Zayat Files Bankruptcy

[zinn21]

The leader in 2008 Stable Earnings filed for Chapter 11 bankruptcy protection on Wednesday.



http://thoroughbredtimes.com/national-n ... ction.aspx

[oliverstoned]

Never a good thing when an end user can't make it. Doesn't encourage new people to the biz. Got to say though he didn't come in with a smart plan IMO, like paying 4.6 mil for a Vindication (I'd rather have 15-20 200k ones and save the rest for training expenses for example.

[IcouldbeU]

I don't think this single bankruptcy will effect new people entering the business since most don't have that kind of money to into racing with. Most will be turned off by reading the internet the way that people blast each other and go after who they consider the "big boys" and the rule breakers.

[Sysonby]

I don't think this single bankruptcy will effect new people entering the business since most don't have that kind of money to into racing with. Most will be turned off by reading the internet the way that people blast each other and go after who they consider the "big boys" and the rule breakers.

There is that. But smart people know that the Internet is full of cranks. (including yours truly but we won't go there )

[zinn21]

Oliverstoned wrote:

Got to say though he didn't come in with a smart plan IMO, like paying 4.6 mil for a Vindication

The game is full of these guys who pay top dollar for horses with credentials and/or potential. Jess Jackson is one who got lucky two times in a row with Curlin And Rachel. Both could have been injured but did not.

One of the reasons I posted was to point out; here's a guy who led in stable earnings and is now filing Chapter 11. You can't argue his success- he was leading owner in earnings yet his racing operation is bankrupt. I think that speaks volumes about this game..

[CarolinaThoroughbreds]

Oliverstoned wrote:

Got to say though he didn't come in with a smart plan IMO, like paying 4.6 mil for a Vindication

The game is full of these guys who pay top dollar for horses with credentials and/or potential. Jess Jackson is one who got lucky two times in a row with Curlin And Rachel. Both could have been injured but did not.

One of the reasons I posted was to point out; here's a guy who led in stable earnings and is now filing Chapter 11. You can't argue his success- he was leading owner in earnings yet his racing operation is bankrupt. I think that speaks volumes about this game..

Jess Jackson didn't get lucky, he bought already made horses rather than yearling or 2yo "prospects".

And that's a lesson for someone with money who wants to enter the sport. Rather than spend $400,000 on a yearling, get a respectable trainer to privately buy you a couple of 2yo's who just broke their maiden first time out, in a nice fashion, for $200,000 each. Those 2yo's who just broke their maiden might not have a pedigree as fancy as that $400,000 yearling, but they're probably going to be a lot more profitable and a lot more fun for an owner than that $400,000 yearling who could easily wind up a $400,000 lawn ornament.

And no, I don't think Zayat's situation says much about the sport. It only says a lot about Zayat. Everybody's situation and everybody's approach is different.

[Joltman]

Yes, and Michael Gill another leading owner can't get the jocks to ride for him. I read somewhere that either WT Young or Bob/Beverly Lewis were also net in the tank on their racing operations.

Somebody said it best above that that's the nature of the game. It is a game to many/most and profitability as a business is a very elusive goal.

jm

[zinn21]

Carolina Thoroughbreds wrote:

And no, I don't think Zayat's situation says much about the sport. It only says a lot about Zayat. Everybody's situation and everybody's approach is different.

You haven't looked at too many Owners Balance Sheets obviously.

[Mom]

One of the reasons I posted was to point out; here's a guy who led in stable earnings and is now filing Chapter 11. You can't argue his success- he was leading owner in earnings yet his racing operation is bankrupt. I think that speaks volumes about this game

Just an opinion, but isn't success spending less than you generate and turning a profit? If he got to be leading earner by overspending beyond his means, who cares how big his income is? He's still broke.

[madelyn]

The bankruptcy filing was done as a protective move against Fifth Third Bank. This is not an uncommon practice in business, where there is a heavy-booted cross-industry lender involved. HOWEVER, I would think twice about breeding to a Zayat-owned stallion this year, since this kind of thing can escalate and go either way.

[tinners way]

I have never understood the speculative nature of the business at that level. No shots at anyone, but if you have the good fortune in business to have this type of disposable income, why would you leverage yourself so big? If these were top business people, even with mounds of disposable income, would you not analyze what has worked and not worked for the "investors" at that level the previous 10 years or so? And I am not talking about Coolmore, that already has their model in place- churn and burn.

It does seem that Jackson has done his homework, even though some of those purchases are hard to justify if the reported prices are correct.

Tom Hicks is another example, instead of horses it was sports franchises. Just a different kind of toy to play with.

It is hard to have the midas touch in more than one enterprise, or type of industry.

[HR LLC]

@Mom, his racing stable(Zayat Stables) is bankrupt...Zayat is not personally broke.

He is playing with the banks money and if he loses he will just walk away from his debt.

[tbrace]

Although it sounds radical, MOST people shouldn't expect to make money breeding or racing horses. It is a sport, a game, and like boating, golf, skiing, -- it costs money to do it, you don't make money by doing it, at least, not enough money to pay for everything.

Most organizations or individuals who make money in horses offer a service to owners -- such as, trainers, sales consignors, stallion owners, transporters, etc.

If fewer than 5% of horses make back their costs, what does that say about owners and making money.

It just isn't going to happen most of the time.

[oliverstoned]

Although it sounds radical, MOST people shouldn't expect to make money breeding or racing horses. It is a sport, a game, and like boating, golf, skiing, -- it costs money to do it, you don't make money by doing it, at least, not enough money to pay for everything.

Most organizations or individuals who make money in horses offer a service to owners -- such as, trainers, sales consignors, stallion owners, transporters, etc.

If fewer than 5% of horses make back their costs, what does that say about owners and making money.

It just isn't going to happen most of the time.

Exactly. That's why the Racing Czar should be courting the mega wealthy, dotcom millionaires, heirs etc., people who don't have to ask banks for money. It's a perfect sport for wealthy people who can't play sports. Intellectually stimulating and very exciting. That's why I have no problem with what Jess Jackson pays for his horses, because he can afford it and he's having fun.

P.S. Vote for me for Racing Czar 2011

[fastappy]

Never a good thing when an end user can't make it. Doesn't encourage new people to the biz. Got to say though he didn't come in with a smart plan IMO, like paying 4.6 mil for a Vindication (I'd rather have 15-20 200k ones and save the rest for training expenses for example.

OK, .... two fat rich guys, ones like beer and the other owns a beverage distributorship. Any confusion here?

http://www.bloodhorse.com/horse-racing/ ... ation-dead