Those wild revolutionaries at the Jockey Club lobbed an incendiary device into last week’s news with the announcement that their board of stewards was considering a “rule to limit the annual breeding of individual stallions starting with the 2021 breeding season.”
In the final days leading up to the world’s largest yearling sale at Keeneland, the words on everyone’s tongues were “book limits,” “rising stud fees,” and “restraint of trade,” depending on the speaker’s view of the proposed rule. Not “let’s make a deal.”
The “book limit” under the proposed rule for stallions would be a cap on the total number of mares bred to individual stallions in North America at 140. This would be a significant restriction to a small number of stallions and a slight restriction to a few more. A press release from the Jockey Club noted “43 stallions reporting 140 or more mares” in their 2018 books, and those stallions accounted for nearly 30 percent of the mares covered.
The consideration of the proportion of mares being covered by a limited number of stallions was the primary reason of concern cited by the Jockey Club board of stewards in their announcement. It was felt that a “worrisome concentration of the gene pool” was not in the best interests of the breed, and therefore the Jockey Club had to make recommendations to correct the situation.
If the rule takes effect as stated, one of the predictions made by both stallion managers and by breeders is that stud fees will rise. As supplies decrease, prices rise.
This mitigates, perhaps even entirely erases, the loss of income that some farms might incur from the diminished number of mares covered. Cash income, however, is not the only consideration in some operations that rely on volume to improve the chances of producing a superior performer.
So, as with most economic considerations, some will gain more and some will gain less.
As stated in their proposal, the Jockey Club stewards “will continue to study the decreasing diversity of the Thoroughbred gene pool and its cause and potential effects over the course of time. As more data and analyses become available, the stewards may revise The Jockey Club’s approach to protecting the breed’s health and welfare.”
The Jockey Club could choose to continue on this course to limit book size of stallions or pursue another route. But of equal importance is that the Jockey Club can make the decision without needing to convince everyone in racing, or even in breeding.
I facetiously told a concerned stallion manager that the stewards needed to convince only the 20 chief investors in stallion equity in Kentucky. Actually, that might be more along the lines of the 200 primary investors, but it is a surprisingly modest number.
And if a consensus of stallion owners and investors decides these steps are in its overall best interests, I have no doubt they will pursue them, even if there are a modest number of dissenters.
Not least among the reasons for the pursuit of a goal such as this is that the Jockey Club is “dedicated to the improvement of Thoroughbred breeding and racing.” Among the other principles dear to many is the avoidance and mitigation of risk, and if there is anything riskier than breeding Thoroughbreds, perhaps it’s skydiving.
A corollary of this rule change would be the mitigation of risk.
As economist and writer Allison Schrager says in her recently published book An Economist Walks Into a Brothel, “Facing risk is the cost of getting what we want, and just like any cost, sometimes we can economize and get more for less” risk.
By limiting books, raising stud fees, and consequently reducing the number of yearlings available by the most popular sires, breeders and stallion owners would incidentally receive more money for those yearlings. At least, if the principles of free trade work, the fewer yearlings available by popular sire X, the higher the prices for them should be.
And, in doing the right thing for the breed, both breeders and the Jockey Club will have done themselves a favor as well.