Barney Curley on bookie manipulation

[Iron]

The following article answers my question about why a horse loses 80% of its value once you've bought it:

How do you maintain value of thoroughbred foals once they grow up to be racehorses?

By Rachel Pagones, Amy Bennett and Nancy Sexton
24 OCTOBER 2007

Rachel Pagones on two sobering messages from last week one, typically 'in your face', from Barney Curley, and the other, more veiled, from Sheikh Mohammed, on the state of the British racing and breeding industries.

IT WAS an incongruous sight, parked to the side of the endless stream of sports cars, limos and coaches full of parties heading off for a sun-filled finale to the racing season on Newmarket's Rowley Mile.

The Champions Dayracecard was offering a mouthwatering £1 million-plus in guaranteed prize-money, and took place on the final day of two weeks of Tattersalls October sales, which saw nearly £100,000,000 worth of yearlings change hands.

Yet there, in a lay-by, was the plain white horsebox with this seeming non-sequitur: 'Why, if you buy a racehorse, does it lose 80% of its value overnight?' The perpetrator of this Grinch-like stunt was easy enough to find, as he left his name and website address. It was Barney Curley, gambler, trainer, racehorse owner and the founder, in 1996, of charity Direct Aid For Africa (DAFA).

Curley has posted 11 audio recordings linked to YouTube on the DAFA website (http://www.dafa.co.uk), in which he lays out his view of what is wrong with racing. That is plenty, but Curley's latest article, as he calls them, posted last month, is his last for a while, as he is now concentrating on the charity, which received £2.5 million from the sale of the Racing Post this month.

What is wrong with racing, according to Curley? He begins his talks, which are recorded in a folksy manner - in one case you can hear hoofsteps clopping through the background - addressing "My fellow sufferers", perhaps a nod to the Charles Dickens novel Hard Times.

The oppressors of racing, says Curley, are first and foremost the big bookmakers, followed by the Jockey Club. The bookmakers, he says, "have used racing to establish themselves while all the racing authorities were asleep. They've chewed all the meat and are now in the process of spitting out the bones".

The Jockey Club comes in for equally picturesque criticism. Curley says it has "sailed off into the sunset, leaving behind a great sport on its knees, with the vultures swooping lower all the time".
I called Curley to ask about the 80 per cent loss in value of a horse's purchase price. Where did the figure come from? His answer: "I've been in this game for 45 years and that's where it comes from. That's my experience."

So no, the figure didn't come from an exhaustive, unpublished report damning the commercial breeding industry. Such a pessimistic report from Curley, who has a colourful past in racing due in part to his legendary gambling exploits, might be written off by some as the cry of a lone wolf.

However, there are reasons to believe we should listen to the heart of his message. For one thing, he is not alone in his concern for the state of British racing, and Curley's talks have been overwhelmingly well received.

Another self-financed man with a passion for racing and a determination to bring about change also spoke out, albeit in a much more nuanced way, this week.
Sheikh Mohammed used the occasion of releasing the 2008 stud fees for his Darley stallions to issue a veiled warning about the future of the bloodstock industry if a solution to British prize-money crisis cannot be found.

Through his bloodstock adviser, John Ferguson, the sheikhlet it be known that he believes there is a strong chance yearling markets will soften if prize-money levels do not improve. His solution is to lower the fees for his stallions at Dalham Hall and Kildangan studs, and he was not coy about admitting that will be to the benefit of both breeders and the growing Darley stallion empire.

Dalham Hall's arched entrance is a world apart from Curley's horsebox, but the message emanating from both is not so different. Indeed, they target the same problem, and if Sheikh Mohammed does not address mare owners as "My fellow sufferers", Ferguson made it clear that he considers them his partners in breeding.

The problem is how to maintain the value of thoroughbred foals once they grow up to be racehorses. Figures to be published by the Racing Post this week will show that the percentage of keep and training expenses covered by prize-money won per runner in Britain last year was 24 per cent, down one per cent on last year's published Racing Post figure, and down from 28 per cent in 2003.

Apart from Curley's empirical survey, there is at least one other recent study documenting the path of a thoroughbred's value in Britain.

Professor Twink Allen and Sandra Wilsher, of the recently closed Equine Fertility Unit in Newmarket, released a study at the end of 2005 which was covered in the Racing Post and published in the Equine
Veterinary Journal in 2006.

The study documented wastage in a population of 1,022 foals conceived in the Newmarket area, including all of the major studs, in 1998. Allen and Wilsher followed the horses' careers through their three-year-old season in 2002. Their conclusions were sobering.

Using an extremely conservative estimate of £10,000 annual keep, they found that only five per cent of two-year-olds and 17 per cent of three-year-olds in training covered their costs. And only a small percentage - less than nine per cent of two-year-old runners and 22 per cent of three-year-old runners - earned more than £10,000. That is less than half the median price of this year's Tattersalls October Yearling Sales Books 2 and 3, covering the uppermiddle to lower end of the market.

The one safety net for owners has been residual breeding value, and Allen and Wilsher found that half of all fillies in training were retired by the end of their three-year-old seasons. Rather depressingly, considering their genes will be passed down the generations, 72 per cent of these had never won a race.

When owners do not have a fair shake of getting a return on theirinvestment via racing, they turn to breeding. More and more investors are looking to breeding as a means to turn a profit and enjoy some excitement along the way, much as one might hope could be done in racing. It wouldn't be such a problem except that there are not enough buyers who want racehorses, while too many mediocre or downright poor-quality fillies are entering the breeding population.

At the moment the yearling market seems to be holding up. Keeneland's September sale had a thriving middle market, while Books 1 and 2 of the Tattersalls October sales were stronger than anyone had predicted. The Goffs Million, St Leger and Arqana Deauville sales have also been very solid, especially given the volatility of stock markets during the same time frame.

But the concern is that it may all turn out to be a house of cards. Even at Keeneland, there was a deep-seated concern that stud fees are too high for commercial reality.

Auction companies have tried to address the problem with lucrative sales races. But the underlying prize-money crisis remains, and upon it rests the health and future of both the Tattersalls sales and Champions Day. It might be worth stopping to check out the message on that horsebox after all.