Kentucky Horse Owners Challenge New Limit on Horse Breeding

The billionaire owner of 2020 Kentucky Derby winner Authentic is among a trio of breeders suing to block a new industry rule they say threatens a key source of profit in the business of raising thoroughbreds.

The rule enacted in May by the Jockey Club will cut into hundreds of millions of dollars in stud fees by effectively limiting the number of times high-quality thoroughbreds can mate, according to a lawsuit filed in a Kentucky federal court Tuesday by the breeders, including Authentic owner Spendthrift Farm, which is controlled by Public Storage founder B. Wayne Hughes Sr.

The Jockey Club said it will only register the progeny of the first 140 mares a stallion breeds with in a year, hoping to increase the diversity of the thoroughbred gene pool. But dozens of top stallions were mated more than that last year, data show. The breeders said the restriction will raise costs, prevent “less well-connected owners of mares” from access to quality stallions and force owners of top stallions and prospects to move to other countries.

Kentucky Horse Owners Challenge New Limit on Horse Breeding

“The stallion cap serves no legitimate purpose and has no scientific basis,” the breeders said. They claim it was “adopted to serve the economic interests of a discrete group of participants in the thoroughbred industry” while hurting owners of more popular horses by “artificially capping the bidding price at which top stallion prospects can be purchased.”

Those stallions can generate windfalls for their owners. Hughes, for instance, charges broodmare owners $225,000 for a mating session with his horse Into Mischief, one of the most successful studs in the industry today.

The 127-year-old Jockey Club, governed by a board of stewards who set standards for thoroughbred racing and breeding, defended its decision to impose the new limit for its North American registry.

“Because the rule applies only to stallions born in 2020 or later, any effect on future stud fees or breeding economics is speculative,” the New York-based organization said in a statement, adding that it considered public comments after the limits were first proposed in September 2019. “The Jockey Club stands by the rule and its purpose, which is to preserve the health of the Thoroughbred breed for the long term.”

In 2019, there were 43 stallions that bred with more than 140 mares, and last year, it was 42, according to the lawsuit. The breeders, which also include Coolmore America’s Ashford Stud, a farm that is home to the two living horse racing’s Triple Crown winners, and Three Chimneys Farm, say they have a number of stallions at their Kentucky operations that last year would have exceeded the new mating cap. They own four of the top five stallions by mares bred, according to the Jockey Club.

‘Economic Protectionism’

Breeders say the new rule has already reduced the value of weanlings they have acquired -- because the future productivity of the animals will be limited. It also will prevent thoroughbreds and their offspring from racing around the world if the Jockey Club refused to register them under the cap, because no registry in any other major jurisdiction would allow them to participate, according to the lawsuit.

The real intent of the rule is “economic protectionism” to benefit the owners of “less popular stallions,” the breeders said.

“We have filed this complaint to defend the industry from anti-competitive, un-American and arbitrary decision making that is not based on scientific evidence,” Hughes said in an emailed statement. “If they can limit the number to 140, what’s to stop them from limiting it to 100 or 80 or any other number down the road? What if your mare isn’t one of the 140? We are really concerned about the small breeder’s ability to survive this.”

The case is Spendthrift Stallions LLC v The Jockey Club, 21-cv-51, U.S. District Court, Eastern District of Kentucky (Lexington)

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