By BRUCE SCHREINER
Updated: February 23, 2021 11:00 AM
Created: February 23, 2021 10:58 AM
LEXINGTON, Ky. (AP) - Three prominent Kentucky horse farms challenged a rule Tuesday aimed at limiting the number of mares that a thoroughbred stallion breeds each year, calling it an anti-competitive restriction that threatens to disrupt the breeding industry.
The farms filed a federal lawsuit in Kentucky that takes aim at the "stallion cap" adopted by The Jockey Club in the spring of 2020. The rule effectively restricts thoroughbred stallions from breeding with more than 140 mares each year, the suit said.
The suit warns of the rule's deep ripple effects in Kentucky and beyond in the highly competitive, high-dollar thoroughbred industry.
As a result of the rule, The Jockey Club won't register foals that aren't produced from breeding sessions with those first 140 broodmares, the suit said. That lack of registration "completely devalues" a thoroughbred because it can't compete in races or breed with other racehorses, it said.
"As a result, the highest quality thoroughbred horses will be bred less times than market economics would otherwise dictate," the suit said. "Hundreds of millions of dollars of stud fee revenues will be impacted; all owners of mares will pay higher prices to breed their mares; and less well-connected owners of mares will be precluded entirely from access to high quality stallions."
The rule also risks undermining the value of thoroughbreds in the U.S. and could drive the best stallions to countries with no such breeding cap, the farms said.
The suit was filed by three of Kentucky's biggest stud farms - Spendthrift Farm, Ashford Stud and Three Chimneys Farm. Defendants are The Jockey Club and executives with the Kentucky Horse Racing Commission. The suit claims the commission unlawfully delegated power to The Jockey Club and contends the rule violates the state and federal constitutions as well as antitrust laws.
The Jockey Club declined to comment on the suit Tuesday. The state horse racing commission said its legal team "looks forward to addressing these issues in the litigation process" but declined additional comments, citing its policy regarding pending litigation.
B. Wayne Hughes of Spendthrift Farm said in a release that the stallion cap amounts to a "blatant abuse of power that is bad law, bad science and bad business."
The plaintiffs said there's "no scientific basis" to support The Jockey Club's argument that the rule change was necessary for the health of the thoroughbred breed or to promote genetic diversity.
Forty-two stallions in the 2020 breeding season were bred to more than 140 mares, they said. The cap means excess demand will move on to less commercially appealing stallions, making it more difficult for breeders to be profitable, they said.
If the rule had been applied in 2019, the breedings of 43 stallions would have been restricted and tens of millions of dollars in stud fee revenues would have been affected, the suit said.
In 2019, auction sales of thoroughbred horses in the U.S. totaled more than $1.075 billion, the suit says. On the breeding side, roughly 20,000 thoroughbred foals are born annually in North America, it said.
(Copyright 2021 by The Associated Press. All Rights Reserved.)