Dubai's Sheikh Mohammed Still Committed to Horseracing After Spending Cut

Sheikh Mohammed bin Rashid Al Maktoum, the ruler of Dubai, remains committed to horse-racing even after slashing his spending on young horses by 60 percent this week at Europe’s largest bloodstock auction, his chief buyer said.

Sheikh Mohammed, the world’s biggest racehorse owner, and his associates spent 3.21 million guineas ($5.4 million) on 24 yearlings during a three-day auction at Tattersalls in Newmarket, eastern England, that ended yesterday. That compares with 8.16 million guineas on more than 43 thoroughbred horses during the same sale last year, Europe’s biggest bloodstock auctioneer said.

“We have bought less horses this year mainly because of our acquisition of Stonerside Farm in the U.S. which has meant that we have more homebred yearlings then before and there is a limit on the number we can put in training,” John Ferguson, Sheikh Mohammed’s main bloodstock adviser and buyer, said in an e-mail today.

“I confirm that Sheikh Mohammed’s commitments worldwide to racing and breeding remains as strong as ever,” Ferguson said.

The drop in spending by the Dubai ruler comes less than a year after his emirate’s state-controlled holding company, Dubai World, roiled world markets by saying it would seek to delay debt repayments. The announcement stoked concern that a potential default would set back the global financial system’s recovery from the credit crunch.

Stable Purchase

Sheikh Mohammed’s Darley operation bought the Stonerside Stable, located in Kentucky and South Carolina, in September 2008 for an undisclosed sum from Robert McNair, the owner of the National Football League’s Houston Texans, the Thoroughbred Times reported at the time. The deal included 80 horses in training as well as 170 broodmares, yearlings and weanlings. Darley had paid $17.5 million for Stonerside’s farm and training center in Saratoga Springs, New York in January 2007, the publication said.

Ferguson said he had also bought fewer young, untrained throroughbreds because Sheikh Hamdan bin Rashid Al Maktoum, Sheikh Mohammed’s brother, was also present at Tattersalls to buy horses for his own operation.

“Naturally we do not bid against him and so we enjoyed watching him buy many of the better horses,” Ferguson said.

Sheikh Hamdan, who was the top buyer at Tattersalls this week as he spent 5.2 million guineas on 20 yearlings, owns four centers in the U.K. that make up the Shadwell Stud. He also owns operations in Ireland and Lexington, Kentucky.

Realistic Expectation

The price for yearlings is quoted in English guineas -- equivalent to one pound and five pence. The guinea, no longer in use, was the unit of currency often paid to artists and professionals.

Godolphin, the Maktoum family’s private horseracing stable, has raced 284 horses so far this year, according to its website.

“Every sale, you want the key indicators -- turnover, average and median -- to rise, but that’s not necessarily a realistic expectation in the current economic climate,” Jimmy George, marketing director at Tattersalls, said in an interview in Newmarket on Oct. 6. “We probably outperformed the market last year.”

Total sales at the auction this year were 48.2 million guineas, 10 percent less than last year. The median price paid for a yearling declined 10 percent to 70,000 guineas.

‘Selective Market’

“A few years ago you could bring anything here and it would go for huge sums,” Harry Herbert, managing director of Newbury, England-based Highclere Thoroughbred Racing, said in an interview at Tattersalls on Oct. 6. “But now, it’s a very selective market place.”

Sheikh Mohammed told Bloomberg News last month that the emirate is recovering after Dubai World reached a debt- restructuring settlement with creditors.

“We are back,” Sheikh Mohammed said in an interview with Bloomberg Television’s “InBusiness With Margaret Brennan” at the FEI World Equestrian Games in Lexington, Kentucky, on Sept. 26. “This is a challenge. Life would be boring if there’s no challenge.”

Tattersalls’ annual sale of the best young racehorses in Europe is an important gauge of confidence in a sport dominated by the Dubai ruler and Irish millionaires John Magnier and J.P. McManus.

On the first day of the auction, Magnier’s Coolmore operation spent 1.2 million guineas on a filly by his leading stallion Galileo, the highest price paid for a yearling in Europe since 2007. Magnier also bought the top lot on the second day of the sales, another Galileo filly, for 900,000 guineas.

Market Openings

A drop in spending by the Maktoum family may give other buyers a chance to buy better horses, Andrew Tinkler, chief executive officer of Warrington, U.K.-based logistics company Stobard Group, said in an interview at Tattersalls on Oct. 6.

“The horse industry does need people like Sheikh Mohammed in there to keep it alive,” said Tinkler, who has built a stable of 60 racehorses, yearlings and broodmares in the past three years. “But it gives us newcomers a chance to actually get more involved.”

To contact the reporter on this story: Danielle Rossingh in Newmarket through the London newsroom on drossingh@bloomberg.net

To contact the editor responsible for this story: Christopher Elser at celser@bloomberg.net

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