Computers Are Taking Over in Breeding Shed : Electronic Matching of Mares, Stallions May Revolutionize Racing Industry

Often slow to change, the thoroughbred breeding industry has gone modern--utilizing computers to match mares and stallions in hopes of producing future Secretariats and Swales.

Using the computer is a pioneering idea that has caught on quickly in the industry, but John T.L. Jones III insists he and his partner Barry Weisbord are not innovators.

“We were just in the right place at the right time,” said Jones, who founded Matchmaker Breeders’ Exchange in July 1984 with Weisbord.

Since its inception, Matchmaker has done about $65 million in business, more than half during weekly computer sales. Gross profits are more than $1.5 million.

In addition to the weekly sales, Matchmaker holds two members-only public auctions annually, at which stallion breeding seasons and stallion shares are sold. Last month’s sale grossed $17.2 million, and a non-guaranteed breeding season (live foal not guaranteed) with Northern Dancer netted $1 million.

But the backbone of Matchmaker is weekly sales of seasons and shares. About $700,000 of business is done each week.

“We realized the mindlessness of not having an organized market and just searching from one informal contact to another looking for seasons and shares,” Jones said. “It was very inefficient having to call 18 people on the phone when there were 800 players out there.”

To get the 800 people together, Matchmaker offered for a fee of $400 annually to allow breeders to link up with a computer.

At the beginning of each week, breeders offer a season at a set price. Later in the week, buyers punch in their bids.

The money changes hands through Matchmaker, which charges commissions of 2% to buyers and sellers on cheaper stallions and 1.25% for more expensive ones.

Members of the Exchange now include British horseman Robert Sangster, Greek shipping magnate Stavros Niarchos and Sheik Mohammed bin Rashid al Maktoum of Dubai, three of the top buyers at the annual Keeneland Selected Yearling Sale each July.

Farms belonging to Matchmaker include Gainesway and Spendthrift farms, two of the top breeding farms in Kentucky’s famed Bluegrass area.

Top sales during the weekly exchanges are $700,000 for a share of Sunny’s Halo and $270,000 for a breeding season with Danzig.

While making the process of matching available stallions with mares more efficient, Jones said Matchmaker has been able to create the first true open marketplace to determine the value of a particular stallion.

“There was never any open mechanism to see what a season or share was worth; now you can see it every week,” Jones said, picking up the weekly list of sales bids and offers.

Another innovation that has caught on is the sale of the non-guaranteed breeding season. Formerly, stallion owners received a fee only if the mare produced a live foal.

Now, for about 30% less, Matchmaker buyers purchase non-guaranteed seasons. That is, the money is paid at the time of the sale, not dependent on the mare producing a live foal.

“It used to be everything was sold live foal,” Jones said. “The buyer had to submit a mare to the seller so the seller could evaluate the chances of getting a live foal and getting his money.

“The non-guaranteed season has really caught. I would say we have somewhat established a new way of doing business in the industry that has been very well accepted,” Jones said.

Jones, who along with Weisbord invested about $500,000 to get Matchmaker started, said he has been pleasantly surprised at the speed at which it has caught on.

“We started and this was what we hoped would happen,” he said. “But we had no idea it would happen this fast.”