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HANDICAPPING INSIGHTS JUNE 29, 2007 by Dick Powell INVASOR's (Arg) (Candy Stripes) sudden retirement this week really hit hard. Here was a horse that had won 11 of 12 starts and was well on his way to another Horse of the Year title before coming out of a workout last weekend with a career-ending injury. As much admiration as I had for him, I was always one step behind in acknowledging how good he was. He beat me in last year's Breeders' Cup Classic (G1) when he ran by Bernardini in the final yards, and he beat me in this year's Dubai World Cup (G1) when he trounced the previously undefeated Discreet Cat. Every once in a while a horse or jockey comes along that I just can't time. When I go against them they beat me, and when I go with them they get beat. Believe it or not, Julien Leparoux and I just can't seem to get it together. If I have the lead in the stretch, the horse rallying on the outside about to go by me is usually ridden by Leparoux. One reason for my late arrival on the Invasor bandwagon was his loss -- which turned out to be his only loss -- in last year's UAE Derby (UAE-G2). He came to Dubai undefeated in five starts in South America, but was soundly beaten by Discreet Cat. Even when he raced in America for the rest of the year, posting four wins in four Grade 1 stakes, I was never convinced of his greatness. But the fact is, his triumphs in the Classic, this year's Donn H. (G1) when he overcame all sorts of trouble and a tour-de-force win in the Dubai World Cup put him in select company. How good was he? All I know if you were going to run against him at 10 furlongs, you better have your running shoes on. His cruising speed and late energy were fantastic and racing is going to miss him. Give lots of credit to Sheikh Hamdan bin Rashid al Maktoum for racing him this year. Invasor's injury shows how risky our sport is and why many horses are retired early. Besides Invasor, multiple Grade 1 winner SCAT DADDY (Johannesburg) was retired this week with an injury that would have essentially cost him the rest of his three-year-old campaign. We've heard it many times about why can't these horses be kept in training and how great it would be for the sport if they were. But if you think horses are retiring prematurely now, you ain't seen nothing yet. The two biggest stallion operations in the world are Coolmore and the Maktoums. Therefore, it is no coincidence that when well-bred colts are up for sale at auction, they bid against each other. Here's why and here's why it will probably get worse. A horse like Scat Daddy will probably stand next year in Kentucky at Coolmore's Ashford Stud. Based on wins in the Champagne S. (G1) at two, this year's Florida Derby (G1) and a solid pedigree, he should be able to stand at stud for $30,000 live foal. Coolmore manages stallions in an aggressive manner that enables them to breed to huge numbers of mares. They are always willing to do deals with broodmare owners so that their top stallions are often bred to more than 150 mares each season. For someone like Scat Daddy, 150 mares next year will mean about 100 live foals. Multiply the number of live foals (100) by the stud fee ($30,000) and Coolmore is looking at $3 million annually in stud fees for the first few years of Scat Daddy's stallion career. If Scat Daddy succeeds at stud, the fee will be increased and the $3 million will grow each season. So why doesn't Scat Daddy's owners let him recover from his injury and race next year? It's purely risk and reward. The risk is that he gets hurt on the track and can't breed. The risk is that he races next year and doesn't do well so his value as a stallion goes down. Based on a projected $30,000 stud fee, his book value is probably around $8 or $10 million. If his owners decided to race him next year, his mortality insurance alone would be more than $500,000 (usually around 6 percent of the value of the horse who is still racing). So even if Scat Daddy were to win a $1 million race, he would only be covering his insurance premium. He would need to have a tremendous year on the racetrack to equal the $3 million he could earn in the breeding shed. And the risk is always there. But, here's why Scat Daddy's retirement and arrival at stud next year makes even more economic sense. Coolmore and the Maktoums have pioneered the shuttling of stallions to the Southern Hemisphere in the past decade. Even some of their top stallions -- such as Bernardini, Henny Hughes, Fusaichi Pegasus and Tale of the Cat -- will stand a season in North America and then ship down to Australia, most likely in July for the Southern Hemisphere breeding season. Thus, the revenues from standing stallions at stud can almost double in a given year. Stud fees are a bit lower, but the breeding industry is thriving in Australia and New Zealand and precocious sires are in great demand since many of their big-money stakes are for juveniles. It's entirely possible that Scat Daddy will earn close to $5 million next year in his first season at stud for Coolmore if he tests well for fertility and interest in the opposite sex. You think breeding to more than 250 mares is easy? When you consider how many horses do not make it to the races, or those that run and do poorly, can you blame any owner for taking the reward and avoiding the risk? And for American breeders, as much as they might want to race their male horses longer, they are often forced to sell or syndicate because the Internal Revenue Service (IRS) has a rule that you have to make money two years out of every seven or else you could be declared a hobby and not a viable business that is entitled to write off expenses. You don't want that. So Invasor is gone from racing and will take up stud duties somewhere for the Maktoums. Scat Daddy will be managed by Coolmore, and both figure to earn a ton of money even before their first foals ever make it to the races. And, there will be more. There always are, and with shuttling to the Southern Hemisphere now as common as huge books of broodmares, the economics of breeding cannot be superseded.
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