With innovative programs targeted to help the “little guy” breeder, B. Wayne Hughes’ Spendthrift Farm in Lexington, Ky., has paved the way for small-scale operations to have access to some of the finest stallion blood in the Thoroughbred industry.
A scarcity of small breeders enjoying success at the top level of the industry sparked the creation of Spendthrift Farm’s Breed Secure and Share the Upside programs.
To minimize commercial breeders’ risk, Spendthrift Farm four years ago introduced its Breed Secure program, which allows breeders to delay payment of stud fees to eligible stallions.
Under the program, breeders don’t pay stud fees until the sale of the resulting foal as a weanling or yearling (breeders’ discretion) at public auction, and only if the sale is profitable. Once the foal is sold, Spendthrift receives the stud fee (breeder gets first $6,000 of proceeds for a weanling or $12,000 for a yearling). The breeder also retains all proceeds after stud fee is covered. Any shortcomings are forgiven.
Share the Upside provides breeders the ability to invest in the farm’s stallions on the ground floor. With a one-time deposit and two consecutive years of sending mares to an eligible stallion, breeders secure a lifetime breeding right without any recurring expenses (after a live foal is produced each year and stud fees are paid when resulting foals stand and nurse).
The breeder-friendly programs, now a cornerstone of Spendthrift Farm’s framework, are working at the highest levels.
Small breeder Jay Goodwin and his wife, Jana, owners of Good Win Farm near Paris, Ky, are enjoying success beyond their wildest dreams. Goodwin, a partner in Select Sales, says he sends about 30 mares a year to Spendthrift’s stallions.
“The programs are a big reason we breed at Spendthrift,” Goodwin said. “We’re not going to breed to horses that don’t fit our program or won’t be commercial because the market is just too competitive. But they have the product, and when we are on the fence between breeding to a stallion at Spendthrift or to a stallion at another farm, nine times out of 10 we will go to the Spendthrift stallion because of the programs.
“While the programs are important, you have to have commercial stallions first and foremost, or it doesn’t behoove us either way,” Goodwin added. “They stand quality stallions, and the programs they offer put them over the line compared to other stallion farms. I would say that 90% of our success over the last four years is because of Spendthrift’s programs. They have placed us in a position where we don’t have to put ourselves out there on the line to breed a horse. We are protected, and it allows us to be competitive with breeders that are bigger than we are. The programs they offer have leveled the playing field and have given us a chance that we never had before.”
Spendthrift Farm stallions Line of David, Warrior’s Reward, and Temple City all stood their first season at stud in 2011, and each was represented in this year’s Kentucky Derby (gr. I), as was former Spendthrift stallion Notional, who no longer stands at the farm.
Line of David (Lion Heart—Emma’s Dilemma, by Capote) was represented by Derby runner-up Firing Line; Notional (In Excess (Ire)-Truly Blessed, by French Deputy) by Far Right; Warrior’s Reward (Medaglia d’Oro—For All You Do, by Seeking the Gold) had Tencendur; and Temple City (Dynaformer—Curriculum, by Danzig) was represented in the Run for the Roses by Bolo.
Also represented in this year’s Derby by Danzig Moon was Spendthrift’s Malibu Moon, one of A.P. Indy’s most important sons and a perennial leading stallion. Sire of 2013 Kentucky Derby winner Orb, Malibu Moon was the only stallion to sire multiple Kentucky Derby and Preakness Stakes (gr. I) starters in 2015.
The success of Spendthrift’s up-and-coming young stallions is no surprise to Goodwin.
“I’m a Harlan’s Holiday guy,” Goodwin said. “When they got Into Mischief (Harlan’s Holiday—Leslie’s Lady, by Tricky Creek) that really caught my attention, especially because of the affordable fee they started him with. I was also a huge fan of Indian Charlie, and they brought in Notional. A breeder like me has to fall back on the sons of the horses I really like. That’s what initially got me out there, those two horses—Into Mischief and Notional.
“I have bred to just about every stallion over there on the Share the Upside program,” Goodwin continued. “I sold an Into Mischief when he hit. I had a Warrior’s Reward when he hit. I had a Temple City and sold it when he hit, and I had a Line of David and an Archarcharch that I sold when they hit.”
Spendthrift ‘s programs have made breeding to future leading stallions easily accessible, allowing for a greater shot at success across all sectors of the industry.
“As a breeder, you always have dreams of grandeur in the back of your mind. You pray that ‘if this horse hits he could be the next Harlan’s Holiday down the road, and I have a lifetime breeding right that’s just grown in value.’ That’s always the dream, but it’s usually buried so far in the back of your mind. In reality, you’re thinking ‘I want to breed to this stallion anyway, and then I’ll breed to him a second year and get another nice foal. If he hits, he hits.’
“All of a sudden, we had four hit. It’s just remarkable. I would never have dreamed it. It’s always a number’s game with us, so we felt if we could just get one to hit that it would be worth all of our investment. We got lucky, and a lot more than a few have hit. To be involved with Spendthrift and their top stallions is just incredible.”
Breed Secure and Share the Upside have given smaller scale breeders like Goodwin the opportunity to be competitive.
“It’s put our operation on another level,” he said. “I think I bred to Into Mischief twice at $7,500 and then sold my lifetime breeding right for $90,000. A lot of people have hung onto those lifetime breeding rights to Into Mischief, but others have cashed in. Into Mischief, for example, has gone up in price ($30,000) and breeders like me aren’t able to breed to him now, even though we’d like to. But with the program, people can breed to him as long as they’d like to with their breeding right.”
Goodwin notes that breeding mares at Spendthrift Farm, which is run by General Manager Ned Toffey and President Eric Gustavson, feels more like a partnership or a collaborative process than a typical business relationship.
“They are very open to input from breeders,” Goodwin acknowledged. “They listen and want to do what’s right by breeders. I’m a competitive guy, but Mr. Hughes is as competitive as any man I’ve met. He wants to win, and he wants the best. He made it a point to be the first farm to reach out to small breeders. They are changing the market. Stallion farms used to rule the world, but the pendulum is swinging toward the breeders, and Spendthrift was ahead of the curve.
“The first person I met at Spendthrift was Des Dempsey. And it’s gotten even stronger out there with the addition of Mark Toothaker,” Goodwin added. “The thing about what Mark brings to the table is that he was a small breeder. He gets the whole program. He has been there and needed to find a way to sell a horse to pay stud fees. He brings another level to the operation. Unless you have someone who has put himself, his family and his farm on the line, it’s hard for people who have worked only at big farms to get what small breeders and small farms have to go through. Mark brought that added knowledge to Spendthrift, and I believe it has catapulted the operation to the next level.”
While Goodwin’s good fortune and accomplishments in the auction ring in recent years are due to more than just being in the right place at the right time, his course was largely set because of Spendthrift Farm’s unconventional programs.
“If you would have told me 10 years ago that we would be breeding the type of horses we are breeding and how we are doing it, I wouldn’t have believed you,” Goodwin said.
In shaping new behaviors and empowering small breeders to hit the target more often, Spendthrift Farm’s game-changing efforts are having an enormous effect on the marketplace. For Goodwin and others like him, Breed Secure and Share the Upside have provided competitive advantages that are clearly transforming small breeders into top performers.