Breeding Fights

The news that Synergy Investments of Dubai has agreed to purchase Fasig-Tipton has gotten very little press as far as I'm concerned. Dan Liebman wrote about it in his What's Going on Here article in the April19 issue of The Blood Horse, and there was the reports of the sale in the DRF. It is tacitly acknowledged that Synergy is, if not outright, then at least practically, controlled by Sheikh Mohammed.

It is hard to knock Sheikh Mohammed. He certainly puts his money where his interests are. Trying to figure the total amount he has invested in the thoroughbred industry would be a considerable undertaking; likely it would be more than the budget of many small countries. However, I am not enamoured with this development. I would like to state, before I go any farther, that I would be just as dismayed if it was Coolmore that had been the purchaser. And if they had I would say the same things. My reasons are manifold.

There already exists a somewhat unhealthy competition between both Sheikh Mohammed and the Coolmore gang and this can only add a greater chill. The result of this cold war is that it artificially restricts competition. While both players are playing at the top end there are many commercial breeders that target that market. I imagine it already hurts when one of these behemoths decides not to enter the race because of which stallion sired a particular hip. It hurts at the sale level and hurts when the breeder has to decide which stallion to book their mares to (one needs to know their market). Not to mention the 'trickling downward economics' that results to the pinhookers. Risk is already very high in every facet of the business, it seems unfair to add even more politics to a political game.

I'm not a fan of this whole aspect of the business but it is the aspect that fuels the industry. I am engrossed in pedigrees and for the most part I don't think commercial breeders breed with acuity as far as producing great racehorses. They breed fashionably. But they're in the market to sell horses not race them, so if that's what the market demands maybe it is the market and not the breeders that truly determine the product. But control and determination of the market is somewhat at stake here. Will it remain as objective as it is at the moment?

I absolutely don't like the two year old in training sales; much more harm than good. But again it's what the market responds to. What this all boils down to is that all these aspects I've just listed are already somewhat askew because of the need to buy and sell. What happens when someone has too much control over the entire market? If there were two major factories that produced cars and one factory owner was allowed to decide which cars to buy and sell would anybody be surprised if he decided create profit for his factory first? I know this is a little simplistic but I find it troubling anyway. Will there be pressure on breeders that have bred to Darley stallions not to sell at Keeneland? Will there be incentives to sell at Fasig-Tipton? Will the coolness that exists now between these parties 'trickle down' to smaller breeders? There seems a lot of what ifs. More than likely everything will work itself out without a hitch but someone ought to at least ask these questions.

We all reap the rewards of capitalism. But if the current economic downturn teaches us anything it is that even capitalism needs regulation. That was the lesson of the Great Depression and it was slowly forgotten. Our memories have only recently been jarred back to this realization. I think this principle needs to be applied in the thoroughbred industry as well. It is not a good idea for so few to control so much input, output and consumption. The name Bear Stearns comes to mind.