Wednesday, January 7, 2009

The Cost of Training

I've been asked this by a couple of people here lately.

Although finances probably are not something appropriate to discuss in this type of forum, I've gotten to thinking about this and maybe this is a good way of informing folks about one of the other mysteries surrounding racing.

Training is expensive. When you are a one-person operation, it's also backbreaking work.
There are no days off. Not for the human.
Period.

Stall rent, bedding, feed, superior quality hay, basic supplements, exercise rider, equipment, those are just the basics that come out of a trainer's pocket.

By the time it's all said and done, I make an average of $6 per day off each horse.
Trainers depend on purse winnings. My cut from a race is, if the horse runs 1-5 place, 12%.

When you are looking at a purse like the last race Lady ran in, this is how the purse structure breaks down:
Purse: $22,000
1st place: 60% of purse
2nd: 20% of purse
3rd: 10% of purse
4th: 5% of purse
5th 2% of purse

The rest of the field generally gets the jock mount fee "reimbursed", i.e. the horse will make something like $50-60, which pays for the jockey.

In other words, training race horses for a living is slim pickings in the paycheck department, unless you have a huge barn full of talented, problem free horses (yea right!).

I had a discussion earlier with a friend about this (another trainer) and although our styles are very different, and we look at horsemanship from different backgrounds, on this we both agree:

You are better off owning your horses than to have a public stable when you are a small barn.

Add to the financial picture, the emotional drain that being at the mercy of other people puts on you mentally, well, there you have it.

It doesn't matter how good a trainer you are, how happy and well trained the horses in your care are, racing is racing and there are no guarantees. Purses suck these days, everyone is having financial problems and what it boils down to is that this business is a thankless game.
Add to that some of the creeps who are trainers out there (there is one particular trainer at my training center who just can't help himself - he LOVES to steal horses from other trainers. He just did this to a trainer in the upper barn- badmouthed the trainer to his owner, who turned around, pulled all the horses and gave them to the badmouther. It does make you wonder about the owner and his ability to judge people, though...)
I always thought he was a nice enough guy but then hearing the things I do, I guess there must be a reason why he was only allowed back to the training center conditionally (other people's stuff better not go missing) and everyone calls him a crook.

The point being, there are different folks, different strokes out there. I am never going to be one of "those kinds of trainers". I'm in this for my love of horses and racing. The horse will ALWAYS come first in my barn. I realize this is an unconventional way to do things at the backside, but this is where the buck stops for me.

You guys can google race horse trainers and come up with some websites and see what trainers charge for their dayrates. I know what I charge is nowhere near enough.

There is an interesting bit of research out there which I am going to paste below. Its data was compiled by surveying different training barns in Kentucky. Note when you read the prices listed for things such as hay and feed- I get a super deal on my hay and pay $5 per bale. A bag of feed costs me $20. A bale of straw runs $3.

This article is copied from the "Race Horse Trainer" website:

Cost of Training

Owners - do you wonder where your day rate money goes? We interviewed several medium sized racing stables in Kentucky to come up with an average breakdown of the rate paid by owners per horse for training services. The breakdown is based on a 10-12 horse stable, which if keeping costs as low as possible could manage with 1 rider, 1 hotwalker, and 2 grooms. Most stables have horses coming and going all the time, therefore contract labor is often used to supplement staff on salary (it's a rare rider or hotwalker who can work with 10 horses/day; 5-8 horses/day per rider or hotwalker is more realistic). Some trainers gallop horses themselves which is a big savings in exercise rider fees. Note that groom cost per horse is higher because a groom works with less horses than a rider or hotwalker (3-5 horses/day per groom is common).

Typical costs per horse per day in Kentucky and can vary by several dollars/day - the numbers here are on the LOW END of the range, and are current for 2004 :
$12 - exercise rider
$17 - groom
$5 - hotwalker
About 20% of the labor cost for groom, rider, and hotwalker is FICA, unemployment, and workers compensation taxes.
$4 - straw
$6 - hay
$3 - grain
$1 - supplements
$5 - office/barn equipment and supplies
The total is $53/day. In our research we found day rates in Kentucky that varied from $35-$80/day. The majority of trainers we encountered that are stabled at race tracks and large training centers in Kentucky charge about $60/day. Note that training centers that do not have live racing charge "stall rent", generally at a rate of $5-$8/day per stall.

Other expenses paid by the trainer and usually not covered by the day rate:
travel and moving expenses
assistant trainer's salary
liability insurance
health insurance

Other expenses paid by the owner that are not included in the day rate:
farrier
shipping
veterinary care, medications, vaccinations, worming
specialized equipment for an individual horse
mortality insurance on horses
liability insurance

Other points to consider:
-Not only do most trainers drive to work in the morning 7 days/week, they also have to
drive to the races when not stabled at the active track, and many move their entire
stable and their home with the racing circuit several times a year. In order to retain
important staff members, trainers have to pay some employees' travel and moving
expenses as well.
-For these reasons travel expenses are extremely high for most trainers.
-For trainers who have exercise riders on salary, the more horses per day that one
rider can gallop, the less the cost per horse for the trainer. Similarly the trainer's labor
cost will be less if salaried grooms handle more horses per groom; however, each
horse in the stable will receive less individual attention if the groom and exercise rider
have more horses to work with daily.
-Feed and bedding cost is directly related to quality, and feed/bedding quality directly
affects the horse's health and performance so is very important. The cost of hay and
straw can fluctuate greatly depending on weather conditions and demand. Most race
tracks and large training centers mandate use of straw for bedding, so lower cost
bedding options like sawdust on rubber mats is not an option.
-Most racing stable employees and many trainers do not have health care insurance
coverage because they can't afford the premiums. Of course this is a problem shared
by many small businesses in the U.S. This problem is part of the reason for the
existence of horsemen's organizations such as the Horsemen's Benevolent and
Protective Association (HBPA) and the Kentucky Racing Health and Welfare Fund.

So you might ask, "how does a trainer make a living?"

Trainers have to make ends meet with purse money, and there isn't much room for error or a trainer will go broke quick. Let's optimistically assume that an average trainer's 10 horse stable earns an average of $20,000/year per horse, or $200,000 in total earnings. The trainer's share of the purse earnings is 10% or $20,000. A major focus of the HBPA is maximizing purse money, since it is what keeps not only trainers, but the whole racing industry in business.

Creative ways that some trainers try to improve the bottom line:
-Owning part of the horses they train, therefore increasing their percentage of purse
earnings. This is risky since there is no guarantee that any horse will actually earn
money (see stats below).
-Acting as bloodstock agents for their owners, making 5-10% commission on buying
and selling racing prospects.
-Owning a farm and breeding for racing or sale, boarding layups and young horses for
owners.

Unless a trainer has several high dollar earners in the barn, it's a tough way to make a living. A trainer must be ruthlessly selective of the horses kept in training to ensure that each one can contribute to the bottom line. This is not an easy task considering the statistics below from Thoroughbred Times:

Chances of what any given thoroughbred race horse born in North America might accomplish in its entire racing career:
run in a race: 69%
win a race: 45%
win more than once: 34%
win a stakes race: 3%
win a graded stakes: less than 1%
race at age 2: 34%
win at 2: 11%
win a stakes at 2: less than 1%
*Copied From Race Horse Trainer*

2 comments:

Jackie said...

Hey, thanks for sharing that post! I've read a lot about racing, but never really knew how it worked as far as budgets and how you trainers actually make money. Not an easy way to make a living, that's for sure!

Asif said...

Great post! thanks for sharing your information, it helps even in the academia world