Finding the gain: A wide range of service fee incentive schemes on the table

Cover image courtesy of Widden Stud

Over the past few months, our Breeding Drain or Racing Gain series has unpacked some of the most pressing structural challenges facing Australian racing and breeding. But diagnosis is only half the story, so Finding the Gain now unpacks possible solutions - ways to reduce cost, improve upside, and give breeders the confidence to keep mares breeding rather than empty.

Some reforms, such as reshaping Classic races or recalibrating prize money, will require systemic change from leadership. Others, though, can come from within the industry itself, through creativity, flexibility, and a willingness to back breeders.

From innovative foal-share structures to extended payment terms, stallion farm initiatives reflect both competition among farms and a recognition that the long-term health of the breeding sector depends on keeping breeders engaged.

Widden: No Risk, All Reward

Widden Stud recently announced their ‘No risk, all reward’ incentive for 2025 and is available to 11 of their 20 stallions across NSW and Victoria. Described as a foal share but with a different risk profile for breeders, the deal means that a breeder won’t pay the service fee until the foal is sold at auction.

In the deal, the breeder is guaranteed the first $25,000 of the sale price, then pays the advertised service fee, with any remaining income on the sale split 75% to the breeder and 25% to Widden Stud.

“It'd be fair to say we've commented on a few of the stories that (TTR) have written highlighting the difficulties around for the breeding industry with sales returns and falling foal crops, so we wanted to incentivise breeders to have some confidence and to have less risk,” said Widden’s Matt Comerford.

The deal transfers some of the risk to Widden, because they won’t get paid a service fee until the resulting foal goes through an auction ring, and as many breeders understand, there are plenty of reasons why this doesn’t always happen.

“It's a similar agreement or deal that we've did a few years ago for one particular stallion and got good numbers with good success, but we wanted to add depth and variety because not everyone likes one particular horse. Not every broodmare suits that one horse so we took that model from a good few years ago and improved it.

“We increased the initial return to a breeder, and in the second portion, we're increasing the percentage that the breeder gets so the deal is structured to incentivise breeders. It's for the breeders, and hopefully be able to stop the foal crop drop with many mares sitting in the paddock and not being used this year.

“The $25,000 guarantee to the breeder on sale and the split after paying the service fee is a lot better (for the breeder) than a standard foal share.”

In a standard foal share agreement, the owner of the mare doesn’t pay a service fee, and instead takes on the risk of paying for 100% of the foal’s cost, with the sale price split evenly between breeder and stallion owner once the foal is sold.

In both a standard foal share agreement and in Widden’s No Risk, All Reward deal, the stallion farm doesn’t get paid for over two years from point of conception to yearling sale, impacting their cash flow, hence the different payout profile. For a breeder, their initial costs are reduced by not paying a fee on a 42 day pregnancy test, and their actual overall cost and return is dependent on the sale price of the foal.

“There are always different ways to look at foal shares. If a horse stands in a risky year for the stallion farm, then it can be a benefit to both parties, but if a stallion has good commercial demand, then people are willing to pay the nomination without a foal share.”

Initially announced for Anders, Dirty Work, Doubtland, King Colorado, Portland Sky, and Russian Camelot, Widden added Bruckner, Gold Standard, Nicconi, Rebel Dane, and Supido to the list this week. The idea is to assist the middle of the market.

Willingness to take a risk

Most of the other large stallion farms concur with the idea that for stallions who have strong commercial demand, there isn’t the need for incentives or foal shares to encourage breeders to be involved. Both Arrowfield and Coolmore told TTR they offer their stallions at good value fees for the market.

“We offer the best prospects and proven sires at the best value for money for breeders,” said Coolmore’s Colm Santry. “Pride Of Dubai, Pierro, and So You Think are three proven sires who have sired 33 Gr.1 winners between them, and all standing for under $40,000.”

Darley had a similar comment. “Our roster is in a strong position, which we feel lucky to have,” said Alastair Pulford. “Our horses are priced competitively, and while we do discount a few of the second and third season sires, we are confident in our roster.”

Yulong’s approach to helping breeders out is in the realm of pricing stallions for the market conditions, particularly in the middle sector.

“Seven of our 11 stallions are under $20,000. We’ve looked at the Australasian breeding market and made our fees reflective of that, and the response to our fees has been positive and reflected in each stallion’s bookings,” said Yulong’s Harry King.

“Our first season sires have been naturally popular, and people have also noted that they want to use our second and third season horses off the back of our own support of them, and we feel we’ve priced our horses at good value.

"We are very proud to note that every stallion on our roster with runners has had a stakes winning 2-year-old in their first crop, which is a point people mention when they call us about stallions, and it’s a reason that breeders are ensuing they have at least one of our sires represented in their upcoming sales drafts.”

Lowering risks from a different angle

Swettenham Stud in Victoria introduced their Breeder Protection Scheme this year.

The scheme extends a free return to their stallion for the first three months of a foal’s life, rather than 24 hours as is standard in many contracts.

“It’s something we’d always done anyway, but we’ve formally added it to contracts now. It’s a massive investment to breed horses, and we are ‘pay on live foal’ (terms and conditions), but as soon as the money changes hands, there is still the risk that something can wrong with a foal, so this (scheme) allows people to stay in the game. We do the right thing by them, especially small breeders with one or two foals,” said Marcus Heritage.

“It doesn’t necessarily add new breeders to the game, but it’s definitely helping out our current clients. If we can play our role in keeping people in the game, that’s helping everyone.”

Swettenham Stud have four stallions for 2025, led by Toronado (Ire) and joined by Wooded (Ire), Lofty Strike, and I Am Immortal.

Incentives are targeted for the middle of the market

Widden’s No Risk, All Reward scheme is purposefully targeted at the middle of the market, and is only available for 11 of their 20 stallions ranging in fee from $5,500 to $16,500 including GST.

“This scheme is designed to sway the percentages in favour of the breeder in the middle of the market. It's a great way to incentivise them to want to breed or potentially change their mating plans to have the upside,” said Comerford.

“We’ve got Dirty Work and Doubtland in a similar vein, with plenty of numbers coming through, or a horse like Rebel Dane or Gold Standard who are both proven from small numbers and now have stronger numbers coming through.

“There are plenty of options, but we are being selective on the mares too. It’s not just a free for all. We want to match up the mares as much as we can with our mating analysis and pedigree analysis, to create a foal that will benefit both the breeder and the stallion, and I think that's important.

“Nicconi is an unbelievable proven stallion with 73% winners to runners and over $100 million in progeny earnings. He’s perfect for setting up a young mare, and this is on the verge of being too good a deal. We initially offered five or six stallions, and we’ve just opened it up for four or five more to help breeders access the scheme across more variety of choice.”

And it’s working, according to Widden. “It’s been unbelievably popular with the number of inquiries we’ve had, and nearly every single person whose called has been sitting on the fence about breeding their mare or were not considering sending her to stud at all this year.”

But what’s in it for Widden?

Isn’t the deal too good to be true?

“A few people have asked, ‘what’s the catch?’ For us, we get the upside of support for our horses, and hopefully some of these stallions can kick a goal, then we get good overs later.”

Essentially, it helps Widden avoid the Rebel Dane situation for many of their stallions. He sired G1 Golden Slipper winner Fireburn in his second crop from only small numbers but had only 15 foals in his next two crops.

“When he came to Widden, he almost had to start again. He got a second crop Slipper winner, then he’s got less than 15 foals coming in the next two years, which just puts the brakes on. Now he has bigger crops coming through,” said Comerford, hinting that Rebel Dane is posed for greater success if his larger crops perform like his early small crops did.

“Breeders have choice around their own agistment, they don’t have to board at Widden, and they can put the foal through any sale with anyone’s draft that they select. We've tried to design the scheme to make it successful for breeders, to be as cost-effective and hopefully profitable as possible for our clients.”

Payment on live foal and other extensions

Many farms offer different payment plans, with Vinery offering breeders contracts which are payable on live foal, not at a 42-day positive pregnancy test, like many standard contracts.

“Our stallions are on live foal payment terms, which has been the case for five years, and we feel that allows breeders extra time to get organised in a time when costs are high. The timing of payment allows breeders to get any proceeds from sales earlier in the year. The response has been quite positive, and breeders often comment that they like this term as it makes a big difference,” said Harry Roach from Vinery Stud.

The timing is designed to help breeders manage their cashflow.

“We try to offer as much flexibility as we can to support breeders because that’s important for the longevity of the industry.”

Newgate Farm with 16 stallions standing in 2025 had a similar mindset.

“We have tailored packages depending on past support for our stallions and for our long term clients," said Henry Field.

"We have different incentives and packages that we roll out to our customers. We did a deal with Brutal a few years ago, which swayed the scales for him, and all those people who used him then are now the benefactors of him siring Nepotism and others from his first and second crops."

“It’s something we are mindful of, and we understand that breeders need to be profitable to keep the wheels turning in the industry.”

The upshot for breeders is that deals are out there, and any deal should be thought about from a risk vs reward point of view for a breeder’s own situation. And the beauty of the Widden deal is that any breeder already contemplating using one of their stallions now has a new approach to think about.

In a season when breeders are becoming scarce and the foal crop continues to drop, any initiative that makes it more attractive to have a foal than to leave a mare empty must be good for the wider industry.

If you would like to contribute to this series - especially as we turn to discussing solutions, send your thoughts or ideas to vicky@ttrausnz.com.au.