Is that horse a hobby or an investment?

June 12, 2006 6:17 AM

What do you know about the economics of the Grand Prix horse jumping circuit?

I spent Sunday at the Upperville Colt & Horse Show where I watched the $100k Grand Prix Jumping event. The top prize was $30,000. There were horses and riders there from all over the Eastern seaboard, some had come from quite far away. The whole experience prompted several questions about the economics of the event as the costs associated with fielding a horse seemed to so far outweigh the possiblity of adequate recompense.

I think the overarching question is: Is this a business or a hobby?

There seemed to be several different types of horses entered (out of 20 entrants this year):
1) Horses owned by their riders (a distinct minority, maybe 2 out of the 20). These folks could make some money by winning with their horse.
2) Horses owned by a farm but ridden by professional jumpers. ( A couple of farms had multiple horses in the competition. This seemed like straightforward marketing.)
3) Horses owned by one person but ridden by a professional jumper.
4) There seemed to be a couple of horses owned by businesses ("The Sarton Group"--I made the name up, I can't remember the names). I thought they were groups of investors that had invested in the horse, others in our group speculated that they were businesses of some kind (although there was no identifying information about what they did or where they were located) that were sponsoring the horse for advertising and raising their profile in the horsey set.

The first three categories all seem like they (possibly) take care of themselves: owner-riders actually riding for the prize money, the farms advertising their bloodlines and various services, the single owners hobbyists (like dog fanciers) who pay someone to ride for them in order to participate in the milieu. The fourth group seemed to open up the possiblity that there was money to be made beyond the (relatively) meagre 30k first prize. There was absolutely no discussion of horse bloodlines (as one would expect were the money on the *ahem* backend of breeding), and the announcing was very focussed on the riders.

Does anyone have any more information?

posted by OmieWise to sports, hobbies, & recreation (5 answers total)

There is money to be made on the "backend" of breeding. A stud horse with the right bloodlines can easily collect thousands per live mate, and hundreds per vial of frozen semen. However, horses ultimately are a very expensive hobby for 99% of the people involved. A few will be lucky (or good) enough to make a good living riding or raising horses. The vast majority will be in it for the love of the animals.
posted by COD at 6:47 AM on June 12, 2006

also, there are other shows during the year with $ prizes, and sometimes businesses do buy horses and sponsor riders not just to make some money from breeding but from advertising. so the money definitely doesn't stop at $30k.
However, I think that for sponsors, horses are just a way to dispose of disposable income.
posted by chelseagirl at 7:34 AM on June 12, 2006

It's both a business and a hobby. There are pros who are riders, breeders, trainers and agents and there are hobbyists and wealthy owners as well as business owners. The money in horses in the US is primarily made in commissions and in training and lesson fees. For example the pros who ride in these classes typically buy and sell for a 10-20% commission and top show horses go from $50K- $1million, with good prospects going for about $30K. It takes 4-6 years to get a horse to GP so if a farm or individual owner buys 15 prosepcts and maybe one makes it to GP, 2 or 3 get injured and the rest go on to amateur or junior owners at less money you can see that it is a bit of a gamble and you need some other income to cover operating costs. Not just anyone can bring a horse from prospect to national or international level competition so the trainers (who might be the competition riders or might not) get around $500- $1500 month in training and maintenance fees. They can get about $75+ an hour in lesson fees and most have numerous clients and assistants that help them and they make money that way too. Competition earnings are good (there are several $150K prizes) but it is very hard in the US to earn enough to live that way. A top horse will more than pay for itself but there are not too many of those at any time.

Buying a made horse is expensive and that is why they are often owned by investment groups or wealthy individuals. Many of these horses are bought with international competition as a goal, specifically the Olympics or World Cup and there are a few rich patrons who try to keep horses in the country in all of the top countries.

People DO make money off of jumpers, it is a huge business but in the US it is the day to day expenses that keep it afloat and the money made on buying or selling a top horse, while potentially huge, is a bonus. In Europe it is a different set up and easier to make money as a rider in competition as most of the competitions are invitiational, the travel is much less and the prizes much higher. Most riders there make the majority of their money competing and dealing and very little by selling or training amateur clients.

Breeding fees for top jumpers stallions are maybe $2K and that's only in the US, less in Europe so while it's an OK business it's not real lucrative, especially when you factor in the promotion and marketing money.
posted by fshgrl at 9:00 AM on June 12, 2006

I remember seeing a horse in the Kentucky Derby once owned by a "company" that was really just five guys who couldn't afford a real race horse individually. So, just because it's owned by a company doesn't mean it's a serious industry.
posted by dagnyscott at 10:48 AM on June 12, 2006

It is a serious industry but most of the money in the US is made selling services or products to amateurs. I know people who make a living solely by riding and competing but they are very good and work very hard and you have to love it to make it worthwhile. Lots of divorces and lots of people barely scraping by. There is a lot more money in racehorses, that's for sure.
posted by fshgrl at 1:42 PM on June 12, 2006