There is a joke frequently told in racing circles that runs along the lines of "How do you become a millionaire owner in racing? Start out as a billionaire."
For all but a very few mega owner-breeders—whose aim is to create stallion prospects and for whom this is very much a business—having one or more horses in training is a leisure pursuit, something to take the mind away from the day-to-day concerns of work, health, and family. As such, there is a line of thinking that you should not really expect a return on your leisure investments any more than if you take up golf or sailing, or hill walking.
But the reality is that racing is a professional sport that supports a whole industry and has prize money to match, most of which goes to the owner. It has evolved from the days of sweepstakes and match races and has to offer that carrot in order for a sufficient number of owners to invest in horses.
So how much does it cost to own a horse, and can you make money from it?
Getting to the Start
A 2016 survey of the Racehorse Owners Association's members found that the average cost of ownership for a year was £22,595 (US$27,695) for a flat horse, composed of training fees—which can vary widely—racing expenses such as entries, transport, and jockeys, as well as farriers' and vets' bills, and the cost of access to gallops.
That dropped to £16,325 ($20,009) over jumps, a figure explained partly by the increased costs involved in running more frequently on the flat as well as the daily rate charged by jumps trainers tending to be lower, although there is expectation of higher vets' bills with jumps horses.
The other chief cost associated with getting into ownership is the purchase price of the horse.
There are many types of auctions. To buy a horse ready to run immediately, a horses-in-training sale offers the shortest time lag, especially in jump racing, where the alternative is to buy a young or store horse who may be at least two years away from facing the starter.
The average price paid at the Goffs UK Premier Yearling sale at Doncaster in August 2022 was £44,043 ($53,984), while the five-year average generated at the 2-year-old breeze-up sale organized by the same company every April is £45,610 ($55,905).
A breeze-up sale (sometimes called a "ready to run" sale in the U.S. and Australia) is populated with horses who are theoretically much closer to making their debuts than those contained in a yearling sale the previous summer or autumn, while the new owner will have saved as much as seven months of training fees.
Should those sums sound a little scary, the average price during the yearling section at the same company's less select October sale in 2022 was £6,822 ($8,361).
The costs also vary hugely with other companies such as Newmarket-based Tattersalls (where the currency bid in is the guineas) between their ultra-select Book 1 offering—298,752 guineas ($384,496) was the average price per horse sold in 2022—and the less flashy pedigrees in Book 4 (6,019 guineas, $7,746).
And fairy tales do happen. Just ask Blandford Bloodstock's Tom Goff, one of the most respected agents in Britain, who says: "I bought Dutch Art as a $29,506 yearling in 2005 and he won the Norfolk Stakes (G2) at Ascot, the Darley Prix Morny (G1), and the Shadwell Middle Park Stakes (G1) before being sold to Cheveley Park Stud for millions of pounds.
"Everybody connected to that horse made serious money because the dam, Halland Park Lass, was bought for nothing and then sold in the ring for 710,000 guineas ($1,455,216). I bought a sister to him by Kyllachy for 480,000 guineas ($1,025,892) two years later. Anyone who touched that horse made money. That's the fairy tale."
An Owner Opens His Books
The COVID-19 crisis made a severe dent in the already fragile state of British prize money in 2020 and again—although to a lesser extent—in 2021, as the sport attempted to offset first the loss of racing and then the economics of carrying on behind closed doors.
One medium-sized flat owner based in the south of England had 12 horses carry his colors in 2019 for a total of 100 starts, yielding 15 victories and total prize money of just over £150,000 ($183,858). Around one-fifth of that total came from winning a valuable handicap on a group 1 undercard last summer.
Of the runners he fielded in 2019, the most expensive purchase at auction was for 120,000gns ($154,441) and the least expensive was 30,000gns ($38,610).
Even ignoring subsequent training and racing expenses, of the 11 horses to represent the owner in 2019 bought at public auction, only three had won more than their purchase price by the end of that year.
Fast forward to 2021 and things had barely improved, although the owner had begun to invest in his own small breeding program, meaning that two of the six horses that ran solely in his own name were not bought at auction.
He had also returned to a similar scale of operations as was the case before 2019, with those six horses producing seven wins from 54 runs for prize money of £67,273 ($82,457).
The same horse that flew the flag in 2019 won another decent handicap, a success that pushed him notionally into the black compared to his purchase price.
But the other three horses acquired at the yearling or breeze-up sales—as well as another raced in partnership having been bought as a horse in training—were yet to get close to recouping that original layout.
Of the two homebreds to race in 2021, one has now accrued more than the covering fee of the stallion visited back in 2016, though the costs associated with the horse's rearing will have easily wiped that out and more.
Our man says: "It is easy to get carried away until the bills keep coming in, while generally the income is small due to the class of races you are involved in."
The ROA and other horsemen can certainly point to the poor levels of prize money on offer to British-based owners in comparison to those in Ireland, while the gulf with France, Hong Kong, Japan, Australia, and the United States is wider still.
British Horseracing Authority statistics spell out what the average prize money is across different types of races.
In 2021 the average purse per race on the flat was £14,370 ($17,613). Remember that is win and place prize money, with just over 50% going to the first horse home.
That mean figure of just below £15,000 ($18,385) also takes into account races such as the Derby, King George, and the Champion Stakes at the top of the tree. The median prize fund on the flat in 2021 was £7,250 ($8,886).
Over jumps the mean or average was £12,372 ($15,164), while the median is £7,500 ($9,192). If your jumper graduates successfully from hurdles to chasing, the rewards can be a little greater, with the median race over fences worth nearly £700 ($858) more.
Selling Your Prize Asset
Faced with the sort of economics demonstrated by the owner above, a big offer for a horse can be a real lifeline.
On the flat, the expansion in demand from jurisdictions such as Hong Kong, Dubai, the U.S., and Australia has become a vital factor in the ability of many owners to continue in the sport.
Hong Kong boasts owners with extremely deep pockets, and a horse who ticks most of the boxes for a continued career at Happy Valley and Sha Tin can easily command up to £500,000 ($612,860), while horses changing hands for seven figures are not uncommon.
It's a similar story over jumps, where the chances of a genuine Champion Hurdle or Gold Cup contender remaining in the hands of a small owner are remote, and the market for barely proven point-to-point horses is booming.
Even in France, where average prize-money levels are much higher for comparable races over jumps than in Britain or Ireland, only a relatively small number of big owner-breeders can afford to consistently turn down offers from abroad.
Racing For Passion, Not Profit
If further proof were required that most racehorses will be a losing investment, below is the raw data provided by the ROA, showing the inverted pyramid of how much the British horse population won at the races in 2018.
The most startling number is that only one in eight will make more than £15,000 ($18,385) and therefore approach breaking even.
Our mystery owner's flagbearer, who has twice come up trumps in a handicap on a major card, was in the top 5% of money winners in Britain in both 2019 and 2021.
The good days help to pay the bills but, more than anything, it is the experience such a win provides and the memory of it burning long afterward that helps make the inevitable losses easier to bear, the thrill and enjoyment outweighing simple economics.
Goff says: "There will always be people who don't mind the cost of having a horse in training, they're in it because they have a genuine passion for the sport. Fifty years ago this wasn't an industry and it has become one, but people have always raced for passion."
