Equine industry keeps a close tab on Dubai debt crisis

Equine industry keeps a close tab on Dubai debt crisis

Equine industry keeps a close tab on Dubai debt crisis

BOGey NIGHT: Golfers teeing off at the course against the shimmering backdrop of Jumairah Island Towers, in Dubai. AP

The emirate’s ruler, Sheik Mohammed bin Rashid Al Maktoum, and his family have been among the highest spenders at major American thoroughbred auctions dating to the 1980s, often paying millions of dollars for top bloodstock even during market downturns such as the current one.

It was unclear what effect the country’s debt crisis would have on the sheik’s horse racing and breeding interests and whether the American thoroughbred market would feel any repercussions.

“We’ve seen no sign that it’s going to have any impact, and we certainly hope they’re able to work their way through the situation,” said Nick Nicholson, President of Keeneland, a Lexington racetrack and auction house where the sheik is a major horse buyer and regularly attends sales.

Sheik Mohammed has been a longtime horse enthusiast. He is one of the world’s premier endurance riders and is married to Princess Haya of Jordan, President of International Equestrian Federation.

In 2001, he bulked up his horse operations in the United States with the purchase of Jonabell Farm in Lexington. Among the top stallions stabled there are 2007 Kentucky Derby winner Street Sense and his sire, Street Cry, 2006 Preakness winner Bernardini, and Medaglia d’Oro, who sired Rachel Alexandra, winner of this year’s Kentucky Oaks and Preakness Stakes.

Oliver Tait, Chief Operating Officer at Jonabell, declined to comment about the debt crisis except to say that operations at the farm hadn’t changed.

Business as usual

“It’s business as usual,” Tait said. “Our object has remained the same. We’re carrying on.”

Seven horses owned by the sheik’s Godolphin Racing stable have run in the Kentucky Derby, including Desert Party and Regal Ransom this year. The highest finish for a Godolphin horse in the Derby is sixth, by China Visit in 2000.

Mohammed’s goal of winning a Derby has been amplified in recent years with some record-shattering purchases of not just stallions but also mares, including Playful Act, which he bought in 2007 at Keeneland for an unprecedented $10.5 million.

“Sheik Mohammed obviously has a passion for thoroughbred racing,” said Case Clay, President of Three Chimneys Farm in Lexington. “I’m guessing the money he’s using to buy is small potatoes compared to what’s going on over in Dubai. If it all falls down in Dubai, I think he still has disposable income to enjoy horse racing.” In this month’s recently concluded Keeneland sale, however, neither Mohammed nor his representative John Ferguson participated, even though the sale featured the dispersal of about 150 horses that belonged to the great Kentucky horse breeding operation, Overbrook Farm.

“I think many of us were surprised given some of the pedigrees we were selling,” said Ric Waldman, who served as Overbrook’s stallion consultant.

Waldman said he didn’t know if the sheik’s absence from the November sale had anything to do with the debt crisis. The influence of Dubai on horse racing extends far beyond the sheik’s individual interest. Last year, a company headed by one of his close associates purchased Fasig-Tipton, the other major horse auction house in Lexington.

Dubai each year also hosts the world’s richest horse race, the Dubai World Cup. A world-class racecourse seating 60,000 people is being planned for next year’s event.
Meydan, the company spearheading that project, also is a top sponsor of next year’s World Equestrian Games in Lexington. Jamie Link, CEO of the World Games 2010 Foundation, said he expects Dubai’s financial troubles will have no effect on that commitment.