Structure of the Keeneland Tweaks Commission – BloodHorse

For the first time in thirty years, Keeneland fine-tuned the commission structure for all of its auctions.

Starting with the two-week-old yearling sale in September, the selling company will charge a minimum commission of $ 500, a move that will make it more expensive for breeders who sell with the Lexington Company.

Keeneland charges an entry fee of $ 1,000 for each horse entered in a sale. Previously, however, this fee was applied to Keeneland’s standard 5% commission for any horse selling up to $ 20,000.

With the new minimum commission, it will cost $ 500 more to sell each horse than before at Keeneland, according to Keeneland vice president of racing and sales Bob Elliston.

Elliston said the organization had the lowest commission structure among major North American sales companies priced at $ 20,000 and above before the latest adjustment. Keeneland reduced his commission to 4.5% in 2001 and increased it to 5% in 2011, saving ranchers more than $ 28.8 million during that time, according to the sales company.

Sign up for

“I think that puts us on a level playing field with other sales companies,” Elliston said. “As you might expect, this is a rare situation where a company has not changed their prices for over 30 years. really didn’t deserve to be the low cost supplier because we think it’s a great experience and it helps us pay for our reps to be all over the world attracting buyers to us. “

The commission rate adjustment is the second major change announced by Keeneland for the September 11-23 sale.

Earlier, Keeneland announced that he was creating a bonus program for yearlings sold during Book 1, which has been reformatted to be a nighttime session limited to around 200-250 of the top horses in the sale.

Keeneland said he will award a cash bonus to any Book 1 September Yearling Sale graduate who wins a Rank / Group 1 bet anywhere in the world. The bonus will be shared between the seller and the buyer. Lexington’s sales company will commit $ 750,000 to the first-year rewards pool, which will apply to this year’s Book 1 graduates and be offered to top-tier winners during their 2 and 3 year campaigns. .

Elliston said the Book 1 bonus program is funded by the combined resources of Keeneland and the new commission change is unrelated.

“These are two completely separate things,” Elliston said. “What you need to look at is what it costs to sell a horse across the board and when you haven’t changed your price in our 30 years we all know our cost level has The second thing is to reward those who compete at the highest level and that comes from all the strengths of Keeneland. We think something we should do is to inspire these people and excite these people who play at the most. high level, with the bonus program. This is from the Keeneland product and not from the change in our commission structure. “

Reiley McDonald of Eaton Sales has said he supports the Book 1 bonus program and it makes sense for Keeneland to revamp their commission structure at this time.

“Keeneland hasn’t had a rate hike for many years, so from a business perspective it made sense, and there is now a need to fund the new Book 1 bonus program,” he said. ‘sender. “Unfortunately, part of this falls on the smaller breeders who are raising horses in the zero to $ 20,000 range and will have to pay more than 5% commission.”

Peter O’Callaghan of Woods Edge Farm said the commission restructuring would be more acceptable if the percentage charged on redemptions was lowered or if the Book 1 bonus program was spread over more prizes.

“The bonus program is a great idea, but it comes at a cost,” said O’Callaghan. “I thought for a long time that they should have had a bonus program, but I’m certainly not in favor of it being just for volume 1. It seems they are taking poor Peter to pay rich Paul.”

O’Callaghan said he would also like a higher percentage of the bonus money to go to the buyer rather than the proposed 60-40% split between seller and buyer.

“Nobody likes it, and I wish it didn’t happen because it costs you more to sell horses,” said Mark Taylor, sales manager for his family’s Taylor Made sales agency. “We think of our customers because a lot of breeders are not making a profit and it’s harder than ever. But that’s not surprising; everything else has gone up in price and I’m sure the cost of Keeneland to organize the show rose mounted too.

“Keeneland puts on a hell of a show, and they do everything first class and it’s a non-profit organization that gives all the money back to the community or for their groceries. It’s unfortunate but it’s just a part of life. “

Editor’s Note: A previous version of this story had a different description of horses sold that would be subject to minimum commission.


Source link

Romona L. Lopez

Leave a Reply

Your email address will not be published. Required fields are marked *