New York State Thoroughbred Breeding and Development Fund Corporation
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NEW YORK STATE THOROUGHBRED BREEDING AND DEVELOPMENT FUND CORPORATION WEBSITE: NYBreds.com DIRECTORS Richard Ball, Commissioner Dept. of Agriculture & Markets EXECUTIVE DIRECTOR Jeffrey A. Cannizzo, NYTB, Inc. Tracy Egan John A. Crotty, Member NYS Gaming Commission Mark D. Gearan, Chair NYS Gaming Commission REGISTRAR John A. Graziano, Jr. Edward F. Kelly Adam Lawrence Joseph G. McMahon Sen. Howard C. Nolan, Jr. John J. Poklemba, Member Gaming Commission COMPTROLLER Todd R. Snyder, Member Gaming Commission Jill LaBoissiere, CPA William B. Wilmot, DVM January 31, 2015 To: The Honorable Andrew M. Cuomo, Governor of the State of New York Members of the New York State Legislature On behalf of the Board of Directors of the New York State Thoroughbred Breeding and Development Fund Corporation, I am pleased to present this annual report for 2014. This filing shows that the Thoroughbred breeding industry in the Empire State continues to make strides in recovering from the declines that affected the industry nationwide beginning several years ago. In fulfilling its mission to “support by monetary incentives the responsible breeding of quality Thoroughbred racehorses in keeping with the founding legislation to preserve New York’s irreplaceable farm land,” the Fund herein lays out all revenue, award payments, research funding, promotional spending and operational improvements made over the course of the year. The reputation of NY-breds was further enhanced during 2014 due to the performances of NY-breds in both restricted and open-company races, and was topped by the Breeders’ Cup turf win by Dayatthespa who was voted Eclipse Turf winner in mid-January of 2015. As called for in our founding legislation, the vast majority of the Fund’s revenues went right back into the economy in the form of breeder, owner and stallion owner awards and purse enrichment payments to both NYRA and Finger Lakes. The awards administered by the Fund were paid accurately, efficiently and fairly, based on the performances of registered NY-breds at Thoroughbred tracks in New York State. The Fund’s promotional spending is aimed at helping create demand for registered NY-breds, promoting the responsible breeding of quality Thoroughbred racehorses, and recruiting better mares and stallions to participate in New York State’s breeding program. The two percent of revenue directed by statute to the Zweig Fund at Cornell University is being used to conduct equine research that often helps lead to medical breakthroughs benefitting both animals and humans. One Broadway Center Suite 601 Schenectady, NY 12305 PHONE (518) 388-0174 FAX (518) 344-1235 A thorough examination of this report should help the reader understand why the head of the nation’s oldest Thoroughbred auction house pronounced that “The New York-bred breeding program is the premier state- bred program in the United States.” Sincerely, Tracy Egan Executive Director New York Thoroughbred Breeding and Development Fund One Broadway Center – Suite 601 Schenectady, NY 12305 One Broadway Center Suite 601 Schenectady, NY 12305 PHONE (518) 388-0174 FAX (518) 344-1235 Executive Review By Tracy Egan More than 40 years after the NYS Legislature created the New York Thoroughbred Breeding and Development Fund Corporation as a means of preventing dairy farms from falling off local tax rolls and of encouraging the breeding of racehorses on quality farm land, the signs are abundant that the mission is being achieved. Key industry observer Boyd Browning, President of Fasig-Tipton ‒ North America’s oldest Thoroughbred auction company ‒ places New York at the very top of regional programs. “The New York-bred breeding program is the premier state-bred program in the United States. It encourages Thoroughbred owners to purchase NY-breds & to race them in NY. As a result, both the quality and quantity of Thoroughbreds bred in NY have improved in recent years despite negative trends in many other states. The NY-bred award programs result in additional participation from industry members, which has a positive impact on the racetrack, on farms and on service providers in NY, and certainly in the sales ring.” The programs run by the NYTBDF can boast that in 2014: • NY-breds won 20 graded stakes races, including five Grade Ones • Six more NY-breds became millionaires • More NY-bred awards were distributed than ever before • The New York foal crop grew for the third year in a row • Twenty-two new Thoroughbred farms opened • The Fund illustrated its respect for and commitment to ex-racehorses through a number of promotional spends for Thoroughbred retirement or re-training venues • The Zweig Fund benefited from the largest-ever contribution from the Fund The combination of $44.5 million in restricted purse money, plentiful chances to race in restricted company, and an enviable awards program have made NY-breds a must-own for any racing stable. GRADED STAKES Perhaps the most important illustration of their improved quality is how well NY-breds perform at the open- company stakes level. New York-breds had another outstanding year in 2014, accounting for five Grade 1 stakes, seven Grade 2’s and eight Grade 3’s. Both Dayatthespa and Palace won a pair of Grade 1 stakes, and Dayatthespa was named Eclipse Champion Turf Female. In addition, Inimitable Romanee and Samraat each won two Grade 3 stakes. These are the kind of achievements the Board of Directors envisioned when it re- worked the Fund’s mission statement in 2011 to call for “the responsible breeding of quality Thoroughbred racehorses.” That quality was further demonstrated to run deep, as 52 NY-breds topped $160,000 in earnings in 2014, and six achieved millionaire status during the year. Additionally, Showcase Day, a day of New York-bred stakes, had been so successful in previous years that the New York Racing Association held three of them ‒ two at Belmont Park and one for the first time at Saratoga ‒ in 2014. STALLIONS For the sixth consecutive year, New York's stallion roster included at least six sires with annual Northern Hemisphere progeny earnings above $2 million, and that roster featured a noticeable new trend: stakes-winning class and, in particular, graded-stakes-winning talent. The Empire State's top 11 sires in 2014 were represented by 12 graded or group winners from New York to California to South America – the most ever, eclipsing the New York stallion roster's previous record of eight graded/group winners in 2010. New York and California were the only states outside of Kentucky standing at least three stallions with 2014 progeny earnings exceeding $4 million, with California's roster having been boosted by the recent addition of former New York-based stallion Bluegrass Cat, whose first Empire State-conceived offspring will be two-year-olds of 2015. About the same time that Bluegrass Cat departed, New York's relatively young roster of top-end stallions was boosted by the arrival from Kentucky of 2008 Eclipse Champion Big Brown, who weeks later (December 20) was represented by a Grade 1-winning (and undefeated) juvenile in California. The spirited rivalry between New York's two leading sires, Freud and Posse – waged since the latter arrived in the Empire State late in 2009 – continued, with both topping $4 million in annual Northern Hemisphere progeny earnings for the fourth and sixth times, respectively. Freud's lifetime Northern Hemisphere progeny earnings – all from offspring conceived in New York – approached $33 million. Five-time Grade 1 winner Congaree, who stood his first New York season in 2010, was represented by a new Grade 1 winner in 2014 and now owns the unique distinction of having sired Grade 1 winners on dirt, turf and synthetic. NY-BREDS AT AUCTION IN 2014 New York-bred performances in the sales ring held onto gains established in 2013 by weanlings and yearlings, and the third leg of the sales stool ‒ two-year-olds ‒ showed more gains than the other two segments. Buyers aimed for NY-bred juveniles due to NYRA’s expanded two-year-old stakes programs and fat stakes purses. BECOMING A NEW YORK-BRED In order to encourage breeders to keep their mares and foals at New York State farms, the Fund has firm rules that must be followed to ensure that a foal that is dropped here is eligible to become a registered NY-bred. Breeders must make sure that their mares follow our residency rules, which in some cases necessitates that they be bred back to a registered NY stallion, that they file mare movement cards to help us establish compliance, and that they allow their mares to be inspected by our registry compliance team. It follows that only Thoroughbreds registered by the Fund by virtue of meeting the residency and inspection requirements can be entered in NY-bred-only races held at race meets run by the New York Racing Association and Finger Lakes Gaming and Racetrack. Similarly, only registered NY-breds can generate awards for their breeders and owners, as well as for the owners of their registered New York stallions. NY-breds can also run in any “open” races in this state and throughout the world. Those who buy and own racehorses appreciate that with a NY-bred there will be more chances to earn money. Our horses can win a maiden race, any number of claiming races and two NY-bred restricted allowance races before turning around and running in the same allowance conditions against open company. That earnings potential has led to some sparkling results in the sales ring. REVENUE A record level of operating revenue, $22,096,393, was recorded by the Fund in 2014. Nearly 55% of revenue in the calendar year came from the VLT operation at Resorts World New York City, which for the first time paid the full statutory amount of 1.5 percent for the entire year.