Pimps, Prostitutes and Depreciating Horses.

Here is a question I think that people in the Western Performance Horse industry should ask themselves.
Why do most of our horses in so many events depreciate in value once they reach the age of 4?
Consider some sports are run .like a singles trip to Vegas, they view gambling and prostitution as their main attractions.

1. Start with a young horse under the age of 2,
2. Gamble that a trainer and that horse can win a big prize by the time they are 3 or 4
3. Hope that others will pay for the right to breed to the horses and make more prospects to start the next cycle. 

 So how is this different than any other horse sport? In my opinion the horse sports that treat their sport like a family trip to a theme park have:

1. Horses that can appreciate in value well into their teens. 
2. Larger numbers of people who participate in all levels of the sport
3. Excitement and appreciation from far more age groups and tax brackets. 

The sports that treat their promotion as a singles trip to Vegas have

1. Horses that depreciate after the age of 4 
2. Less people participating
3. Disgust from many, for the perception of disposable horses that the sport creates.

I am not saying the promotion of gambling and sex to adults is not a good marketing plan.
But most people grow up and choose to share our time and play money between Vegas and Disneyland.
Therefore the target market for Disneyland is much larger than for Vegas

 The difference is a simple question of what came first? 

The dealers and prostitutes or 
the roller coasters and mini golf?

In other words

• Was an association set up to promote a sport, allowing an industry of trainers and breeders and coaches to grow around the need  generated  by participation in that sport?
• Was an association set up to use a sport to promote an industry of trainers, coaches and breeders creating the need for coaches, trainers and breeders to be ensured by design.  

When a sport is promoted for the growth of the sport  it is promoted in such a way that encourages: 

1. The large majority of people who own horses, the do it yourself rider to compete. Riders who enjoy raising and training their own horses,
2. The use of the same horse for as long as the person wants.
3. Anyone with some knowledge and ability to help those just starting 
4. The development of a industry that is diverse in both the quality and cost of assistance to new comers, This is important as we get what you pay for, but we want both people who wear Walmart clothes and Armani to both find help they can afford if they want help. 

When a sport is promoted for the growth of an industry it is promoted in such a way that encourages: 

1. The need for trainers, coaches and new horses very often in order to have any success 
2. The part time coaches and trainers to give it up and become non pros and amateurs, so they do not compete for business against the full time trainers and coaches.
   Effectively stopping their participation in the growth of the sport, by helping others who can not afford full time trainers and coaches prices. Also using the few dollars they would have made to participate more themselves.,

Demand  - Appreciation - Depreciation

Horses values increase as demand increases, Demand is affected by 2 things:

1. Rarity of the item 
2. Number of people wanting that item. 

The availability of  performance horses can  not be determined by numbers of horses,  we have lots of horses: Within one sport alone there are over 3000 foals a year being raised with the goal of becoming Reiners  . the number of foals registered with AQHA each year is also proof we do not lack horses

What we do as an industry is create rarity based the talent of the horse.
We create demand by the number of people who want a horse of a certain talent level.

Rarity of the horses at every level of ability

Creating the rarity of the horse based on the talent of the horse regardless of age is the most important reason I believe horses in some sports can appreciate until well into their teens, and in other sports most of the horses start to depreciate after they are 6.

Talented horses are what every event is designed to promote. Yet many sports are set up to limit the reasons for developing a horses talent past the age of 6.
Lets look at one of those events. Reining as mentioned above has at least 3000  horses born each year whose owners believe, hope and pray will be Reining horses.
Consider:

• If only half of those horses reach some level of success in the show pen as a Reiner sometime in their careers.  We have to assume that at east 50% will get tried as Reining horses since the people nominating them are gambling $300 as weanlings to nominate them to be eligible for the major aged event Reinings.  
• The year the oldest of those horses are 15, (the time many event  horses are at the top of their games), there would be 13,500 reining horses 7 years old or over competing or have competed successfully in the sport of reining.
• There would be 6000 under the age of 7 competing that same year 
• The money and prestige offered for Reining horses to win at shows around the world is split approximately 20% to 80% . 
• 20% for the 13500 over 7 and 80% for the 6000 under 6?
• Is it any wonder the reining horse depreciates in value after it is 6?
• Even if you dispute the numbers I challenge anyone to show the reason for depreciation after 6 is not valid?

This system of promoting the young horse is designed to support trainers and breeders. Many claim it is the owners who do not want to pay for the training of more than a year or 2. Which may be true but allowing more time does not say they have to use it.

Promoting the open events more than the aged events does a few things:

1. Does not promote the need for a new horse every 2 or 3 years.. 
2. Allows for trainers to take their time and produce a quality product 
3. Puts the focus on longevity - not everyone needs a new horse every few years
4. Forces trainers to consider longevity over quick results. 

Creating more demand for all levels of horses requires more people and that is another topic, but suffice it to say there are a few things that can greatly effect the participation level of any sport.

 Attracting people requires 2 things: 

1. A handicap system that levels the playing field and encourages participation. . If a handicap system gives an advantage to anyone group over another then that is a problem. and also a topic for another day.
2. A cost to fun ratio that fits many peoples tax bracket and desires. Basically we get  what we pay for, many people can enjoy betting $20, other people cant get excited unless there is $100,000 on the line. Many people enjoy competing with themselves, others want to beat someone. The most successful sports offer something for everyone.   Again another topic for another day 

Can the amount of money to be won improve the cost to fun ratio? 

Sure, for some, depending on the handicap system used, it can be evenly and fairly spread between all exhibitors or it can advantage the pimps and prostitutes, ooopps  I mean people who try to create an advantage through rules

One of the most successful handicap systems allows barrel racers of many levels to win money at every race. Barrel Racings 4 D system  (NBHA rule book page 5 explains their handicap system) By winning money they can offset the cost of competing. That does improve the cost fun ratio for everyone.

The best thing a great handicap system does is it increase the money and prestige available for everyone by increasing the numbers of participants - Even the trainers and wealthy clients who like winning big win bigger without the advantage of poorly designed handicaps! 

Lets be honest, the chances of making money in the horse business as an owner or hobbyist are slim at best.

Most join as owners and hobbyists for the love of the horse, and the comradeship of other horse lovers.
So it only stands to reason that an event that creates demand through fun participation and level playing fields with great handicap systems will be far more popular than events that rely on just the amount of money to be won.

My conclusion after these considerations is - 

1. The desire to promote an industry instead of a sport is the one thing the smaller horse sports have in common! 
2. The smaller the sport the smaller the demand for the horses.
3. It is a shame that so many of the sports that have a huge draw and appeal factor fall into this category. Because almost as fast as people are attracted they leave and never come back.

If you doubt this conclusion is true then contact any association that focuses on aged events and ask them  how many new members they get each year, then compare that to the total membership and decide for yourself if the retain-age rate is good or poor.
The NRHA use to print those types of stats in the Reiner until some of us started asking where are the old members going?

Thanks for sharing your time with me,

Rod