JRHA Limits Select Sale Participants

by Michele MacDonald

In a major change of policy, the Japan Racing Horse Association has opted to prohibit owners who are not Japanese residents from selling foals at the annual JRHA Select Sale in July. 

The decision was announced in a brief statement on the JRHA website, which indicated there had been “no specific limitation” on who could sell foals at the sale in the past. However, as the event is a select auction, foals have been subject to approval for the catalog and acceptance has never been a given. 

Under the policy that will be new for 2015, the website declared simply that “entry of foals owned by non-residents…are NOT accepted.” The new rule does not cover yearlings. 

The JRHA’s decision apparently will forbid the sale of individuals such as the Frankel (GB) filly sold at the venue last year by Qatar Bloodstock, affiliated with the family of Sheikh Fahad Al Thani, through Mishima Farm to Toshio Terada for ¥96 million ($941,177). The filly is a half-sister to Hong Kong star Gold-Fun (Le Vei Dei Colori {GB}). 

Another sale graduate who apparently would not have been allowed in the Northern Horse Park ring as a foal under the new rule is 2012 G1 Tokyo Yushun (Japanese Derby) winner Deep Brillante (Jpn) (Deep Impact {Jpn}).
 
Now at stud at the Shadai Stallion Station, Deep Brillante was sold in 2009 by Paca Paca Farm for a partnership involving Calgary businessman C. J. “Jim” Cummings, fellow Canadian Dr. John Ryan and Irishman Brendan Hayes, manager of Kilfrush Stud. Katsumi Yoshida’s Northern Farm paid ¥31 million ($326,315) for Deep Brillante, and a foal who is a full sister to the Derby winner was sold by the trio through Paca Paca to Australian Paul Fudge for ¥145 million ($1,790,124) in 2012, setting a sale record for a seller not affiliated with the Yoshida brothers’ Shadai Group of farms. 

Other international owners who have sold foals at the JRHA sale include Kentucky-based Runnymede Farm and Sir Andrew Lloyd-Webber’s Watership Down Stud, which maintains farms in England and Ireland. 

In addition, SF Bloodstock and the Niarchos family have occasionally sold horses at the JRHA sale, although they have concentrated on yearlings. International owners can continue to sell at the JRHA sale if they offer yearlings and if those yearlings are accepted for the exclusive catalog, said JRHA spokesman Naohiro Goda. 

“The Japan Racing Horse Association was created to encourage the horse breeding industry in Japan, and one of the main purposes to organize the Select Sale is to support the local breeders,” Goda said in explaining the rule change regarding foals. “The reason to change the regulation is that JRHA is convinced that the Select Sale should be the beneficial market for Japanese breeders.” 

Runnymede Farm General Manager Romain Malhouitre, who attended the 2014 JRHA sale, declined comment on how the rule change might affect Runnymede’s breeding program in Japan. Runnymede has been selling foals at the sale for approximately a decade. 

Dr. Harry Sweeney, a native of Ireland who operates Paca Paca Farm and has an ownership license from the Japan Racing Association (JRA), also declined comment. 

Cummings said he received an email from Sweeney Jan. 21 advising him of the rule change. 

“I’m absolutely flabbergasted,” Cummings said, noting that he and his partners have spent as much as $1 million in fees and support costs to maintain their breeding program in Japan, which currently includes three mares. “Is this to assume buyers are welcome in Japan, but are not allowed to do business on a level playing field?” 

Cummings said he and his partners now face some difficult decisions going forward, and he emphasized the high costs of breeding and maintaining horses in Japan. Their business venture in Japan has been most rewarded through the sale of foals. 

In 2014, the partnership again achieved a big return when they sold another full sister to Deep Brillante at the JRHA sale, with the three-month old foal acquired for ¥78 million ($764,706) by Sheikh Fahad’s bloodstock advisor David Redvers.

Sheikh Fahad ranked as leading buyer at last year’s JRHA sale, acquiring five sons and two daughters of Deep Impact, and he was warmly received by sale officials. Redvers said at the time that Qatar Bloodstock was boarding three mares in Japan to breed to Deep Impact—Japan’s and the world’s leading sire by progeny earnings—and it was the sheikh’s decision to also try the commercial market as a seller with the Frankel filly foal. 

Sale of foals is particularly lucrative in Japan, where buyers have long held to the local tradition of acquiring their future racehorses even before they are weaned. With this tradition and since the value of JRA purses is so high compared to the rest of the world, young horses with fashionable pedigrees often have been sold for more as foals than they would be as yearlings, although the JRHA market has been shifting toward yearlings in recent years. 

Obviously, breeders can make more money on foals than with yearlings as the latter require an additional year of care and board. 

The Shadai Group of farms owned by brothers Teruya, Katsumi and Haruya Yoshida has dominated the sale, annually offering the majority of horses included in the catalog. The auction is organized primarily by the Yoshidas and their staffs, although other established Japanese breeders including Shimokobe Farm, Chiyoda Farm, Grand Stud, Okada Stud and Taihei Stud Farm regularly participate. 

Goda said that since Sweeney has established a residency in Japan, Paca Paca can continue to sell foals that it owns outright at the JRHA sale. However, he said that Paca Paca and other farms would be barred from selling foals that are partly or wholly owned by residents of other countries. 

The JRHA sale is Japan’s premier marketplace; other sales in Japan do not generate prices as high as those commanded at the JRHA select auction. 

In an era in which Japan has recently allowed international owners including Dubai Ruler Sheikh Mohammed bin Rashid al Maktoum; his wife, Princess Haya bint al Hussein of Jordan, and his son, Crown Prince Sheikh Hamdan bin Mohammed, to obtain JRA owner licenses along with other major figures such as Sheikh Fahad and Fudge, the sale rule change could affect the growth of international participation in Japan. 

“It’s almost like a trade barrier,” Cummings said of the new rule. 

However, Goda said the JRHA board members did not believe the rule would affect the willingness of international buyers to acquire Japanese-bred horses at the sale. To race in Japan, international owners are required to maintain mostly Japanese-breds in their stables. 

The JRHA has sought for years to stimulate international buyers’ interest in the auction, although the high cost of horses in the island nation and the stringent rules on ownership licenses–and thus the ability to compete for the rich purses–have been hurdles. 

Over the past few years, some owners from Australia and Macau have begun to buy horses during the sale. 
Sheikh Mohammed is the only owner from outside Japan who has set up a major breeding base in the nation that includes stallions and more than 100 mares, operating under the banner of an official Japanese entity called Darley Japan Farm KK. This entity would be allowed to sell foals at the JRHA sale, Goda said, although Darley Japan has concentrated on raising its foals for the racing stables of Sheikh Mohammed, Sheikh Hamdan and Princess Haya. 

Since it was created in 1998, the JRHA sale has produced many outstanding racehorses, including Deep Impact, a son of Sunday Silence who was sold as a foal by Katsumi Yoshida’s Northern Farm to Makoto Kaneko for ¥70 million ($583,333) in 2002. 

Just a Way (Jpn) (Heart’s Cry {Jpn})–who on Jan. 20 was honored as the world’s top-rated runner for 2014 by the handicappers who compile the Longines World’s Best Racehorse Rankings based on his performance in winning the G1 Dubai Duty Free–was sold as a JRHA yearling to Akatsuki Yamatoya by the Shadai Group’s Shiraoi Farm for ¥12 million ($133,333). 

In addition, the sale has generated record setters. A filly foal by King Kamehameha (Jpn) (Kingmambo) established a world record when she was sold in 2006 by Northern Farm to Globe Equine Management Co. for ¥600 million ($5,217,391). Later named Daoine Sith (Jpn), the filly was unraced. 

The 2015 JRHA sale will be held on July 13-14, with plans for about 240 yearlings to be catalogued in the opening session followed by approximately 200 foals.