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    How Much Does It Cost to Purchase a Racehorse?
How Much Does It Cost to Purchase a Racehorse?
Toy horse on dollar bills. Source: Shutterstock

How Much Does It Cost to Purchase a Racehorse?

There are numerous approaches to purchasing a racehorse, and there is no definitive method to do so. The most suitable approach for you will be determined by your level of ambition and the state of your finances.

While it is true that occasionally, a horse may emerge as a rare gem and bring you substantial winnings, horse racing is primarily meant to be a hobby. This is why the saying goes, "If you want to make a small fortune from horse racing, start with a large one."

It's essential to consider the expenses and limitations associated with purchasing a thoroughbred. However, despite the potential risks and costs, the rewards can be significant if you happen to come across a promising and developing animal.

How Much Does It Cost to Purchase a Racehorse?

There isn't a definitive answer to this question.  Affordable yearlings (horses aged one to two years) can be found, although it must be noted that their potential may be pretty limited.  When it comes to horses, and some might even argue humans, a significant portion of their potential can be somewhat anticipated based on their lineage. As a result, those with exceptional breeding will undoubtedly come with a hefty price tag.

It is possible to acquire a racehorse for a modest sum of £500 or £1000. However, it is essential to note that finding favourable opportunities to support the horse and potentially earn some money may prove to be challenging. This is due to the limited availability of prize money for such an animal.

It is not uncommon for owners to invest significant sums of money, ranging from £10,000 to £20,000 or even more, in acquiring a thoroughbred in the UK. At this price range, there is a possibility of finding a promising horse that has the potential to win substantial prize money.  However, in some instances, they often demonstrate minimal proficiency or even sustain injuries during their journey.

However, the excitement of purchasing the finest lineage racehorses is typically reserved for a select group of affluent individuals.  In October 2017, the racing stable of Sheikh Mohammed and the Maktoum family, Godolphin, made a significant purchase at the Tattersalls sales in Newmarket. They acquired a filly for a substantial sum of 4 million guineas (£4.2 million), which caught the attention of many esteemed individuals within the sport.

High fees exceeding £1 million are frequently observed throughout the racing season, and specific studs have such a well-established track record that the expenses incurred for purchasing a horse at auction can be regarded as a prudent investment.  Not only is it highly likely that the horse you buy will go on to achieve a commendable level of success and earn a substantial amount of prize money, but the horse itself will also hold significant value as a stud, which is where the actual financial gains are realised in this industry.

Horse with its owner. Source: Ridely
Horse with its owner. Source: Ridely

Costs of Ownership

For those aspiring to become racehorse owners, there are numerous factors to consider beyond the initial purchase.

Expenses encompass training fees, expenditures for upkeeping gallops, transportation costs, veterinary and farrier services, jockey fees, race entry fees, and numerous other miscellaneous expenses.  The typical expense for flat horses generally amounts to approximately £23,000 per year on average, although this figure can increase depending on the trainer you select.

The typical amount earned from participating in jumps is approximately £17,000. However, it is essential to consider the potential for injuries and the absence of prize money, which can still pose a risk despite the lower entry fees.

Let's consider the situation: if the typical flat jockey makes approximately £20,000 and it costs around £23,000 to keep a horse in training, the sport heavily relies on owners to sustain their enthusiasm and financial support.

The Concept of Shared Ownership

Considering the cost associated with owning potentially high-quality racehorses, a popular approach that numerous individuals opt for is participating in shared ownership.

Groups, commonly referred to as syndicates, possess a growing number of racehorses in Britain and provide their owners with the opportunity to participate on race day in a manner comparable to that of a Saudi prince or an Emirati Sheikh.

All co-owners of a horse will have the privilege of accessing the course, the owner's bar, the parade ring, and other exclusive areas. This allows them to fully immerse themselves in the racing experience instead of merely observing from the stands or placing bets in the ring.

Part-owners can avoid the hassle of setting up purchases by joining an established syndicate for a nominal fee. Groups typically offer a restricted quantity of shares, providing aspiring racehorse owners with an opportunity to enjoy the excitement at a relatively affordable price without having to share their horses with an excessive number of individuals.

For a set price, syndicates often offer the enticing opportunity to own a racehorse without the inconvenience of navigating through the BHA and other racing organisations. There are even options available to become a part-owner of a horse for just £25 per month.

The Process of Purchasing and Selling Racehorses

First and foremost, the legal rights you have when it comes to horses can vary greatly depending on whether you are purchasing from an individual seller or a professional trader.  In essence, purchasing a horse from a trader or dealer offers you more significant legal safeguards compared to buying from a private seller.

When investing in a syndicate, naturally, the syndicate administrators handle all the necessary tasks on your behalf, leaving you with the simple responsibilities of making monthly payments and attending race day. Nevertheless, in the upper echelons of the sport, the dynamics change slightly.

The sport's most significant stakeholders often employ dedicated racing managers to oversee their stables or stock, as they possess an extensive number of horses that cannot be managed alone.

Privately Purchasing and Selling Items

Similar to any other product, racing thoroughbreds can be purchased and exchanged privately among individuals. However, prospective buyers need to seek legal representation to safeguard against buying a subpar horse without any means of recourse.

With that being stated, regardless of whether you are not investing in a syndicate or desiring to initiate your extensive racing stable, you have the option to employ a licensed trader to locate a racehorse that fits your financial constraints, whatever they may be.

Nowadays, traders have user-friendly websites that display horses for sale along with their price (including or excluding VAT) and a photograph of the animal.  When you click on each available lot, you will find additional details, similar to how a website for selling cars would provide more information.

Instead of luring you in with phrases like "taxed and MOT'd until January," you might come across something like "three-time champion with a promising future as a broodmare," for instance.

If you have a specific preference, you'll find that the horses are also classified into various categories such as Stallions, Broodmares, Yearlings, Foals, Unraced Horses, Jump, Flat, Syndicates, and Shares Horses, among others.  You can also filter by price to avoid being tempted by items that are beyond your budget!

Horse auction. Source: YouTube
Horse auction. Source: YouTube

Auctions

Those who are knowledgeable and can handle the fast-paced environment might consider attending an auction to personally inspect their potential purchases before placing a bid.

Notable auctions in the UK include Goffs in Doncaster, Graham Budd in London, and Tattersalls in Newmarket. These prestigious events facilitate the trading of valuable bloodstock, amounting to millions of pounds.

However, these are just three illustrations, and the possibilities are limitless. The Racing Post, a popular trade paper, provides comprehensive listings of upcoming auctions categorised by type and date. Additionally, experienced representatives specialise in horse trading on behalf of owners and trainers, earning a lucrative income from this profession.

There are various kinds of auctions, so buyers should determine which type is most suitable for their needs before making a purchase.

Sales of Yearlings in Contrast to Breeze Ups

There are two primary choices to consider when contemplating the purchase of a young horse with aspirations for a successful flat racing season. This endeavour has the potential to be highly profitable, provided one is able to acquire the ideal equine companion.

The Yearling Sales occur during the autumn season. The horses are considered 'unbroken', meaning they have not undergone any training with a trainer. Consequently, potential buyers evaluate these horses solely based on their physical appearance, lineage, and, occasionally, their reputation.

After purchase, the yearling will be entrusted to a trainer for a monthly fee, with the intention of entering races starting from the subsequent spring once they reach the age of two or older.  On the other hand, specific individuals may not be prepared to compete until they reach their third year, which is contingent upon their level of development. As a result, it is crucial to exercise patience in such cases.

The Breeze Ups, however, have a distinct nature. They occur in the spring when these very same horses, which are available for purchase, have reached the age of two. During this event, they participate in a two-furlong run, commonly referred to as "breeze up," allowing prospective buyers to assess their movement and action.

Some individuals even rely on specific timeframes to guide their choices, although scepticism exists regarding these kinds of promotions' authenticity and ethical implications.

Some individuals are concerned that young horses may be subjected to excessive pressure and expectations to achieve high performance and fetch a lucrative price. This approach may not necessarily lead to further improvement as they mature, which can be disadvantageous for the owner.

Claiming

Another option for acquiring a racing thoroughbred is to "claim" one through the races organised specifically for this purpose at almost every racecourse in the country.

A Claiming Race is a type of race where the weight assigned to each horse is determined by the value assigned to them by their connections. But, the trainer's desire to win the race leads him to seek ways to reduce the weight his horse carries. However, this decision comes with the consequence of devaluing his horse, making it more susceptible for someone to 'claim' it after the race and remove it from his stable.

Horses can be acquired, meaning purchased, by other owners or trainers for the designated price immediately after the race is completed. However, the regulations for a Claiming Race differ slightly from those for a Selling Race.

All runners in a Selling Race, except the winner, can be claimed for their set price, similar to a Claiming Race.  However, in a Seller, the victor is solely auctioned off in the ring after the race. As a result, it becomes a matter of chance for a prospective new owner to either snag a fantastic deal or witness the price of their potential acquisition skyrocket.

Purchasing in this manner is not an effective strategy for discovering a potential rising talent, as the overwhelming majority of horses participating in claimers' or sellers' races are generally regarded as the least skilled horses in the racing community, regardless of whether they compete on the flat or in jumping events.

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