Lifetime Breeding Rights

The 2011 breeding season in North America has officially drawn to a close. The BloodHorse.com posted an article on Tuesday with commentary from several major Thoroughbred stud farms about how they fared during the 2011 breeding season. Some stallion farms did better in 2011 than in 2010 (primarily those where proven sires stood in 2011). Overall, stallion farms found that breeders were strapped for cash in 2011, reducing the overall number of mares kept for breeding and the budgets for stud fees. Breeders were also more selective in 2011. They chose proven sires over young stallions, and fled with their mares when veteran stallions’ progeny did not perform as expected. 

Many stallion farms ran promotions in 2011 to attract mare owners. Promotions were especially popular for new, unproven sires. Promotions ranged in type and complexity, for example:

  • Reduced stud fees across the board
  • Free breedings to freshman sires
  • Multiple mare discounts
  • Special individualized packages for long-time customers; and
  • Lifetime breeding rights programs

Lifetime Breeding RightsSpendthrift Farm near Lexington is one example of a stallion farm that offered lifetime breeding rights in its 2011 breeding packages. Spendthrift calls their lifetime breeding rights package the “Share the Upside Program.” These packages are designed to promote new studs and provide them with larger books of mares early in their careers. 

How the Spendthrift program works: The breeder puts down a deposit on a young stud, and agrees to breed a mare to the stallion during his first and second years at stud. The mare owner pays a stud fee when each resulting foal stands and nurses. After the two foals are born and the mare owner pays both stud fees, the stud farm grants the breeder a lifetime breeding right in the stallion. Usually, the number of contracts is limited so that the stallion owner can maintain a 50% interest in each young stallion.

Tips for Stallion Farms: Make sure the terms of all special stallion promotions are in writing and signed by the breeders. If the stud fees are not due until the foal stands and nurses, be sure to retain a security interest (in writing) in the mare, the foal, and/or the breeder’s certificate. Be mindful of the fact that granting lifetime breeding rights may hinder your ability to later sell the stallion as a whole. The issue of what happens if you want to sell the stallion as a whole needs to be addressed in a contract between you and those who purchase lifetime breeding rights. 

How did your 2011 breeding season go? Please post comments and share what worked for you, and what didn’t.

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