According to a recent survey in Ireland, owners value the lifestyle and experience of attending the races over profit and prize money. Horse Racing Ireland CEO Brian Kavanagh presented figures on owner motivation as part of the recent International Federation of Horseracing Authorities conference in Paris. Additional speakers on the topic included Olivier Delloye, director general of France Galop, and Team Valor International CEO Barry Irwin.
Delloye and Irwin agreed that owners are happy to make money but prioritize the social aspect of ownership over finances. This is fortunate, since both agreed it's rare for owners to make a profit on their horses.
When Irish owners were asked what they most enjoyed about having racehorses, 30 percent said going racing with their horse. For 15 percent, the aspect of owning horses with friends and family was most important, and another 11 percent got into the business because of a family connection. Fourteen percent wanted the behind-the-scenes access that comes with horse ownership. Another 9 percent considered the horse a business investment.
Just 14 percent said they owned Thoroughbreds because they had a love of horses.
In the United States, attempts to market racing to fans as an 'elite lifestyle' or 'high class experience' are often met with criticism, although it seems for those advertising ownership, that approach may be correct.
Irwin believes that sometime around the end of World War II, ownership was promoted by bloodstock agents as an investment opportunity rather than a fun extravagance. In Irwin's experience, this seems to be a mindset unique to the United States, as other countries do not appear to make the same error, and it's also unique among horse sport. Owners of top gaited and eventing horses aren't driven into the business in hopes of selling the horse for a tidy sum, he pointed out, and aren't told to expect one.
In fact, in Irwin's experience, owners in a syndicate turn out to rarely be interested in selling their horses during the animal's racing career at all.
“When presented with a profit, nearly all of them turned it down unless they got a crazy, outrageous offer,” said Irwin, who recalled just three horses in his 30 years of running Team Valor that were sold by their co-owners during their careers. “By and by, we discovered the main reason our customers bought horses was not the prospect of turning a profit, but the pride of owning a horse.”
Delloye said Europe is struggling to get and keep new owners. The Irish survey indicated finances are a major part of this struggle, with 57 percent of lapsed owners citing money as the reason for their exit. Among those lapsed Irish owners, 68 percent wanted to return, and 88 percent had deemed their experience 'enjoyable' or 'hugely enjoyable.'
The top levels of the sport seem to reflect a shrinking ownership pool; Delloye noted that on a list of top owners in Great Britain, Ireland, and France, many of the names were the same, and many entries were single entities or partnerships with two or three individuals. In Australia, he pointed out, the list is much more diverse and is almost entirely made up of syndicates.
Another barrier to new owners, which Delloye noted was especially challenging in France, was the learning curve.
“I quickly figured out as I was working for Arqana that it was much easier to get a new owner than to retain him,” said Delloye, who served as managing director at the sales company. “There is a big sum of detail that can make (or not) his experience a good one.”
The tax expense and extensive paperwork involved in buying a horse in France is part of the problem, Delloye said. Then there's the consideration of owners who can't experience their horse's training first-hand – along with a decline in domestic ownership, France has seen the number of foreign individuals with horses running in France blossom to 600. Delloye estimated two-thirds of buyers, who spend upwards of €40 million (about $45 million) per year at Arqana, were based outside of France.
“Buying a horse is pretty easy and straightforward,” said Delloye. “Getting registered as an owner, understanding the local tax rules, making the right decisions without having a good knowledge of the country is another story.
“A newcomer must be nursed. You must place them as of Day 1 in the hands of a good tax advisor, a good accountant, and an agent who must handle the whole process from A to Z. Owners don't have to be exposed to the complexity of the experience.”
Delloye announced France Galop is working on a smartphone app that could simplify communication for owners and trainers alike. The app would prompt trainers to send photos, video, audio, or written notes about a horse's progress to help engage owners who are out of the country in different time zones. It would also reduce the number of calls necessary from the trainer.
“Getting pictures, videos, and voicemails on the horse's progress after work in the morning has become a 'must' and not a 'nice-to-have,'” said Delloye. “Sometimes, even a picture that shows how a horse has developed will please [the owner] and I bet you he will show it to his friends.”
Delloye did not give a projected timeline for completion of the app.
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