Who needs David Ellis?

[Chief Stipe]

Why NZ racing needs David Ellis

 

by Brian de Lore

Published 30 April 2023

 

An emerging problem for New Zealand thoroughbred racing and breeding over the past five years or more – its reliance on a diminishing number of high-end stakeholders to keep the hoof beats thundering in an industry operating on shaky ground.

 

The crumbling foundation of racing due mostly to a lack of incentivising prizemoney has gone on for far longer than five years, but what we are all witnessing today resembles tall poppies with weakened root systems. The most recent evidence: $10 million less spent by New Zealanders on yearlings in Book One and Two at Karaka in 2023 than the previous year.

 

The 2023 sale at Karaka held up with $13 million more spent by internationals due to an incredible run of success by New Zealand-breds in Australia and Asia over the past couple of years – thanks to the astute breeders that keep the Kiwi flag flying high in Aussie, Hong Kong, and Singapore.

 

More evidence – our foal crop this coming season will decline to almost 1970 level at which time the Stud Book finalised the foal count at 2,388. The latest figures from Wellington say 2,510 foals hit the ground last spring in 2022, but we are also confronted by a continuing annual trend of fewer mares bred as each year passes.

 

The Stud Book says the 4,565 mares covered in 2021 contracted to 4,293 in 2022.

 

At the beginning of this millennium, the NZTR equivalent had conducted 2,945 races in the season ending 1999/2000. Last season that number had reduced by 20 percent to 2,356. The growing scarcity of the owner has gradually shrunk the number of horses in work and races run.  

 

The year Sir Tristram went to stud in 1976, he became one of 28 first-first-season sires from a total of 359 registered horses in the NZ Stallion Register. In the 2022 publication, only 133 stallions appeared in the same but much thinner register of which only five made their debut.

 

Sir Tristram emerged from the pack of 28 to be Champion Sire, a numbers game traditionally said to give you one chance in 14 or 15 for a stallion to make the grade. In the three springs of 2020 to 2022, only 13 new stallions in total have debuted their stud careers in NZ – how does New Zealand in the future sustain its Australian group one record when the numerical challenge becomes so daunting?

 

The thoroughbred breeding business underpins the entire structure upon which yearling sales and then racing draws its race fields on which punters bet, from which percentages are devolved into stakes money. But static prizemoney and rising costs for the owner have disincentivised reinvestment, so the medium-sized or small trainer now goes to the sale without an order, or he/she stays home and watches the sale on Trackside.

 

This recidivous cycle of annual thoroughbred decline has gone on for almost 40 years since my day at Ra Ora Stud when the national foal crop of 1986 hit a high of 6,112 foals. From that point in history, we have witnessed a foal crop decline of 60 percent.

 

A few stalwarts have stayed strong in the arenas of racing, yearling sales, and breeding, and can rightly be described as thoroughbred industry linchpins, and heroes. They are people like David Ellis, Albert Bosna, Graham Rogerson, Stephen Marsh, Tony Pike, Roger James, Sir Peter Vela, Garry and Mark Chittick, Gerry Harvey, Mark Chitty, Nelson and Rodney Schick, John Thompson, Sam Williams, Brent and Cherry Taylor and in more recent times Brendon & Jo Lindsay, Lib Petanga and Luigi Muello.

 

Take those names out and the New Zealand thoroughbred industry ceases to exist, unlike years gone by when a broader and stronger bench of domestic buyers bought yearlings from three times as many individual vendors supplying the offerings from a much wider range of stud farms.

 

David Ellis has strengthened his position over the years as others have fallen off the pace or gone by the board, and as the leading buyer at Karaka for the 18th consecutive year in 2023, his racing successes have increased and the industry has become more and more reliant upon his continued involvement.

 

DC Ellis the most prolific yearling buyer in NZ history

 

Since 2008, David Ellis has purchased 421 yearlings for Te Akau from the Premier/Book 1 Sale and easily become the most prolific buyer in National Sales history – by miles. No one has bought more or had his sustained longevity, and in 2023 we have reached the point where we need to recognise the importance of the role he plays.

 

I called New Zealand Bloodstock CEO Andrew Seabrook who has witnessed DC Ellis buying over many years. He responded this way:

 

“It is plain for all to see the hugely significant impact that David Ellis has had on the National Yearling Sales at Karaka over a sustained period of time. There wouldn’t be another jurisdiction in the world where one person has had such an influence on a yearling sale’s turnover. Despite prize money being way off where it needs to be, David and Karyn’s ability to attract new people to the game, whilst at the same time taking on significant financial risk, is quite amazing.”  

Te Akau has strengthened against a weakening trend (look at the graph) which is remarkable, and racing’s survival badly needs Ellis just as it needs others doing their best such as Go Racing’s Albert Bosna, Stephen Marsh, Roger James, etc. They are all to be admired for their work rate and persistence in seeking to annex the best races on the calendar.

 

All these people need each other to survive in the thoroughbred industry. Everyone who supports the industry in one way or another should be applauded, and those getting out can’t be blamed but it weakens the base for those remaining in their diminishing numbers.

 

Passion and hard work seem to be the common denominator amongst all those forging on regardless of the rocky thoroughbred landscape to which they look out at each morning.

The moral of the Jack Macky story

 

It reminds me of a story Joe Walls told me about the late, great breeder, Jack Macky who stood Champion Sire Le Filou at Pirongia Stud near Te Awamutu. Le Filou swept all before him from the mid-1950s and became champion sire in various categories on 10 occasions. But like all great sires, the end came one day, in Le Filou’s case the year of 1969.

 

The replacement sire for Le Filou arrived for his debut season in 1970 – his name, Headland II. One day in the mid to late 1970s, Joe Walls phoned Jack and inquired about Jack’s well-being. Jack said he was okay, but the day had started very poorly, but he had recovered and was okay now.

 

When Joe asked Jack about what caused his bad start to the day, Jack’s dry sense of humour came to the fore when he replied that he had woken well and early, looked out the window after drawing the curtains, and had seen that Headland II was still alive in his paddock– Headland II by then had established himself as possibly the worst sire ever to stand in New Zealand.

 

He ruined many of Jack’s well-bred Le Filou mares and the best horse Headland II ever sired after the best of opportunities, won five races over hurdles – he managed a handful of minor winners but never a stakes winner.

 

The moral of the story: The giddy heights of Le Filou can sink to the dark depths of Headland in one year if the bird falls off your shoulder – it fell dead of Jack’s, but Jack as a breeder once again invested in and relied upon one stallion.

 

The risk of spending $millions on yearlings without owners

 

In the yearling ring every year, David Ellis will purchase as many of what he considers the best yearlings in numbers as high as he dares to commit himself financially – he knows the chances of success diminish if you rely on a small pool of horses, but he also knows that buying horses without owners will sink you if can’t find the owners and pay the New Zealand Bloodstock invoice – this year $6.3 million for Book One alone.

 

He has become accustomed to the risk. In the past five Karaka Book Ones, DC Ellis has bought 157 yearlings for $36.35 million, more money spent than the next five best New Zealand buyers combined. When he returns home after a yearling sale, Karyn and David go into action to syndicate every horse – this year 31 from the two books at Karaka and a further nine from Magic Millions on the Gold Coast ($Aus2.7m).

 

They do more in three or four months after each sale to bring new owners into racing than NZTR has done in its entire existence. David bought his first horse in 1983 and did his first syndication in 1986 and has led the way in NZ in changing the face of ownership. Thousands of new owners cheering home the tangerine and blue exist through Te Akau’s escalating success.

 

The last four years of Horse of the Year titles came through DC Ellis purchases in Melody Belle (2) and Probabeel (2), and the 2023 winner is almost certainly going to be Imperatriz to give Te Akau five in a row. Then consider Te Akau has won seven consecutive Karaka Millions 2yos, going for number eight in 2024, has notched 358 black-type successes, and is closing in on 90 group one wins.

If we look at who’s driving what’s left of New Zealand racing; it’s not NZTR, it’s the syndicators and a few trainers who go out looking for owners – Te Akau, Go Racing, Stephen Marsh, Roger James, and Wexford – the five biggest NZ buyers at Karaka in 2023. The bloodstock agents also do a pretty good job operating both domestically and internationally.

Recent inflation has not treated racehorse owners well in the equation of training costs against potential returns, which is why syndicates purchase five and 10 percent shareholdings – syndicates within syndicates to give thousands of small shareholders a sense of ownership.

         *         *          *          *

On the prospect of increasing prizemoney, the signing of the TAB NZ-Entain partnership occurred five weeks ago but has yet to be ratified by Minister of Racing, Kieran McAnulty. Why?  

Could a fundamental problem exist with the deal in the form of contingencies dependent upon geo-blocking Kiwi punters in a one-only betting shop monopoly?

I’m only guessing on that one, but for some reason, the Minister hasn’t yet signed it off. We know that the TAB wants geo-blocking, the Government wants it, and for a more lucrative profit margin, Entain will want it.

The punters certainly don’t want it. In our supposedly democratic, freedom-of-choice country which I refuse to call anything but New Zealand, geo-blocking is almost certain to conflict with the New Zealand Bill of Rights 1990.

 

 

[nod]

Beware the stallion stats--a lot fewer sires are needed today, not just for the reduced numbers of mares but more the numbers each stallion serves,. In the days of Le Filou 45 was a full book, now its 150 and more,

In Ireland one managed 500 -methinks the Guiness had a hint of blue.

[Reefton]

From where I sit the moral of that story is that the racing industry might need one D Ellis but the breeding industry needs him and effing sight more!

[The Centaur]

Its taken the great Messara advocate more than 5 weeks to respond to anything about the Entain deal. Most noticeable is that he hasn't given any reasons for supporting it or breaking down the deal into how its going to operate. Why the silence? Given his previous pieces I would have thought he would be shouting from the roof tops about it.

[Bill]

Talk going around that Mark Walker is moving to Victoria to set up a Te Akau operation and one of the young assistant’s will train the NZ arm of the operation. Heard it from a few different people now

[Freda]

7 hours ago, Bill said:

Talk going around that Mark Walker is moving to Victoria to set up a Te Akau operation and one of the young assistant’s will train the NZ arm of the operation. Heard it from a few different people now

The only surprise is that it hasn't already happened.

[Freda]

7 hours ago, The Centaur said:

Its taken the great Messara advocate more than 5 weeks to respond to anything about the Entain deal. Most noticeable is that he hasn't given any reasons for supporting it or breaking down the deal into how its going to operate. Why the silence? Given his previous pieces I would have thought he would be shouting from the roof tops about it.

Probably, because he doesn't KNOW how it is going to operate.   If Sharrock claims not to know any 'detail'  htf will anyone else?    It is, as far as I understand, a legal requirement to get buy-in from the codes before anything else happens.

[Chief Stipe]

9 hours ago, Reefton said:

From where I sit the moral of that story is that the racing industry might need one D Ellis but the breeding industry needs him and effing sight more!

The industry needs more than one David Ellis but it hasn't had two for at least a decade.

[Reefton]

3 hours ago, Freda said:

The only surprise is that it hasn't already happened.

Exactly

Just like the Baker Forsman stable.  Feed your promising ones straight to Aussie

 

[Reefton]

1 hour ago, Chief Stipe said:

The industry needs more than one David Ellis but it hasn't had two for at least a decade.

Baker Forsman is probably just as successful if not more especially if you apportion on the basis of yearling spend.  They just don't blow their own trumpets or hog the camera that's all

But I don't see why NZ Racing particularly needs D Ellis.  If he wasn't winning the big races someone else would be.

As I said the breeding industry are the ones who need David Ellis and even if he wasn't there then we would probably see a lot more Aussie's here without them having to compete with his buying power.  And maybe a few more locals stepping up.

Currently he seems to have a monopoly on the top lots(I am not bemoaning that stating a fact - he has the balls to put the money up then good luck to him)

De Lore's comments re David Ellis taking all the risk however..... You would be a bit naive to think he has no committed parties(if not vendor shareholders) when he buys for those stallion syndicates.  I no longer look at his(any anyone else's) websites but what used to strike me was how many Te Akau yearlings had 100% sold on them as soon as they were posted.

 

 

 

 

 

[nod]

There seems to be a lot more promotion of Te AKau this year --not just Trackside TV but heaps of full page ads in he N Z Herald.

[Chief Stipe]

1 hour ago, Reefton said:

Baker Forsman is probably just as successful if not more especially if you apportion on the basis of yearling spend.  They just don't blow their own trumpets or hog the camera that's all

Baker/Forsman no longer are a training partnership.

[Chief Stipe]

1 hour ago, Reefton said:

As I said the breeding industry are the ones who need David Ellis and even if he wasn't there then we would probably see a lot more Aussie's here without them having to compete with his buying power.  And maybe a few more locals stepping up.

So effectively less competition would allow more Australians and presumably Asians to take more of our best bred yearlings offshore?  Not only does that defy market forces but is very short sighted.  Ellis doesn't win the auction on every horse he bids on.  Further Te Akau also bid at Ozzie auctions albeit predominantly the better value Magic Millions.

[Chief Stipe]

1 hour ago, Reefton said:

Currently he seems to have a monopoly on the top lots

That's not correct.  Ellis only secured three of the top 21 lots in Book 1 this year.  Four went to Hong Kong.

[Chief Stipe]

1 hour ago, Reefton said:

De Lore's comments re David Ellis taking all the risk however..... You would be a bit naive to think he has no committed parties(if not vendor shareholders) when he buys for those stallion syndicates.  I no longer look at his(any anyone else's) websites but what used to strike me was how many Te Akau yearlings had 100% sold on them as soon as they were posted.

Granted Te Akau's mitigates it's risk by securing commitments prior to, during and after the sales.  Understandably given their success they have a long list of willing syndicate members.

However a few years back that wasn't the case and I've been told that Ellis put at risk $20m of his own to fund purchases.  Yes you are correct in your inference that if Ellis failed then a lot of big breeders would be hurt as well.  Although that contradicts your assertion that others would fill the gap if Ellis wasn't there.

[Freda]

18 hours ago, Chief Stipe said:

Granted Te Akau's mitigates it's risk by securing commitments prior to, during and after the sales.  Understandably given their success they have a long list of willing syndicate members.

However a few years back that wasn't the case and I've been told that Ellis put at risk $20m of his own to fund purchases.  Yes you are correct in your inference that if Ellis failed then a lot of big breeders would be hurt as well.  Although that contradicts your assertion that others would fill the gap if Ellis wasn't there.

I think the gap would be filled...but those horses, generally, would be lost to NZ.   We get to see some lovely animals race here, that wouldn't be happening without T.A IMO.

[Huey]

3 hours ago, Freda said:

I think the gap would be filled...but those horses, generally, would be lost to NZ.   We get to see some lovely animals race here, that wouldn't be happening without T.A IMO.

The question is though , should that cut of a horse really be racing here in $14k races or piss poor Saturday stakes for the prices paid for them?

It's a joke , the KM a prime example. I know I'll get CS fanboy mode here how everyone can buy them if they want to etc etc etc but in reality the quality of horse they are racing in NZ distorts the landscape considerably imho.

[Reefton]

22 hours ago, Chief Stipe said:

Baker/Forsman no longer are a training partnership.

We are well aware of that but people know what I mean.  If I had said Forsman you would say he has only been going a year

But your close personal mates at TA insist on telling us all the time how many 2000 Guineas 'TA' has won or how many consecutive Karaka Millions 'TA' has won.  They never mention the number of different trainers have been at the helm when those races were won.

If you want to play games don't change the rules for different players

 

[Chief Stipe]

43 minutes ago, Huey said:

It's a joke , the KM a prime example. I know I'll get CS fanboy mode here how everyone can buy them if they want to etc etc etc but in reality the quality of horse they are racing in NZ distorts the landscape considerably imho.

So what's the solution?  Cut the tall poppies down, tax more, levy more and strengthen the monopoly? 

[Chief Stipe]

43 minutes ago, Reefton said:

We are well aware of that but people know what I mean.  If I had said Forsman you would say he has only been going a year

But your close personal mates at TA insist on telling us all the time how many 2000 Guineas 'TA' has won or how many consecutive Karaka Millions 'TA' has won.  They never mention the number of different trainers have been at the helm when those races were won.

If you want to play games don't change the rules for different players

 

Murray Baker is an excellent trainer - I don't think anyone would question that.  It has often been mentioned he had a high attrition rate - very much in the Gai Waterhouse mold.  Work them hard and if they don't stand up to the training regime then sack them.

However why bag Te Akau for their successful model?  At the end of the day the proof is in the on track performance of the stable.  That record speaks for itself.

[Special Agent]

We are a country of knockers that is for sure.  There are different ways to train and achieve a similar result as you cited Murray Baker vs Te Akau.  Both are/were successful training models.

I agree with Huey that the landscape is distorted.  I also think the value of bloodstock is inflated.  When you watch the struggle at the supermarket with limited funds and having to put items back on the shelf it is disheartening to see the ridiculous amount of money spent in and on racing.  Companies only have to know you own a race horse to bump up the price of it's requirements.

What would happen if there was no David Ellis?  The void would be filled, auction prices may drop, the training and riding premiership would look different but racing would continue in some shape or form.

[Reefton]

6 hours ago, Chief Stipe said:

Murray Baker is an excellent trainer - I don't think anyone would question that.  It has often been mentioned he had a high attrition rate - very much in the Gai Waterhouse mold.  Work them hard and if they don't stand up to the training regime then sack them.

However why bag Te Akau for their successful model?  At the end of the day the proof is in the on track performance of the stable.  That record speaks for itself.

I never bagged Te Akau at all.  I just don't hero worship them like some.  I have had a horse with them in my time(admittedly only a ten per cent share) which worked perfectly satisfactorily, whilst I wouldn't say we live in each others pockets the Richards(parents) are friends of ours and I hugely admire Jamie's achievements.  While I don't know Mark Walker at all I do recall once walking past him and being greeted with a grin and a 'how ya going?' which contrasts with some people's claims he is grumpy or ignorant.  Karyn Fenton Ellis was ALWAYS pleasant and happy for a bit of a chat and so was David the one or two times I spoke to him.  It was an expensive exercise but I went in with my eyes open and plenty might say a trip to the Accountant is an expensive exercise.

Te Akau have even(on occasion) supported Reefton and God knows I appreciate (that and every other operation that chooses to attend our meeting)

David Ellis obviously takes massive risks at the sales so good luck to him but please please please don't tell me NZ Racing would collapse if he stopped his racing activities tomorrow.  Nor should any credence be given to the claims that Te Akau has won so many(not sure) KM's in a row.  There were two different trainers and in the case of the number of 2000 Guineas wins there have been four different trainers or combinations(including the Autridge/Richards combo).

There are a lot more serious issues in NZ racing than whether there is a risk Te Akau will cease trading.  Equally I can understand where De Lore, clearly a breeding industry fan, is coming from in asking what the breeding industry would do without David.

At one stage you could have looked at the yearlings sales and asked what the hell would they do without Patrick Hogan.  Much as he deserved all the accolades he received when his operation's influence began to wane after Zabeel finished others stepped up.

Whether Murray Baker was tough on his horses I have no idea but he has had some bloody good ones off a lot smaller budget that others.  Plus he would appear to have been an outstanding judge of a young horse and whether it is Aussie material at a very early stage.  Andrew Forsman seems to have inherited the knack.

And finally have a look on Gavelhouse - not every hot priced sale graduate that ends up  in the TA regime ends up with its name in black type.   That is a the nature of the game - if we knew which was going to be the best horse Sheik Muhammed(or however you spell his name) would have everything and we would have nought - to be fair if you read the TA advertising you would think there was a virtual guarantee of a share in a G1 top liner instead of the perhaps 5% chance in reality.

 

 

 

[Chief Stipe]

2 hours ago, Reefton said:

to be fair if you read the TA advertising you would think there was a virtual guarantee of a share in a G1 top liner instead of the perhaps 5% chance in reality.

If you took a share in one of TA's Magic Millions purchases you would have a 17% (1 in 6) chance of winning a black type race.

[Reefton]

16 minutes ago, Chief Stipe said:

If you took a share in one of TA's Magic Millions purchases you would have a 17% (1 in 6) chance of winning a black type race.

well all right

Give us a demo and lets see how easy it is.

Presumably they are there at the moment and have done some buying.  Nominate your pick from the nags and let us know - somewhere down the track we will all be able to marvel at your wonderful judgment.

But then again there is another possible conclusion about your judgement ........

 

 

 

[Chief Stipe]

1 hour ago, Reefton said:

well all right

Give us a demo and lets see how easy it is.

Presumably they are there at the moment and have done some buying.  Nominate your pick from the nags and let us know - somewhere down the track we will all be able to marvel at your wonderful judgment.

But then again there is another possible conclusion about your judgement ........

Are you suggesting I select one horse from the yearlings that Ellis bought at the Magic Millions?

Of the Magic Millions January 2023 purchases I didn't really like any but choosing one I'd go for the Zousain-Liesele filly.

H.

 

Zousain (AUS) / Liesele (AUS) 2021 Filly

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