Syndication – A Way to Share the pleasures of Equine Ownership
Owning, looking after and if paying for training, any horse is not a cheap exercise. In the racing world though, for the past thirty or so years, there has been the option of sharing equine ownership, the expenses and the pleasures with others. This is commonly known as syndication. Racing is known as ‘the sport of kings’ and to have a horse in training quite often requires a king’s ransom to pay for it. Sport horse ownership is also now beginning to utilize this form of ownership as well, but mainly for top international horses.
Elizabeth, The Late Queen Mother once famously said “Racing is 99% disappointment and 1% absolute elation” when she was once asked about her exploits in the sport. She was an avid National Hunt supporter rather than the flat, but the saying is quite appropriate whichever side you enjoy more. There are plenty of people around the world who enjoy the thrills and spills of racing, (thank goodness for the thoroughbred industry,) but few can afford such luxuries. The mind set however, is not just about the money, for most involved, it is about the love, elegance and beauty of the horse and its ability to provide a past time away from the usual drudgery of life.
The bloodstock industry has always had a remarkable way of changing in order to keep the racing to the fore. Particularly at the moment, when most of the rest of world industry is in chaos due to Covid – the bloodstock industry has adapted and kept going much as before, although under different protocols. Look at the recent yearling market, when generally, the sales were, not as could have been, a complete blood-bath, but vendors quickly adapted to the circumstances around them which resulted in many good returns financially, and clearance rates which were up on previous years.
Really, from the 1970s, when the Ted Heath government in the UK made a complete hash of the UK economy, which resulted in a deep recession, the bloodstock industry started to have horses racing where ownership was shared – syndicated – which is a practice still employed today more than ever, to keep the wheels turning. This had two major effects. The first is that it kept the finances necessary to maintain the sport, even as a complete leisure activity, and secondly, it introduced a huge number of people into the sport, who otherwise could not have afforded the costs.
Today, there are many forms of ownership of race horses, and something which is now becoming more common in high valued top sport horse ownership as well. If you are “richer than God”, with money exploding from every orifice, then more than likely, you can have a string of horses and pay for their upkeep and training etc. But there aren’t too many of those around so partnerships and syndication is a great way to be involved.
Rules surrounding the ownership of horses is controlled by Weatherbys in the UK and France Galop in France etc, each body organising and running racing for their respective country. Even in the top echelons of ownership, like Coolmore for example, the horses are owned in partnership. In Coolmore’s case, three main owners who share out all the horses they have their ownership, Sue Magnier, Michael Tabor and Derek Smith.
Syndicates can have up to 20 members and are set up in several different ways. The first is when, usually a trainer or specialized syndicate manager has say three horses which they have brought at the sales and they sell shares in the group of horses. The investor, a word used with some trepidation as most horses in training do not see a positive return, pay once into a fund which will pay for part of the horse and all the training, veterinary and entry costs, in fact all costs associated with those horses for a specified length of time, after which the horses are sold. Other types are when a similar set up is used, but the initial payment is less as you are only paying for a share in the horse. Then all the bills which accrue are billed at so much a month per shareholder. The advantage of this is that the initial payment is less and it is more like buying on credit with an easier monthly payment, thus making cash flow less arduous. The beauty of syndication is that all the owners/subscribers, call them what you will, have the perks of being an individual owner. They are able to go racing for free using owner’s badges when their horse runs, they get part of the prize money and they get back a sum of money divided between them when the horse is sold. And, the most important thing is that a syndicate member can enjoy and become fully involved in the sport of kings for a cost which is affordable. Another, quite popular form of syndication is when the ownership of the horse is not included in the deal – the horse is leased from the original owner. This has the attraction of no capital payment for the horse or group of horses themselves, and either a lump sum is put into a fund to pay for all its expenses, or the member pays a monthly fee. The member then enjoys all the benefits of ownership except at the end of the term, what happens to the horse, whether it is sold or sent to stud is entirely the decision of the owner and there is no sum paid back to the members.
There are of course, other forms of ownership, namely Racing Clubs. These are with many horses within the club and people can pay a small amount into the club and enjoy a small part of ownership at the race meetings etc.
It is interesting now that top sport horse are being syndicated in a similar way, particularly in eventing, but some top dressage and show jumping horses are also now owned by syndicates. It is a system of owning horses and allowing members to feel fully involved in the sport they love so much. Sometimes, the syndicate finds that it has a real world beater, and when it comes to the prize money earned and the selling, the returns are fantastic and large profits can be made all round – but don’t bank on it!!!!!