One significant reason to write this blog is that I always wanted to investigate all the small partnership operations. Starlight, West Point, and Eclipse are the Apple, Amazon, and Google of the partnership business. I have always been a “small cap” investor that wants to find the well run companies that few others know about.
Bloodlines Racing is just such a partnership. Dr. James McGlinn is the founder and has been breeding and racing for many years. The racing record of the partnerships is 22 wins from 114 starts, with over $1.3 million in purses. One horse, Invading Humor, has 8 of those wins and over $500,000 in purses. The focus seems to be breeding NY-bred turf horses.
Unlike the other partnerships, BR breeds its own mares. They do not buy horses at sales. They also have a unique structure they call “One Time Cost”, where a partner pays a one time fee, and never pays any additional costs.
First let’s focus on the horses being offered, and think about costs later.
The first is a Noble Mission colt, from a War Front mare named Conquest War Miss. The second dam is by Dynaformer and was a stakes placed winner of over $200,000. CWM ran three unsuccessful races under the ownership of McGlinn, and was then retired to the breeding shed. It appears that CWM was purchased at the Ocala sale in 2014 for $150,000. This is CWM’s second foal, the first is by Awesome Again and has not raced. The colt is a NY-Bred.
I like Noble Mission as a sire, and I generally like any pedigree where Dynaformer is involved. If West Point or Eclipse offered this horse I would certainly look very carefully.
The BR offer is $1,900 for 1%, but this is a “one time” fee.
Twenty Noble Missions sold at the Keeneland yearling sale last year, the top 5 sold for $200,000, $110,000, $105,000, $80,000, and $60,000. Noble Mission’s stud fee is $20,000.
Now lets think about the “one time” fee.
Let’s assume the horse earns $100,000 in 2021 and 2022
For my $1,900 investment I would get back $2,000, and excitement of watching the races.
Now let’s assume the horse only cost $100,000 but I had to pay my share of expenses (lets say $70,000 per year). My income would still be $2,000, my initial cost $1,000 but I would making two expense payments of $700 each. The result would be a net loss of $400. So the “one-time fee” would be better.
What if the horse only earned $50,000 in 2021 and $25,000 is 2022. With the one time fee my net loss would be $750 – $1,900 = -1,150. Under the expense paying model my loss would be $750 – $1,000 -700 -700 = -1,650
I guess the scenario that would make the one time fee worse is if BR assumes the horse has little talent and drops him into a $20,000 maiden claimer after 3 races and loses the horse. In that case my loss would be higher under the one time fee.
In all honesty I am going to have ponder the “one time” fee structure for awhile.
The other critical question is how to evaluate a horse that has never gone through the scrutiny of a public auction. There are clearly positives and negatives.
The second offer is a Kitten’s Joy filly that is the first foal of an unplaced Blame mare. In this case, McGlinn bought the mare in a Keeneland Breeding Stock sale for $45,000. I am a little hesitant to buy first foals, so I will pass.
Buying A Race Horse 