Want to own a million dollar racehorse? It could happen – through syndication.
Ocala is horse country. Drive past some of the stately horse farms dotting the local landscape, and it might seem that thoroughbred horse ownership is reserved for the rich, famous and experienced, but that’s not quite true. Horse syndication provides virtually anyone the chance to be part owner of a possible Triple Crown winner.
A horse syndicate allows a group of people to jointly purchase fractional interests or shares in the ownership or breeding of a horse. It can be dauntingly expensive for one person to purchase and maintain a thoroughbred horse; syndication allows that expense to be spread out among many people, thereby lightening the financial load of all involved.
“Horse syndicates can take several forms,” says Brent Furnung, owner of Journeyman Stud Farm and president of the Florida Thoroughbred Breeders’ and Owners’ Association (FTBOA). “The most common and one of the oldest forms is that of syndicating a thoroughbred stud stallion. This is usually for professionals, persons who own one or more broodmares. Each syndicate member purchases an interest in a promising stallion, which provides the member the opportunity to breed his or her mare with the stallion once or twice per year. The monies raised through syndication provide for maintenance of the stallion.”
“You can also syndicate thoroughbred racehorses or event horses,” says FTBOA CEO, Lonnie Powell. “This allows virtually anyone the chance to be part owner in a competing horse. Owning part of a racehorse can be an exciting venture. A locally syndicated horse, Chance It, just won the In Reality Division of the FTBOA Florida Sire Stakes at Gulfstream Park. After the race, around 20 or so syndicate owners gathered in the winner’s circle and celebrated. Their horse had just won a $400,000 purse that would be part theirs. It was great to see the excitement they felt, and believe me, there were plenty of smiling faces all around.”
Chance It is owned by Shooting Star Thoroughbreds of Ocala. Shooting Star is a thoroughbred syndicate that offers a one-percent fractional interest in three handpicked thoroughbred racehorses for an annual fee of $2,500. This fee covers the cost of the horse, blacksmithing, training, transportation, veterinary fees and various other maintenance expenses through the end of a 2-year-old horse’s year. Thoroughbred horse races are only open to horses 2 years old or older. Some races, such as the Kentucky Derby, are open only to 3-year-olds.
Syndication fees can be as small as a few thousand dollars or as large as millions of dollars for upper echelon thoroughbred racehorses and prime breeding stallions.
“There are syndications that are tailor-made for almost any type of horse or situation,” says Powell. “This allows professionals and the general public alike to participate in racing, breeding and event riding.”
How to Get Started
If you’re interested in joining a horse syndicate, where do you begin?
“Anyone interested in purchasing a fractional interest in a thoroughbred horse which has been syndicated first needs to seek the advice of qualified legal counsel,” says Ocala attorney Michael Siboni of Siboni and Buchanan, PLLC. “It is also in your best interest to seek out an attorney who has experience in equine law. You will need to understand fully what your responsibilities and duties are before entering into a contractual agreement.”
Siboni says the costs involved in each syndication are predetermined and are paid at whatever time period is stated in the agreement. Payments can be due monthly, quarterly, semi-annually or annually.
“A horse syndication agreement is like any other contractual agreement,” he states. “You need to fully understand all the terms and conditions. What are your rights and what are your responsibilities? If your financial contribution is substantial, you want to insure your fractional interest. When looking for an attorney, ask a lot of questions. Make sure that the one you choose has significant experience in handling syndicate agreements, because each one can be slightly different from the other. Also, make sure they are familiar with the horse industry as a whole.”
Powell says research is key when choosing a syndicate membership. Which type of horse do you want to buy a fractional interest in and which horse is the right one for you?
“When it comes to choosing a thoroughbred racing horse for syndication, take a good look at the trainer and the owner of the syndicate,” he notes. “A good trainer will get the most out of a horse and an experienced owner will choose the best horses to train. It pays to go with experience.”
All three agree that horse syndicates provide excitement, camaraderie and enhance the pleasure derived from watching “your” horse compete on a local, regional, national or international stage.