Sports fans are often looking for ways to get closer to the action that they follow throughout the season, but that can often be challenging for fans of NFL and NBA teams, as ownership of franchises in the competitions costs billions of dollars.
However, one sport with an accessible route into ownership is horse racing, although it can still be an expensive venture if you’re looking to reach the top of the sport.
But, how much will it cost to own and train racehorses, and what are the most common threats to the investment that could impact your returns? How likely is it that your horse somehow ends up in the Del Mar horse racing picks by TwinSpires.com?
Purchasing A Racehorse
Before thinking about training a champion, owners looking to get into the sport must first buy a racehorse that will compete in their silks. Horses can be brought at a range of different prices, with the biggest impact on the price being down to the progeny of the equine.
In the United States, Championship-calibre racehorses will cost between $100,000 and $300,000 to buy at the sales, with lesser quality horses being available at a much cheaper price. Of course, the pedigree of a runner is the biggest tell behind finding a champion, but there have been countless occasions that cheaper purchases have exceeded their potential.
One of the most notable examples comes from Ireland, as King George Chase and American Grand National winner Hewick was brought for just €800.
Basic Outgoings
After buying a racehorse, the attention then switches to its care, which is also an expensive venture for those looking to make an investment. Overall, the outgoings will accumulate to around $45,000.
There is a day rate set aside by all leading trainers, with the higher price for trainers such as Phil D’Amato set at $120. This takes into account the work that will be completed by employees, as well as feeding, bedding, vitamins, and supplies. In some regions, there will also be other outgoings, including payroll taxes and workers comp in California.
Furthermore, there will also be charges for monthly expenses for the horse, which includes visits to the blacksmith and vets, which could cost up to $1,500. Horses will also need regular check-ups with a dentist and chiropractor.
Entry Fees & Other Commissions
After taking into account the fees required to buy, train, and house your horse, you will then need to put aside money for the equine star to do what they were born to do- race. Entry fees for races will largely depend on the quality of race that you’re entering the horse in.
Only stakes races in the United States require a fee to be paid, but this could be extensive for the notable races on the schedule. For example, connections will need to pay a fee of $120,000 to enter their runner in the Breeders’ Cup Classic. But, the risk could pay off, with the Classic boasting a purse of $6 million. The entry fee is typically around 2% of the purse.
As well as paying to enter a horse into a stakes race, owners will also need to pay trainer and jockey commissions. This is normally taken from the potential winnings from a runner, with 10% typically going to the jockey and trainer. The final consideration that owners must take into account for the raceday is transportation costs, as you will need to cover the price for the boxes that will take your horse to and from the racing on the day of the race.
Why Is It A Risky Venture?
Racehorse ownership is incredibly risky, and there is a lot to consider before making the decision to buy an equine star at the sales. The biggest positive for most is that it presents a great networking opportunity, as the ownership of a racehorse gives business owners an excellent opportunity to entertain their most esteemed clients.
However, it can be an extremely expensive and time-consuming venture. A lot of money will be spent by owners before their runner is even ready to compete on the track, and this can often be challenging to sustain given the unpredictable nature of business in the modern day.
It is also an incredibly risky business move, as there is no guarantee that you will win the money back that you have spent in prize money. If there was a science to finding champions in the field, then everybody would be making millions every year. However, despite having excellent depth with pedigrees, even the most finely tuned equine stars could flatter to deceive when it comes to their time to shine on the track.
However, racehorse ownership is all about getting what you wish to put in. For the most part, many fans of the sport are happy being involved in syndicates, which includes owning a smaller percentage of the runner, but at a cut fee with all the same ownership privileges on raceday.