Q&A: Jeffrey Cannizzo Of New York Thoroughbred Breeders, Inc. On Proposed Changes To State’s Breeding Program

The landscape of breeding in New York is going to look very different by 2030, and a set of proposed modifications to the state’s breeding program spearheaded by New York Thoroughbred Breeders, Inc. aim to make sure it’s a positive shift.

In late August, the rule changes hit the public comment period with the goal of expanding the number and quality of broodmares entering the state, while also rewarding owners and breeders who support New York sires. Breeding farms producing nearly 20 percent of the state’s foal crop are being run by people approaching retirement, so the need to refresh the broodmare population and maintain a foal crop large enough for NYRA tracks to continue carding 600 state-bred races per year was imperative.

The proposal would create an exemption to the rule requiring incoming pregnant mares to breed back to a New York stallion in order to earn “resident” status so long as they were purchased for $50,000 or more at auction, or a threshold determined by the New York Thoroughbred Breeding and Development Fund. Mares purchased under the threshold will still be subject to the “breed back” rule to attain residency, as they had before.

The revisions would also extend the time a mare can be out of the state to be bred from 90 days to 120 days. Another significant change would create a $5,000 purse bonus for New York-sired runners who break their maiden in-state. If all runs on-schedule, the new rules could be in place in time for the November mixed sales.

Paulick Report bloodstock editor Joe Nevills spoke with NYTB executive director Jeffrey Cannizzo about the proposed rule changes, the reasoning behind them, and how they’ll help the New York-bred program.

Question: What were some of the motivating factors behind the proposed rule changes?

Jeffrey Cannizzo: The demographics of the people that are breeding and owning farms is dramatically changing, such that people are of the age that they’re leaving our industry – not because of their desire or interest, just purely based on where they are in life, and whether they’re going to be here long-term from now.

It’s quite scary, when five of the leading perennial breeders are of the age where they’re not going to be in this industry five to seven years from now, nor is anyone in their families picking up their farms or businesses. It’s going to leave a major void. This is exactly the same void that’s happening in every state. I’m attempting to be in front of a problem.

Over a year ago, we asked what type of tweak or rule change could we look at that doesn’t jeopardize the program, that doesn’t dramatically hurt one interest or entity. Realistically, some of the things that other states

are doing might be a good idea, and this is what we came up with. The one hole that we had was that mares from public auction, the influx that would come in to New York, was a marginal number.

In 2019, for example, there were only 98 mares that were bought from auction that actually came into the state of New York. If you went back six years from 2019 to 2014, the average number is right around 100.

So, we’re basically bringing in 100 mares a year from bloodstock sales, which is a tiny number. The average price of those mares was $30,000, and there was only 20 of them that were bought for over $50,000. We saw this as an opportunity that if we tweak a rule that everyone would buy into and agree with, perhaps there would be more interest in bringing more mares into the state of New York and dropping foals here, and participating in the program.

Q: The proposal opens “resident mare” status to mares purchased at public auction for $50,000 or more, or a price determined by the New York-Bred Fund, without breeding back. Why is it important to have a minimum purchase price on incoming auction mares for this rule?

Cannizzo: The $50,000 threshold is being put in place if the rule is adopted so we can attract quality mares. New York is not necessarily similar to a lot of the other regional programs. It’s become ultra-competitive. It’s based on a commercial marketplace, and you have people from all over the country having foals in New York and participating in our commercial market. The point is, we’re trying to attract quality. We’re not looking to bring $500 mares into the state of New York. We’re looking for people to upgrade their stock and for people from outside to participate with quality mares.

At the same time, this was one of the requests from our stallion population, because technically, it protects them to a certain extent. Like many other regional states, the stallion population obviously is a fraction of what Kentucky is, and the sire power isn’t necessarily the same, nor will it ever be. So, what we’re trying to do here is not devalue any of those stallions, because these mares under the current rules would be forced to be bred to the New York sires.

This is where it goes hand in hand with the commercial mar- ket and this is no different than any state, or the laws of economics for our industry – if you buy a mare of ‘X’-value, you’re not going to devalue her by breeding to ‘Y’-value stallions.

The threshold was created as such so if people are going to participate and use New York sires, they’re not going to be devalued in any sense, and if you are going to bring in a mare of significant value, realistically, you’re not going to breed her down from what her value or price point was, and you’re not going to get hurt under this circumstance.

It’s protecting the commercial market and protecting the stallions in the state of New York, and it’s the reality of our landscape.

We’re looking to take that ’20’ number [of incoming mares to New York purchased at $50,000 or more] and realistically multiply it by five times or 10 times, based on how successful it goes. The good thing about the rule is if it for some reason doesn’t work, the rule allows the Breeding Fund board to modify that initial price every year if they’d like. If the commercial landscape or the stallion industry changes, that level can go down and up.

Q: What was the scope of people who were consulted when forming the proposed rules, and how did the rules evolve throughout the feedback, if at all?

Cannizzo: This started over a year ago. There were several stakeholder meetings with all the stallion interests, key commercial breeders, our board of directors, and people that were elected into their roles by our constituents. NYRA, the horsemen, literally all participants played a part in the discussion dialogue, along with the Breeding Development Fund. It’s their rule and their proposal change as well.

What happens now, there’s a 60-day public comment period, which started on Aug. 26, and it’ll go through the end of October. That period is for anyone in the public to write a written comment to Tracy Egan, the executive director of the Breeding Fund, and those comments will be reviewed after 60 days by the Breeding Development Fund board. The board will either choose to move forward with the rule as-is, or they’ll choose to adopt some of the comments if they feel they’re necessary and modify the rule if need be.

Q: Realistically, how much could the plan change during the public comment period?

Cannizzo: Given it’s taken over a year to get to this point, there was a lot of due diligence involved with this, even the threshold number. There were a lot of analytics involved with it; it wasn’t just throwing at a dart board. You had all the participants involved in the state, and a lot of attorneys and a lot of due diligence. Realistically, people could bring up a lot of good points that we’re not aware of, but at the end of the day, there was a lot of homework done behind this, so that remains to be seen.

The problem is, if there is a justified comment to change this, it starts the process over again. Don’t get me wrong, it’ll be a dramatically shorter process, but we’ll have to rewrite the rule, it’ll have to go back to the governor’s legal review team, and then they’ve got to give us the go-ahead to re-publish it, and then there’s another public comment period based on that. We’ve got a long-term approach to this, so we want to get it right, which is why you have a process like this where anybody from the public can comment.

Q: What are the benefits of extending the time a mare can leave New York to be bred from 90 days to 120 days?

Cannizzo: The thought is that because there are so many people partaking in breeding and conceiving the foals in Kentucky for example, those foals are being forced to ship from a younger age. The thought process in having the extra month is it’s going to be better for the mares and better for the foals.

It’s just the reality of our landscape, versus when the first rule was done 40 years ago, and in the ’90s when it was modified.

The landscape has dramatically changed, and you have people that are participating in our program who want their foals at their farm, so they have to come back to New York. It’s basically allowing people to utilize the program a little more from a flexibility standpoint, and realistically, from what we’ve been told from a veterinary component, it could be better for the horses themselves.

Q: How would funds be distributed under the proposed bonus for state-sired maiden winners?

Cannizzo: This was an idea for another carrot for the stallion industry and people that are supportive of New York- sired horses. This rule was important to NYRA. They’re looking to increase our foal crops as much as we are, so they were willing to offer up $5,000 to winners in maiden special weight races if you’re New York-sired. So, New York-sired horses in open or state-bred competition, the winner’s share will be $5,000 more.

The trickle-down effect reaches the breeders, too, because if you’re the breeder of a New York-sired horse and you’re getting a 30-percent bonus for a win, now you’re getting 30 percent of $5,000 more in purse money, too. It’s the same deal for stallion awards. The 10-percent bonus for stallion awards will based on $5,000 more money.

The point is, because it’s being paid through the purse structure, it’s actually touching all the participants in that horse – the breeder, stallion, owner, and so on.

Q: Are you concerned that lifting the “breed-back” rule for non-resident mares purchased for over $50,000 might take some control away from the state’s stallion owners, since they’ll have a less captive pool to draw from than before?

Cannizzo: This is based on data and analytics. There were 20 mares that would fall under this category today, and of those mares, they were bought by stallion owners, anyway. So, the truth of the matter is that those mares weren’t going to New York stallions right now, from the bigger picture of this. What’s happening is the mares that are go- ing to be over this threshold that come in, it’s all new-found mares and participants in the program. They’re not necessarily being hurt because it’s not happening today.

At the same time, the view is if we’re increasing the mare population in New York state, those stallions have a better chance of actually acquiring or breeding to some of them down the road, too. If we’re not increasing the mare population, they won’t have a shot to begin with, so that’s another factor to this.

At the end of the day, the stallion owners; the majority of them have farms, and those handful of farms control a large percentage of the mare population themselves, so they’re participating in this as well.

The post Q&A: Jeffrey Cannizzo Of New York Thoroughbred Breeders, Inc. On Proposed Changes To State’s Breeding Program appeared first on Horse Racing News | Paulick Report.

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