Bloodlines Presented By The Virginia Thoroughbred Association: Behind The Scenes Of California Chrome’s Sale To Japan by Frank Mitchell|12.31.201912.31.2019|11:35am5:45pm California Chrome at Taylor Made Farm With the first crop of colts and fillies by Horse of the Year California Chrome (by Lucky Pulpit) ready to turn 2 on Jan. 1, their sire is going to leave for his new home in Japan sometime in the first half of January. Taylor Made Farm, which bought into California Chrome during his racing career, then syndicated and stood the horse at the family farm outside Nicholasville, Ky., announced in November that Arrow Stud in Japan had made a successful offer that had been accepted by the syndicate. As a result of the syndicate's decision, the horse was sold and is being relocated by the new ownership to their property in Japan, where California Chrome will stand for 4 million yen, approximately $45,000, live foal. To satisfy the requirements for shipping a horse overseas, the chestnut champion has been in quarantine since Dec. 3, and he is “expected to ship out during the first half of January, depending on when all the quarantine tests are completed,” according to Travis White of Taylor Made Farm. The sale itself required a few steps and was the result of several factors. The decision to sell the horse was made by the ownership syndicate. The Japanese had been interested in California Chrome since his classic-winning and award-winning campaigns on the racetrack. They had, in fact, tried to buy him before, and “when they came to us with an offer, it was enough that we had to ask the shareholders,” White said, and the membership of the syndicate voted to sell him on. Like most sales of this sort, the price was not announced, but we can estimate the figure by considering the horse's stud fee multiplied by a 100-foal annual crop, then considering that over a number of years. So it is safe to say that the offer and resulting sale price for California Chrome was quite substantial. “To get the shareholders value comparable to the offer, California Chrome would have had to do very well and more than maintain his current level of stud fee of $30,000 for several years,” White said. To do that, the horse would have had to be a high-level success as a sire, which made it very difficult for the syndicate to keep the horse when you realize that no more than 20 percent of new stallions succeed sufficiently with their progeny to maintain or elevate their present fee. Making the decision to sell, however, was not an easy one, White noted. “These were people who had invested in the horse, largely had sent mares to him, and had supported him over the intervening years. Taylor Made only owned 20 percent. So it wasn't a life-changing deal for the farm or anything.” Nearly everyone was for the sale, however, because of the economics of raising and racing horses. Nearly everyone who raises or races horses loses money. A significant part of the decision to sell California Chrome was the result of his yearlings' reception at the 2019 Keeneland yearling sale, as well as other auctions around the country. From a first crop of 105 foals, 77 went through the sales ring in 2019, with 42 sold for a gross of $3,759,000, an average of $89,500, and a median of $65,000. The better stock were quite nice, not especially pretty in some cases, but they were generally of good size, well conformed, with good length and good mechanical properties to be athletes. The sales numbers tell a tale. The commercial market was not a strong believer in the horse, and the number sold and the prices are a factual measure of that. “A lot of commercial breeders didn't gravitate toward him like we'd hoped,” White said. In evaluating and acquiring racing prospects, advisers and buyers typically want to limit risk as much as possible; buyers and breeders want every one of them to look the same. “The Chromes came in all shapes, sizes, colors. A lot of them tended to look like the mares.” But that is not an absolute indicator that California Chrome will be a poor sire. All these young horses have a lot of growing to do, and some pinhookers bought stock by California Chrome in the belief that they would improve in training by early 2020. Nor is it a certainty that we have seen the last of the 'Chromes.' When the horse was syndicated, “the Martins kept 50 percent and supported the horse more than anyone I'd been involved with,” White said. “They took the money from [the sale of California Chrome's dam] Love the Chase and spent it on five or six really nice mares. They bought a bunch of less-expensive mares for him, as well. They also did some foal-share arrangements that paid for shipping mares to the horse and were very advantageous to mare owners.” The Martins have a couple of breeding rights in the horse still and will send five mares to Japan this year; they will continue to play a role in his stallion career. White said, “We have the right of first refusal if Arrow Stud receives an offer, and when the horse retires from breeding, we have the option to return him to the farm.” Clearly, Martin is a fan of Japanese racing and believes in its approach. With the emphasis on racecourse performance in Japan and the exceptionally rich purse structure that allows breeders there to buy the best available at auction, California Chrome will have great opportunities to prove himself under the racing conditions in Japan. And as a star racehorse and personality, he already has a significant following in Japan, and this is likely to increase dramatically now that the stallion is located there and will have racers there also because some of the stallion's six-figure yearlings were bought for import to Japan. As an indicator of interest in the horse from Japan, “The horse is book full,” White said, “and the syndicate at Arrow Stud sold out of shares in a day, which tells you how different the market is over there, compared to here.” Frank Mitchell is author of Racehorse Breeding Theories, as well as the book Great Breeders and Their Methods: The Hancocks. In addition to writing the column “Sires and Dams” in Daily Racing Form for nearly 15 years, he has contributed articles to Thoroughbred Daily News, Thoroughbred Times, Thoroughbred Record, International Thoroughbred, and other major publications. In addition, Frank is chief of biomechanics for DataTrack International and is a hands-on caretaker of his own broodmares and foals in Central Kentucky. Check out Frank's lively Bloodstock in the Bluegrass blog.