Thursday, August 25, 2011

A Chat with Perretti Farms' Bob Marks

One of the most successful breeding operations, not only in Jersey, but in North America announced last week they are dispersing their holdings. 

The name Perretti Farms has always been respected, and virtually everyone in the harness community was saddened by the news. We asked frequent blog reader Bob Marks, who handles the marketing for Perretti, some questions, and we post them here.

We first asked Bob: When decisions were made to disperse, how much of it hinged on pure economics, and how much on simply wanting to call it quits. Did the uncertainty in racings future play a major role?

"New Jersey is at a disadvantage when compared to neighboring states that have racino revenue, so that played a role" wrote Bob.

Bettors and breeders are on the same page with that one. Not only does the lack of casino revenue hurt entries for us to bet on, it depresses yearling prices on the supply side. When both ends of your spectrum are being hit - supply of racehorses; yearlings and racehorses, and the demand of bettors - it's not pretty. 

Supersire Rock n Roll Hanover
I had read in Harnessracingupdate.com, Bill Finley's newsletter, that Anthony Perretti spoke about partnerships really hurting yearling prices of late. The thinking goes like this: When four or five (perennially) big yearling buyers get together to purchase horses, very few bidding wars ensue, and yearling prices are further depressed. It's common sense really - if you or I look over and see a power group bidding, are we going to look elsewhere, or are we going to try and compete?

"Murray Brown [Hanover Shoe Farms] will tell you that 10 years ago, I predicted partnerization would kill the yearling business and it pretty much has. Everybody is in bed with everybody else or at least privy to what they’re going to do. As a result there is minimal competitive bidding. That doesn’t happen with T-breds." wrote Bob.

As for the question if anything can be done to fix that, I do not think it's likely. You'd have to break up partnerships, alienate your buyers, and probably lose some owners. If we do look at thoroughbred racing - where Bob notes this does not happen - and try and parallel it, one wonders if there would be partnership rules implemented the first time four or five oil barons got together to buy as one. It would no doubt decimate the high end yearling market.

From being a yearling buyer over the years (a small one) and owning a couple of broodmares, I always found - even with slots - the breeding business to be very difficult. Many years ago I asked people in the know what would happen to the breeding business if handle began to fall. Often times there was a reliance that if slots are there things will be well. However, with handle falling, slots money slowing (the 16% haircut in PA and the $11M charge in Ontario examples) and the costs of bringing yearlings to market, we are seeing a squeeze.

Marks: "[When you] figure $20,000 over stud fee as the cost of getting a yearling to market from the time of conception and you can see how precarious the breeding business has become. Moreover, decisions by The Hambletonian Society and Mr. Gural regarding mandatory racing as 4-year-olds by potential stallions will negatively impact the top end yearling market as its hard to imagine anyone giving $300-$400,000 for a yearling knowing he “can’t cash in” as a 3-year-old."

Can anything be done? The business has pulled to card more claimers, and more bettable races. As well, the mantra that it's easier to attract more owners to racing from the claiming game has taken hold in many areas - from new partnerships and as a narrative. This has resulted in some serious money for claimers. It is not uncommon to see purses that equal a pacer's claiming price (in thoroughbred racing it is even more pronounced).

The iron tough Matt's Scooter
"What came first the chicken or the egg? The best betting races tend to be overnights for claimers and conditioned horses not young horses who are always perceived to be “prepping for something else down the road”. The purse structure needs immediate overhaul as it’s asinine for $20,000 claimers to race for 80-90% of their value each week while 2 and 3-year-olds who are not necessarily megastars race for fractions of their purchase price." Bob said.

Although I am a bettor and I completely understand the thinking; I am with Bob on this. Claimers racing for 100% of their purchase price is not good for racing, in my opinion. What we tend to see happening is massive inflation on horse bills, and a willingness to find the next big thing to turn around horses in a week - simply because the money is there. If you or I can claim something for $20k and get 2 or 3 times our purchase price back in a month, while sporting a massive $5000 a month bill, there is a good chance we will. What we see are people injecting every hock, or using everything under the sun to get that investment squeezed, then do it all over again. This, again in my opinion, not good for the sport because it does not put the horse first, and also pushes out mom and pops who do not want vets training their horses. There is no easy answer, and I completely understand the above opinion is not popular with some.

Rather than dwelling on the past, I wanted to ask Bob about what Perretti is offering out this year. As you all know, it's an awesome farm and I would bet dollars to donuts some stars of the equine variety will be dispersed.

"What yearlings are looking good in the field?", I asked.

Two of Bob's current favorites are the full brother to Rockaround Sue (who is racing at Mohawk this weekend) and the Wendy M Hanover brother to speedster Modern Art.

"The brother is better than she was at this point, and the Wendy M colt reminds me of Modern Art." Bob said.

As for some of the awesome stock being offered, here is the short list:

Graceful Touch dam of Muscle Mass and Muscle Massive

Ruby Crown dam of Scarlet Knight

Aerobics dam of Lucky Chucky

Fox Valley Shaker dam of Pretty Katherine

Economic Clout dam of Twist N Clout

Mercy Mercy Mercy dam of Palone Ranger

Simple Gesture dam of Shark Gesture

Examination dam of Costa Rica

Muscling dam of Windsong Soprano

Fairy Tail dam of Talespinner

That's a great list for a potential buyer, but I guess in the big picture, it's sad that it had to be compiled.

We thank Bob Marks for answering a few questions, and reading the blog. All photos are courtesy Perretti Farms.

1 comment:

Brett Coffey said...

I hope Bob is not lost to the sport.