Are stallions getting too busy? The Jockey Club said yes. Now they’re being sued.
A rift has developed in Thoroughbred breeding industry that has some of the richest horse farms in Kentucky on different sides of the fence.
On one side: Breeders who say Thoroughbred genetic diversity is at risk. On the other: Breeders who say millions in lucrative stud fees and horse sales will be siphoned away to other farms. And Kentucky’s horse industry could hang in the balance.
Three major farms, including Ashford Stud where Triple Crown winners American Pharoah and Justify stand at stud, are suing The Jockey Club and top Kentucky Horse Racing Commission officials to block a new rule that would cap the number of mares any stallion could “cover” or mate with at 140.
The new rule wouldn’t impact existing stallions; only those born in 2020 or later.
Ashford, which is part of the global Irish bloodstock conglomerate Coolmore, along with Spendthrift Farm and Three Chimneys Farm, filed a lawsuit in federal court in Lexington on Tuesday alleging that the rule is an anti-competitive restraint on the market.
“The introduction of the Stallion Cap by The Jockey Club is a blatant abuse of power that is bad law, bad science and bad business,” said Spendthrift owner B. Wayne Hughes in a statement.
“A handful of individuals from a private club in New York have been allowed to make a decision that will negatively impact the future of Thoroughbred racing and breeding both in Kentucky and the whole country. ... 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 Jockey Club said in a statement late Tuesday that it “stands by the rule and its purpose, which is to preserve the health of the Thoroughbred breed for the long term.” .
The Kentucky Horse Racing Commission said in a statement that they are “aware of this lawsuit, and our legal team looks forward to addressing these issues in the litigation process. We have no additional comment at this time, due to the Kentucky Horse Racing Commission’s policy about not commenting on pending litigation.”
The lawsuit contends that the cap on a stallion’s book at 140 mares would drive up stud fees, squeeze out “less well-connected” mare owners and push their horses onto less desirable stallions.
Ultimately, the lawsuit says, it could cost Kentucky’s lucrative horse industry future top-tier stallions altogether: “Owners of the premier Thoroughbred stallions and stallion prospects will potentially move or sell their horses out of Kentucky to other countries whose Thoroughbred registries do not impose any Stallion Cap (every other country in the world besides the United States).”
The Jockey Club put the cap in place in May 2020, after a proposal was made the previous September. According to the private breed registry, the move was made to protect genetic diversity after a study found a rise in inbreeding due to larger book size.
According to The Jockey Club, a select number of stallions now breed to more than a fourth of all the mares. The registry’s annual statistics show that in 2020, 42 stallions were responsible for more than 7,300 of the foals expected to be born this year.
The busiest stallion in 2020 was Uncle Mo, who covered 257 mares at Ashford Stud in Versailles for $125,000 a pop. In fact, all but two of the hardest-working stallions live in Kentucky, which has dominated the breeding industry for decades.
While older stallions like Justify could still cover 222 mares as he did in 2020, newer ones could not, under the new rule. Many of them stand at the three farms that are suing.
Because The Jockey Club will not register more than 140 foals by any stallion, other offspring cannot run in Thoroughbred races or be bred and have no value on the market. Kentucky statutes, like all other states, mandate that Thoroughbreds must have Jockey Club registration to race as well.
The suit seeks to overturn authority to block non-registered horses from racing.
According to the lawsuit, several stewards who approved the new rule have a conflict of interest because they own racing and breeding operations “whose economic interests will be served by the Stallion Cap,” including Stone Street Farm, Cheyenne Stables, St. Elias Stables, Jump Sucker Stable, TIC Stables, Ocala Stud, Darby Dan Farm and Lane’s End Farm.
According to the Thoroughbred Daily News, at the time the new rule was announced the nine stewards were Barbara Banke, Michael O’Farrell Jr., Everett Dobson, C. Steven Duncker, Ian Highet, Stuart Janney, William Lear Jr., John Phillips, and Vinnie Viola.
The suit claims that the new rule “will substantially diminish the value of any stallion to which that rule applies, by limiting the number of stud fees that can be generated by such stallion on the open market.”
The plaintiffs are asking for treble damages against The Jockey Club, although it isn’t clear what that figure would be.
According to the lawsuit, more than $85 million in stud fees would have been impacted in 2019 if the rule had been in effect.
The suit alleges that there is no scientific basis for the cap, saying “excess demand will move on to the next most popular stallions who share similar genetics.”
The plaintiff farms are asking the court to find the cap “arbitrary and capricious” and permanently block The Jockey Club and the state from enforcing it.
This story was originally published February 23, 2021 at 1:54 PM.
