Coolmore Fees 20/21/22/23

I submit based on his 2020 and 2021 sales figures that at $55,000, So You Think was very well-priced, with 2020 median sales figures of $150k being about 3x his fee.  Even with the market disruption in 2021, at $55k most breeders would have made a profit.

At $77k, he's a good-value upper-echelon stallion but not a bargain.  Wooten Bassett is in that same category.  For all that Pierro is a good sire, he was good-value at about the same level ($77k-$80k) but hasn't justified being over $100k this season.

Pride of Dubai may well be the value sire on that list.  Second on the second-crop sires list, more SWs than anyone else in his crop this year, 44% winners to runners, big fee drop to $22,000. 

Where do they go if the two triple crown winners don't fly out of the gates? The list is a 90% rebuild as it is.

Fastnet Rock holds top billing at $165,000.

St Mark’s Basilica ($44,000) and Acrobat ($13,750).
Other notables on the Coolmore roster include Pierro ($99,000), So You Think ($93,500), Justify ($55,000), Yes Yes Yes ($38,500) and American Pharaoh ($49,500).

And I love your bad puns with my (2nd) coffee 

There is a cluster of proven classic-distance sires between $80k - $100k, including Toronado, Maurice, Shamus Award, and Savabeel.  Pierro and So You Think are on the high end of that group, which, you know, okay.  Wootten Bassett is priced attractively for an entry into the AUS market of a stallion with his credentials, and Fastnet Rock has long since earned a fee at that level.

I'm not sure if pricing St. Mark's Basilica at $44k when his half-brother is standing at less than $20k is a vote of confidence for SMB or a no-confidence vote against Magna Grecia.  Invincible Spirit has been a quality sire of sires so far, while Siyouni doesn't have any sons whose foals are racing yet.

But then there's American Pharoah, who is somehow priced higher than St Mark's Basilica and is almost 3 times the fee of Pride of Dubai.  Are people betting that they'll get better as they age?  Both So You Think and Pierro were at the top of the 1st and 2nd season sires list in their respective years, not 10th....

If he's syndicated and has 50 shareholders, then for serving 150 mares then at least 50 of those covers will not bring in a fee.  If the shareholders each send him 2 mares, then at most 50 covers will bring in a fee.  I'll split the difference and assume that 75 are shareholder mares, 75 are outside mares, and 90% will be in foal after 9 months (misses, slipped, aborted) = 68 each for shareholders and outside = just under $7.5M.  That's still a lot of money, but IMO closer to the mark. 

Djebel, you asked for it...    I have a maths degree and I love the chance to use it.  Numbers are from Googling, Bloodhorse (USA), US stud book, AUS stud book, and the assumptions that I lay out below.

US $23.5M for American Pharoah

https://www.paulickreport.com/wp-content/uploads/2020/02/6d59c7d8-e83d-4377-bcf6-044c987f655a.pdf

Justify was sold for US $75M: https://www.businessinsider.com/justify-breeding-rights-75-million-triple-crown-2018-6

So they spent a lot of money, but are they making money?

Justify's stud fee in North America was US $150K for his first two seasons at stud and US $125k for his 3rd season.  Fees are paid out on live foal basis, not on numbers bred.  In 2019 he covered 252 mares for 180 live foals, 2020 222 mares for 174 live foals, and in 2021 167 mares with an estimated 125 live foals.  Assuming 75 shareholder mares each year (same as previous assumption) and an average of 72.5% live foal rate, that's 56 shareholder mares each year.  Then that gives us 124 foals from outside mares bred in 2019, 118 foals from outside mares bred in 2020, and estimated 69 foals from outside mares in 2021.  124 + 118 + 69 = 311 foals from outside mares.  For just the northern hemisphere, assuming my estimates are valid and every outside mare paid full price, that's US 44.925 M over 3 years.  If I assume 50 shareholder mares and the same live foal %, then that's 38 live shareholder foals per season, which in turn gives us 365 foals from outside mares.  Under these assumptions, that's US $52.575 M in fees over 3 years.

I can't do the exact same calculation for his Australian crops because he was listed as private for his first season at stud.  For simplicity, I'll hold his 2021 fee of AUS $55k constant.  He covered 291 mares in his first two Southern Hemisphere seasons.  If I assume the same live foal % (72.5%, average of his NH crops), and 50 shareholder mares each season (37 live shareholder foals each season), that's 145 live foals.  That's a 2-year total of AU$7.975 M, which at today's exchange rate is US $5.673M.

So, at a very rough estimate and assuming 50 shareholder mares, Justify has so far recouped a little over US $58 M in fees.  

Yearling sales prices are kind of tricky, because there's a cost associated with depreciation of the mare's breeding value as well as the cost of mare care and raising the foal to the point of sale. Plus, for sales in the USA or Canada, Coolmore uses agents and I can't just google who they are like I can for his Australian foals.  Anyway, Justify's yearlings sold by Coolmore in 2022 at Inglis Easter and MM Gold Cost totaled AUS $8.225M = US $5.85 M.  If half of that is overhead (mare value, mare care, foal care), then that's US $2.95 M.  Call it US $3 M, and the total income from this horse would be US $61 M.  Coolmore/syndicate would need to sell US $28 M of yearlings they own to break even under these assumptions to get the US $14M they need to recoup the payment cost.  

So, in theory it's possible that they've recouped their outlay, but I suspect that they're short at least a few million.  I note that they're not offering a fancy-pants sports car for people to buy a SYT, Pierro, or Fastnet yearling...

He's already recouped his purchase price and training bills and then some.  Pricing him aggressively is a way to pick off mares who might have gone to Vinnie or Snitzel or perhaps even Written Tycoon, but it could also be a way to get cash to finish paying off Justify before his first 2 crops are done running.

All that said, if you have a horse that is paid off by the end of the 3rd season at stud, and that horse hits it big, that's a license to print money. Galileo and Deep Impact were the uber-examples in Europe and Japan, Into Mischief meets that definition in North America, and Vinnie and Fastnet are good examples in Australia.  That's how the Coolmores and Darleys and Shadais of the world can afford to play big, but since you can't make money to pay off the syndication cost by schtuping yourself (aka shareholder mares), it turns into an arms race between mare owners (who don't want to be left holding the bag if the horse flops) and stallion owners.