Although Horse of the Year Mineshaft (by Horse of the Year A.P. Indy) had a good weekend with Grade 2 Gotham Stakes winner J Boys Echo, Mineshaft’s son Dialed In had a great weekend. The Darby Dan Farm stallion fielded a pair of stakes winners from his first crop of 3-year-olds, led by G2 Fountain of Youth winner Gunnevera, who was a multiple stakes winner at 2 and had been a good-looking second in the Holy Bull Stakes last month at Gulfstream Park.
Then on the evening of March 4, Dialed In’s son It’s Your Nickel won the John Battaglia Memorial at Turfway Park, and the previous weekend on Feb. 25, the sire’s daughter Attiya ran second in the Melody of Colors Stakes, also at Gulfstream.
In addition to Gunnevera, Dialed In had two previous stakes winners, including Ms Locust Point, who won the Gin Talking Stakes at Laurel on the last day of 2016 to clinch the freshman sire title for her sire. Dialed In led the year-end freshman sire list by total earnings of $1,544,836, with Belmont Stakes winner Union Rags (Dixie Union) in second with $1,457,070. The 2011 champion 2-year-old colt Hansen (Tapit) and unbeaten McLean’s Music (Distorted Humor) led all freshmen by number of winners (20), and Hansen’s son En Hanse was second in the Battaglia to It’s Your Nickel.
As one might expect, Dialed In has become one of the most popular young stallions in the world with his freshman title and continuing 2017 successes.
Darby Dan owner John Phillips said that Dialed In’s book is “as full as we feel comfortable with; so we’re not adding any more mares.” That means there are no seasons available from the farm at the advertised price of $15,000 live foal.
But what do market-conscious breeders do when there are no seasons available to the year’s hottest young sire? Due to that demand, Phillips noted, “There is a lot of activity trading seasons among those breeders who committed earlier. In some cases, they can trade up to another stallion [for instance, with someone who has a different stallion season available] or make a little money by selling their 2017 season.”
This commerce is “mostly activity among shareholders and breeding right holders,” Phillips said, because Darby Dan was one of the farms quickest to use the “share the upside” stallion investment scheme created by Spendthrift Farm owner B. Wayne Hughes, whose Into Mischief (Harlan’s Holiday) was initially offered in this manner and has been a major success.
The concept of the share the upside program is that a breeder pays a stud fee for breeding a foal by a new stallion prospect, typically for two years, and then owns a breeding right in the animal for the rest of his stud career.
Spendthift’s Ned Toffey said, “John Phillips called me when he was considering using this approach with some of the Darby Dan stallions and asked if it was all right to use our concept and call it the same thing. Mr. Hughes not only said it was absolutely fine but also said, ‘Why would you call it anything else?’”
In the case of Dialed In, Darby Dan used a hybrid approach that included traditional shareholders, as well as breeding right holders in the Spendthrift model.
Phillips said, “It’s a fairly large group of 80 people and a diversified group of breeders, largely designed by Doug Cauthen, who’s been instrumental in this. The shareholders hold an equity position in the horse, can vote, and can make decisions when called upon. Breeding right owners do not have pool interest or voting power, and that’s the distinction.”
One of the rationales behind using breeding rights in stallion management is to incentivize breeders to use the horse in his third and fourth years at stud, when commercial involvement tends to decrease dramatically.
When Cauthen bought Dialed In as a stallion prospect for his clients Bill Casner, Dixiana Farm, and Siena Farm, with owner Robert LaPenta retaining equity in the horse, Cauthen helped Darby Dan structure the resulting blend of shareholders and breeding right holders that have kept Dialed In busy at stud. Phillips said, “Doug deserves a lot of credit for putting the arrangement together, and we couldn’t be happier with the result.”
Darby Dan’s Ryan Norton noted the program has worked well for Dialed In. He had 91 third-season mares in 2015, resulting in 54 currently reported foals last year, and the stallion covered 105 mares from his fourth book in 2016, which are being born this spring.
Due to the current successes of the Dialed In offspring, those foals and yearlings are going to be in demand and selling for a premium because “It’s not just one horse that’s driving this,” Phillips said. “Also, Dialed In does stamp them: he is attractive, and he gets attractive horses. That means they will be well-received at the commercial markets, and that suggests to me a real upside for all those who bought shares and breeding rights.”
And what would happen if Gunnevera or another son of Dialed In should find himself wearing roses later this spring? The prospects truly boggle the mind.