Karaka. That colt since won a Derby in Australia, tripling his value.
What sort of money is needed to buy at auction?
Depending on the session you are watching, anything from a few thousand dollars right up to a few hundred thousand. The high-profile Premier Session of the NZ National Sales held every summer is likely to post an average in the region of $125,000-$155,000 but the horses become more affordable as the sales go on. The next tier down is the Select Colts and Select Fillies. And at the Festival session many horses are sold for less than a couple of thousand dollars.
The highest priced yearling is not necessarily the best racehorse, just the most sought after in the sale ring that day. It is important for potential buyers to identify what they would like to do with a horse (a potential Melbourne Cup starter will have different breeding and physical attributes to a horse bought to race as an early two-year-old) and to take the appropriate advice before making a purchase at auction.
Private Sale
A horse can be bought privately from its current owner, usually through an advertisement or word of mouth. It is important that the horse passes a veterinary examination for racing purposes before agreeing a sale.
Ready to Run Sale
This is a sale (usually held around November) where horses which are ready to run in races, are sold. These take a slightly different format in that “breeze ups” (where the horses run on a track) are held prior to the sale and videos made available for potential owners. The advantage of these sales is that your horse should be close to be able to enter a race, you do not have to wait for it to be broken in and trained as happens with a yearling purchase.
Do I have to buy one?
Not if you can do what Sunline’s astute trainer did and lease a horse. Leasing allows the easiest entry to thoroughbred ownership, removing the capital component and meaning the lessee’s only costs are the actual training costs. Put simply, this means you rent the racehorse, usually from its breeder. Many trainers will find a horse to lease for a potential owner, while studs may also be able to assist in this regard.
