The Business of Leasing a Stallion

When it comes to leasing a stallion, Chris Blake knows a thing or two about the topic.

Blake, who runs Ascot Stud Farm in Port Colborne, ON, currently stands Town Prize. However, his venture into leasing stallions dates back to 2005, when he became curious about the breeding business. Part of a racing family at heart, Chris discussed the business with his brother, Mike, who trains and runs horses at both Fort Erie and Woodbine Racetrack.

“Mike had owned racehorses since 1999, and I think I was always more interested in the breeding side. I think we had a mare or two. Long story short, it pretty much led to me asking him what mares to breed to what studs. I remember having a copy of a stud issue at university, and every stud he kind of frowned upon — ‘Oh, not this one, not that one.’ I guess that turned on the spark. Well, why don’t I try to get a stallion? Obviously, it’s easier said than done,” said Chris, who started Ascot Stud Farm nearly two decades ago.

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Understanding that purchasing as well as standing a stallion can be an expensive endeavor, Chris took a creative approach as he tip-toed his way into leasing stallions.

“What if I could work out a deal to lease a stallion that I could never really afford and pretty much bring up an older stallion?”

Enter Tejano Run.

“He had already had some success, and I was able to work out a lease deal with Starlex Farm. That kind of planted the seed for what I’ve done for I don’t how many years,” said Chris, who stood Tejano Run from 2006 until around 2011.

Choosing A Stallion To Lease

A multiple graded stakes winner, Tejano Run was a runner-up to Thunder Gulch in the 1995 Kentucky Derby. He would go on to win several Grade 3 races in the U.S.

Aside from Tejano Run, Chris has leased and stood several older U.S. and European stallions, including Aljabr, Swain, and Impeachment. Chris explains his reasoning for selecting those specific stallions.

“It’s a fine balance between finding a stallion that is going out of popularity in their current market and still has the consistency in their foals and crop sizes that when you lease them they are still going to be able to push you through the next few years to have something to advertise with. So, it’s a balance with finding something that has dropped out of favour in Kentucky, or in Florida, but still has enough upswing to move to a regional market.”

(Left) Town Cruise winning the Ricoh Woodbine Mile. (Michael Burns photo)

This year, Chris is leasing and standing Town Prize. The 13-year-old chestnut horse is a son of Speightstown. A sprinting champ and well-established sire in the U.S., Speightstown currently stands for $90,000 at WinStar Farm in Kentucky. His son, Town Prize, secured several wins at Woodbine, including the 2012 Woodstock Stakes, while posting a 107 Beyer figure over the six-furlong venture.

“Town Prize had a short career, but he was never worse than third, and he only ran in stakes and allowance company. He had an impressive enough race record, his foals were running well, and he had a strong enough pedigree, so it was kind of too good to be true for what I was doing.”

Chris stumbled upon Town Prize through Vera Simpson, who mentioned the horse was being boarded at Curraghmore Farm. Simpson put Chris in touch with William (Bill) Sorokolit Sr., who owns the horse, and Chris began standing the chestnut horse at Ascot Stud in March 2021.

Although Chris is now a seasoned breeder in the game, he could not have predicted the breakout year the sire would have when he initially decided to lease the horse. “Town Prize was just an anomaly, where he fell out of favour because pretty much every horse when the slots were pulled, books were slashed (i.e. mares booked to the studs) and he unfortunately just fell under the radar, and you look at last year, Town Cruise made $10,000 and this year he makes $900,000, so it’s just one of those things,” said Chris.

No doubt, Town Prize has gained momentum over the last year for two of his successful progeny, including Town Cruise. Produced by a mare named Candy Cruise, Town Cruise secured this year’s Grade 1 Ricoh Woodbine Mile, posted a runner-up finish in the Gr. 2 King Edward Stakes and clinched two allowance races at Woodbine. The 7-year-old chestnut gelding is trained and owned by Brandon Greer. Greer and his father, Terrance, bred Candy Cruise to Town Prize when Sherry McLean was standing the chestnut horse at Paradox Farms.

Brandon said he is very happy to hear Town Prize is back standing at stud. “We would very much like to send the mother back, Candy Cruise. Now that we know where he is we would like to give it another shot with her and perhaps another one,” he said.

Meanwhile, Artful Ballerina, a 3-year-old bay filly out of Artful Dancer, secured top honours in the 2021 Georgian Bay Stakes. In her other three ventures at Woodbine, the daughter of Town Prize has boasted runner-up finishes.

It’s probably fair to say this specific lease has turned into somewhat of a prized opportunity for Chris.

“It turned into finding something from where it was just a serviceable horse that I was content and excited about breeding my mares and any other mares to and now to a horse that’s thrown a Grade 1 winner. I don’t know the statistics, but I know Tejano Run produced a Grade 1 winner and Swain had produced one before I leased him, but how many stallions that stay in Ontario and breed to Ontario mares have produced Grade 1 winners, I don’t know if it’s three or five.”

It’s a good question. To date, stallions based in Ontario that have produced Grade 1 winners include: Silent Name, whose son Silent Poet captured this year’s 2022 Highlander Stakes. Point of Entry is based in Ontario, but his Grade 1 winner Point Me By, who won the Bruce D Stakes at Arlington, is a Kentucky-bred. Society’s Chairman has produced several Grade 3 winners, including Caren (Ontario bred) and Code Warrior (Florida bred). Meanwhile, other Ontario-based sires such as Souper Speedy, Frac Daddy and Old Forester have produced graded stakes progeny.

While this is not an exhaustive list of the current stallion roster, Town Prize has found himself in a unique position producing Grade 1 offspring in the province’s current breeding market.

Straight Lease or Performance-Incentive Lease?

Whether in Ontario, south of the border, or across the pond, not every stallion stands for the same fee. As younger horses with stacked resumes enter the market, the older stallions begin to fade from the spotlight, and their stud fees become subject to a price reduction.

In turn, the lease price ultimately varies from one stallion to another. The type of lease may depend on what the owner is looking for, whether it be for short-term profit or the possibility of a long-term return of investment.

“With Impeachment it was in the thousands, and I negotiated whatever they wanted. With that lease it was a yearly cash amount, and I kept 100 per cent of the stud fees. Whereas the other farms I’ve leased the horse, but they are not leasing them on a lump sum upfront, it was more of a proceeds of stud fees lease,” Chris said.

A stallion lease is not as cut and dried as a vehicle, condo, or house payment which involves a bi-monthly fee, monthly, or yearly fee. If a stallion’s progeny is successful at the track, each party involved in the breeding process is eligible for breeders awards. In contrast to Impeachment, Chris acknowledges his other leases have followed a varied business structure.

“The other leases are not looking to just get back the cash out of the lease, and all the responsibility for everything is thrown on me,” Chris said. “The better (the stallions) perform in the breeding shed with the mares, it benefits both parties. I think most farms were pretty open to those.”

Costs Associated With Leasing a Stallion

Leasing and standing several stallions for nearly two decades, Chris is very familiar with the general business landscape involved in a lease. “It’s pretty generic. You pretty much want to cover all the aspects of standing a stallion and make it clear who is responsible for what as far as daily care, veterinary care, advertisements, nominations (i.e. registration fees), proceeds of breeders and stallions awards and stud fees and that pretty much encompasses everything. Like anything, the clearer the terms are, the less confusion down the road for both parties.”

While Impeachment was a straight lease, Chris notes that for Tejano Run, Aljabr and Swain, the leases were a bit different. “What I was doing with them is I covered all the advertisements, program nominations, we split the stud fees.”

Clarity is key in a leasing contract, as Chris found out firsthand when he leased Tejano Run.

“Tejano Run, I had to pay liability insurance. They had him ensured for half a million dollars. I remember when he crossed the border, they wanted me to pay the taxes on that, and I had to produce the contract to show that I didn’t buy the horse for $500,000; he was insured for $500,000,” said Chris, laughing.

Leased stallions don’t magically appear at the farm once the lease is signed. They must be shipped and that cost falls either on the stallion owner or leaser. “For instance, I covered the shipping for Tejano Run and Town Prize.”

In other leases, that cost has not fallen upon Chris.

“Shadwell paid to ship the (Aljabr) up and sent a groom up. And then when the horse was retired, I would drive back, and they would fly me home. They operated on a whole different scale.”

Town Cruise’s victory in the 2021 Woodbine Ricoh Mile (Grade 1, jockey Daisuke Fukumoto) has instantly given a boost to his sire Town Prize. (Michael Burns photo)

Deciding a Stud Fee During the Lease

Every stallion brings something different to the market, and the price of the stud fee reflects that. In Chris’ case, he also had to consider a stallion’s move from the U.S. to Canadian market.

“I think it was pretty much just placing them in the market when you are relocating a stallion from Kentucky. It was more about pricing them competitively and fitting in the regional market. Tejano Run was $5,000, and Impeachment was $2,000, but Impeachment wasn’t as nearly as accomplished on the track or as a sire.”

As it relates to Town Prize, Chris originally offered a complimentary season with a split of breeder’s awards. “For Town Prize what we’re doing is a complimentary season, and Ascot Stud will be named 25 per cent breeder, Bill Sorokolit Jr. 25 per cent, and then the mare’s breeder is considered 50 per cent. So if the foal goes out, runs, and wins instead of a stud fee, you get part of the breeders’ awards.”

Now that several of Town Prizes’ progeny have gained traction in the racing world, Chris has installed a stud fee of $2,500. Otherwise, an individual can pursue the alternate avenue of a complimentary season with the long-term investment of splitting breeder’s awards.

Stallion Registration

When you hear the word lease, you probably think of the paperwork that is inherently attached to signing a lease for a car, a condo, and even a horse. Across Canada, one essential element of that paperwork involves registering a stallion.

In Alberta, a stallion bonus is paid proportionately to stallion owners whose stallions have eligible Alberta thoroughbred progeny with earnings of $10,000 or greater during the calendar year. Stallions must have stood in the province of Alberta for the entire calendar year of conception for each year’s crop to be eligible.

Horse Racing Alberta’s (HRA) Stallion Owners’ Breeding support for 2021 totalled $65,000.

In British Columbia, when a BC-bred offspring of a BC stallion finishes first, second or third in any race other than a claiming or starter allowance/handicap race, the owner of the stallion at the time of service will receive an award. In the case of optional claiming allowance races with a listed claiming price of $25,000 or more, the BC-bred offspring must not be entered for the claiming price to be eligible for an award.

Manitoba also provides awards to stallion owners and some other recent changes to the province’s breed development programs has contributed to a surge of interest in both breeding and owning a homebred in Manitoba. There are seven stallions now stand in Manitoba.

In 2021, age restrictions were removed from the Manitoba incentive program and purse supplements are now paid out to Manitoba-bred racehorses for the lifetime of their racing careers.

Brand new for 2022 is a one-time bonus of $2,000 for any Manitoba-bred 2-year-old upon winning their first race regardless of class and conditions.

The Ontario Sires program is part of Ontario Racing’s Thoroughbred Improvement program. The Thoroughbred Improvement program (TIP) is an element of the Ontario Horse Improvement Program, which offers several incentives and awards for horsepeople working in the province’s racing and breeding industry in hopes of increasing the quality and value of Ontario bred racehorses.

Registering a horse as an Ontario sire is an investment to the stallion owner, the lessee, as well as anyone breeding their mare to that stallion. Once a stallion is registered, the owner will be eligible to receive stallion awards. Moreover, any foal that is produced by that sire will have the Ontario sired status, and their owner (i.e., breeder) will be eligible to receive benefits as it relates to the Ontario Sire Heritage Series, Ontario Sires Stakes as well as any overnight restricted racing programs.

Registration for the Ontario Sires program involves a fee, a signed lease declaration as well as a copy of the lease. Stallions must be registered every year to be part of the program. If they were registered this year and intend to stand again in 2022 they must again be re-enrolled in the program. In terms of eligibility the stallion must stand the entire season in the province.

As Chris knows, Town Prize and his owner will benefit from the program as a result of his progeny, Town Cruise’s success at Woodbine this year. “In Ontario, if you win stakes or allowances, you get points, and at the end of the year, they divide up the points, and according to your points then you’re allotted your money. For instance, Town Cruise, because he had the Grade 1 win, a Grade 2 placing and the allowance win Bill Sorokolit is going to a get a lot of money on stallion awards. With our lease, I am getting stallion awards for foals from last year.”

Upcoming Breeding Season

Chris will be standing Town Prize in 2022 and admits there has been an increased interest in the horse since Town Cruise began to win big at Woodbine.

“When he won, there were different people from Toronto trainers that had contacted me. So there was definitely more interest. His book is probably going from under 10 to hopefully he can get 20, or maybe more. It’s being conservative, but also being realistic about the market.”

Timeline-wise, the next breeding season will start in mid- February, 2022.

“February 14, Valentine’s Day is the official date that breeding opens to be on the safe side. Usually, the end of May, June you start tailing off. It also depends on how busy the stud has been. If they have been breeding hard all season then they may need a break, but with low numbers you breed pretty much into May. Then you get the odd person that has an older mare or a mare that is tough to catch, and they may want to breed into June and know they are going to have a late foal.”

Understanding the ebb and flow of the breeding business in the province, Chris is just taking it one day at a time. Meanwhile, the talk of the town, a prized handsome chestnut stud continues to enjoy his life as a lessee at the cozy abode of Ascot Stud.