Foal Sharing

Foaling season has begun, and soon the paddocks will be dotted with foals, each holding the aspirations and expectations of its breeder--a literal field of dreams. Preparation for this moment began more than the 11 months ago the mating took place, and the movement of the season toward spring means that breeders are making arrangements to take their mares to the breeding shed for next year's foal crop.


The usual foal sharing agreement stipulates that the owner of the mare and the owner of the stallion season will share the ownership of the offspring.

One of the first steps in this often arduous journey is to find the suitable stallion for the mare, taking into consideration conformation, pedigree, and the stud fee. After studying the available stallions and finding the right mate for the mare, the time has arrived to negotiate a breeding contract. With the escalating cost of stud fees, especially to secure the services of a top stallion whose popularity will help increase the probability of success either in the sales ring or in the chosen performance discipline, an option for some breeders is to consider a foal sharing arrangement.

Foal sharing, by definition, is an agreement under which a mare owner puts up the use of a mare while the stallion owner puts up the use of a season. Together, the two partners own the resulting foal with no currency having changed hands for a stud fee or lease of the mare. The practice has been a fairly common one in the horse industry.

There are several types of foal sharing agreements and, of course, variations of those types. The most usual foal sharing agreement stipulates that the owner of the mare and the owner of the stallion season will share ownership of the offspring. Usually, the foal is sold at some future time, with the two owners splitting the profit. In a variation of this type of agreement, the two parties can agree to retain the foal for some kind of performance use, then split any earnings either in the performance venue or at stud.

Another type of foal sharing agreement takes place over a period of years. This type of foal sharing can take one of two forms. In one type, the two parties might own the resultant foal from a mating in alternate years. For example, a mare is bred to the stallion and the first year produces a filly, which becomes the property of the mare owner. The next year, the mare produces a colt, which becomes the property of the owner of the stallion. The decision as to who owns which foal can be determined in any number of ways, for example, the flip of a coin. In fact, the great Thoroughbred stallion of the 1960s, Bold Ruler, was bred under this kind of arrangement. A flip of the coin decided who owned him as the offspring of a foal sharing agreement.

As a result of a variation of this kind of foal sharing agreement and a flip of the coin, the legendary Thoroughbred Triple Crown winner Secretariat became the property of the Chenery family, the owner of Somethingroyal (Secretariat's dam). The Phipps family was the owner of Bold Ruler (Secretariat's sire). A variation of this type would be if the owner of the mare had two mares he could send to the same stallion. The next year if both mares produced foals, the owner of the mare would retain one and the owner of the stallion the other. Again, the particulars of who would get which foal would need to be negotiated ahead of time and become part of the breeding contract.

A third type of foal sharing agreement entails the foal's being sold and the owner of the stallion and the mare receiving a set value that had been agreed upon previously. If the total value of the sale exceeded the sum of those two separate values, the remainder would be split equally between the two parties.

Three Chimneys Farm in Lexington, Ky., is one of the premier Thoroughbred nurseries in the Bluegrass. Its rolling green acres that border both sides of Old Frankfort Pike are home to some of the industry's best stallions and broodmares. Here reside established leading sires such as Seattle Slew (Triple Crown winner in 1977), Wild Again, Rahy, and Capote alongside promising newcomers like Fly So Free, French Deputy, and Atticus. Dan Rosenberg is the general manager of Three Chimneys and, therefore, is well-versed in the practices of the industry, including foal sharing.

As a result of his many years in the business, Rosenberg prefers to speak in generalities. He says that usually the owner of the mare will approach the owner of the stallion to arrange a foal sharing agreement. Acknowledging that most stallions owners would prefer to sell seasons at the established stud fee price, he goes on to add that under some circumstances, the owner of the stallion might be willing to enter into a foal sharing agreement. One such instance occurs when the owner has a hard time selling seasons to a stallion. In order to get a full book of mares, the stallion owner might choose to enter into a foal sharing contract so as to entice good mares to his stallion's book.

For example, a newly retired racehorse which has a very attractive pedigree and a decent race record on the track could benefit from foal sharing in order to attract the caliber of mares necessary to give him the chance to establish his reputation in the breeding shed.

Rosenberg went on to say that foal sharing is really a function of demand. If the demand for a stallion is strong enough, then the owner is less likely to agree to foal sharing.

Although some breeders might be loath to enter into foal sharing contracts, there are advantages for both the owner of the stallion and the owner of the mare. For the stallion owner, a foal share is a good way to entice good mares to the stallion. Another advantage lies in the sales ring. In most foal sharing agreements, the contract provides for the offspring to be sold with the proceeds split between the owner of the mare and the owner of the stallion. Therefore, if the stallion's sale offspring is averaging more than twice the stud fee, the owner of the stallion might be wise in settling for this type of arrangement.

For example, if a stallion's stud fee is $100,000, but his yearlings are averaging $300,000 at the sales, the owner of the stallion could realize more from splitting the price from the sale of the yearling rather than settling for the stud fee. To the above example Rosenberg adds the warning that there is also the chance that the yearling will not realize the average price. There is also the risk that the foal will not even reach the sales ring. Death or injury could take its toll. Under such circumstances, the owner of the stallion would realize nothing and would lose the $100,000 stud fee, live foal guaranteed. Such are the vagaries of the business.

The owner of the mare also gains an advantage from foal sharing. Entering into this type of contractual agreement is a great way for the mare owner to get to a stallion he might otherwise not be able to afford. In addition, there is less risk in this method since the mare owner provides no capital outlay in the form of a stud fee.

As in any business arrangement with more than one party involved, there are problems that can arise. Rosenberg compares this type of partnership agreement to a marriage. During the course of the marriage, people's circumstances change or their needs change. The same is true with a foal sharing partnership. One person might need a quick return of capital for some unforeseen reason; the other might be willing to wait for the sale so that the market value can be maximized. Rosenberg adds that these kinds of problems best can be avoided with a good, solid, fair contract, and by knowing the person with whom the contract is signed.

At Three Chimneys, there is a standard agreement that lawyers have drawn up. Most farms will follow the same pattern, and most contracts contain the same elements.

Rosenberg goes on to offer this advice to those who are thinking of entering into this type of foal sharing contract. He says that a good contract is necessary. Some can be very simple; others can be quite complex. Sometimes these contracts hold no provisions for the unknown. Therefore, there needs to be a certain flexibility in the contract, language to the effect that we have the intention to do this or that, but if this or that happens, then we will do such and such. For example, the owners might have the intention to sell the foal as a yearling in the summer sale and the contract so stipulates, but if an injury that would keep the yearling from realizing his maximum value occurs prior to the sale, and there is no provision for that unforeseen event in the contract, then one owner might force the sale of the yearling rather than wait for a more opportune time. Flexibility in the contract should provide for such instances and keep both partners happy.

The Horse Industry Handbook: A Guide to Equine Care and Management contains a section on foal sharing authored by Richard E. Vimont and Bernard F. Lovely. This section enumerates and elaborates on some of the provisions that the standard foal sharing contract should contain. Included are such items as proper identification of the parties to the contract, as well as the proper identification of the stallion and mare which are involved in the foal sharing arrangement and the ownership rights to each. Another stipulation of the contract should regard who bears what expenses. Who bears the expenses of the mare? Who bears the expenses of the stallion? Who bears the expenses of the foal? Other items that should be covered in the contract are provisions for the sale of the mare, the control of the foal, insurance on the horses involved--stallion, mare, and foal--breeding condition of the mare, and alternatives in case there is an incapacity of either the stallion or mare to fulfill the obligations set out by the terms of the contract.

Perhaps one of the most important aspects to be considered involves the disposition of the foal either through the sales ring or through racing or other competition. If the foal is to be sold, at what age will the sale take place. Another consideration is that if a reserve is to be placed on the foal, who will set the reserve. If the foal is to be raced or competed, in whose name will the foal compete and who will make the decisions as to who the trainer will be, how the expenses will be divided, what the course of the athletic campaign will be, and what will happen to the horse at the end of the athletic career.

Keeping all of these factors in mind, one also should remember Rosenberg's caveat of flexibility.

To help the prospective foal sharer, The Horse Industry Handbook also contains appendices with sample foal sharing agreements. There are sample contracts to illustrate practical application for the material contained in the foal sharing section. There is a sample for a multi-year foal sharing contract, and one for a single year foal sharing contract.

Standing with one foot on the bottom rail of a white fence and gazing into a field where mares and foals graze on tender shoots of spring grass, an outsider might not realize how much time beyond the 11 months of gestation it took to produce that good-looking chestnut colt with the white stockings or that pretty blood bay filly with the blaze and the attitude to match. They also might not realize that you already have matings planned for that mare past the year 2000.

About the Author

Tom Hall

Tom Hall is a former English professor with a BA from Georgetown College, a JD from the University of Kentucky School of Law, and an MA in English from Western Kentucky University. He is an assistant editor for Eclipse Press.

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