Denali Stud, the Paris, Ky., nursery owned and operated by Craig and Holly Bandoroff, has been atop the leaderboard among consignors of American Graded Stakes winners for most of 2011. That's no small accomplishment, for Denali is not what most people would consider a high-volume seller. For the 2011 Keeneland September sale, for example, Denali has just over 120 yearlings catalogued.
“We tell people you're not going to get lost in the shuffle,” Craig Bandoroff said, “but we are big enough to have the strength in numbers that you need to have. You need the numbers to enjoy the kind of success we are having this year with Graded stakes winners. We never wanted to be a mega-sized operation, but you need numbers. You learn over time where you do a good job and where it starts to jump off the rails. We've had a couple of consignments bigger than 120, and we weren't real happy.”
Like many commercial operations, Denali took a big hit in 2008, when the global economy went into the tank. The farm lost about 15-20% of its equine population from that initial onslaught.
“Since then, we've held our own amazingly well,” Bandoroff said. “We've stabilized. We had to make some operational changes and tighten the screws. We made all the easy cuts then, but we haven't been forced to make the next set of cuts, which will be a lot harder.”
Like many Kentucky breeders, Bandoroff is concerned about the future of the Blue Grass State's signature industry, especially now that the New York Thoroughbred breeding program will start to benefit from revenue generated by video lottery terminals at Aqueduct.
“I'm afraid there will be a mass exodus of horses from Kentucky,” he said. “That could have a big effect on me and everyone else. As we saw from the (New York-bred) sale in Saratoga, people want New York-breds. The writing is on the wall. We can paint it any way we want, but the New York program is very smart: you can leave the state to be bred and come back to foal. I hope I'm wrong, but I don't see how I am. I think it's going to really affect Kentucky.”
Until Kentucky's legislators understand how other state incentive breeding programs are impacting the Blue Grass State's Thoroughbred industry, Denali will continue to do what it does best: offering portfolio management services to its clients who are looking for a full-service operation and selling at yearling and breeding stock sales.
“I guess we are going to sell probably 170 yearlings, this year,” he said. “We raise a lot of them, we do prep a lot of them. Some do come from other places. We have a group of clients where we are very involved in their programs and portfolio management. The majority of those do board at the farm. One of the keys to our success is we only do a couple of things, and I think we do them well, but we don't try to be all things to all people.”
Bandoroff, who started Denali in 1990, at the suggestion of a client completed an executive management program at Harvard University last year. He said the program gave him a far greater understanding of the business world.
“It was an outstanding experience,” he said. “It might be a slight exaggeration to say it was life-changing but not far from it. It gave me a better understanding of who I am in this business, what my role is within my company, as well as some personal things. There were some great insights I took from it. To have a successful company you have to build a strong team to be competitive, and you have to know what your role is and what the role of your key people is. I had a college education, but it wasn't business related. This exposed me to a lot of new things. The horse business puts us in our own little world and like any agricultural business we are affected by Mother Nature, but one thing I walked away with is that business is business. It could be a horse farm or a guy running a gas station on the corner. It was a great experience for me and very worthwhile. “
With that knowledge in hand, how does Bandoroff see the upcoming market at the Keeneland September sale?
“It's hard to know, he said. “You can't make markets. All we can do is just cross our fingers and hope for the best.”
He acknowledged that Fasig-Tipton's August sale at Saratoga was successful but “was greatly affected by Sheikh Mohammed's presence in a positive way. There is a core group of people who want to do this, who want to own racehorses. One guy said to me, ‘Everything else stinks, and I'm going to race horses because it's something I want to have fun with it.' All we can do is the best we can do. Get them ready and hope we have a good group.”
There's no question the group of Thoroughbreds carrying graduate degrees from Denali Stud are performing well in 2011.
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