Episode 23 - NCHA Hall Of Fame & $495K-Earning Stallion LBR Hangem Syndicated

Morning, everyone. This is Melanie Smith at Scylla Select. Today, we are here to talk a little bit about LBR Hang'em and the syndication that we did last week. I've got Don Ham here, who's one of our owners, and Shadi, and on our stallion management team. And I think today we just want to spend a little time kind of discussing the syndication. I know there was, I know the day we released it, unfortunately for you and Ty, I put y'all's phone numbers on there. Yeah, with no warning. I'm like, Mel, did something happen? I, we kind of, this all came about pretty quickly. And once we got all the documents and everything together, we, I was like, okay, everyone, we're announcing it. And I don't think I really explained to Ty and Dawn what that was going to entail for this.

Because we, we did our announcement and I put their phone numbers on it. And I don't think that their phone stopped ringing for about 48 hours. Yeah, it's still going. I'm still I'm still getting a few calls every day. Yeah. So the response was really good. And and what I would like to do today is kind of explain to our industry. What is a syndication? What's the why behind a syndication? And and Don, you and I'll talk a little bit about why we chose to do it with this horse in particular. And so I'll give a little bit of background on it. I've got to give the credit on this one to Matt Whitman because Matt follows the thoroughbred industry so close. He's always reading all the articles about it and follows it every day, every sale, every news announcement.

Matt's been a part of syndicates his entire career, and so he's been a part of the Corona Cartel Syndicate, First Down Dash, and Valiant Hero, and all of those. But then he always watches the thoroughbred syndicates, and the thoroughbred world is ahead of all of us, including the quarter horse racing world, on kind of how they structure these syndicates. And so they have played with some different structures on them. And one that they've done that we really liked was what we modeled shotties off of, which is where we have X number of syndicate members, which in shotties case, we did 50. And those people get a breeding a year, but they also get to participate in the revenue on the horse. And so that had been a very successful model that hadn't been done a lot, but was relatively new in the thoroughbred world.

And so Matt was like, we really need to try this on a horse in our industry. And I think, and I'll let you speak to this a little bit, Dawn. I think for me, it was like, we have this horse that, and a lot of people use like once in a lifetime loosely, but I think we all know we might, we hope we do, but you and I might never get the opportunity to have a horse like this again in our careers. I mean, you've been waiting your whole career for one like him and. To manage him would be great, but to get to own him as a dream come true. And same for me, like, you know, we might get the opportunity to manage another horse of this caliber. We might not, the chances of us getting to own one like this, or we know that it's special.

And so I'll let you talk a little bit about why we decided to do this as far as giving people the opportunity. Sure. I think you're exactly right. I don't think a lot of people in our industry are familiar with the syndication of horses, you know, like the racehorse industry, Thoroughbred and the Running Quarters, but, Thinking back, I mean, I was involved with Smart Lolina, and his was a different type of syndicate. There was 80 shareholders, and everybody got a breeding. They didn't share in their revenue. They sold about 20 extra breedings to cover syndicate expenses and donated breedings and things of that nature. But outside of that, they only sold 100 breedings a year. Yeah. So, you know, primarily you just got your breeding, you know, for the, for your share.

This is a little bit different. So it's actually, I think, better because you feel like you're actually owning a piece of the horse, not just getting a breeding to him. So, but no, I think that, I think, you know, I think this is going to open a door to, you know, more people, you know, with a special horse. It takes the right horse, obviously. It does. I don't think you can do it on just every one of them, but this was a great horse to try it on. And obviously it worked. I mean, our phones were blowing off the wall from Canada to Australia to, you know, certainly here in the United States and a lot of new people. That's what I thought was cool. I think it's when we did dark side, it was neat because there was a lot of people that came in and you're like, I have no idea who these people are. And, but now I guess we're three or four years into it.

You know who those people are because that was their gateway to coming into the business. It was a very positive experience for them. They had a lot of fun watching Trevor and Miles go show Dark Side. And then it's made them by a mare and by a three-year-old. And like now they're very involved in it. And I think... In the beginning of Dark Side, we were like, where did these people come from? But they've kind of been the people that have been quietly watching from the sidelines that weren't really sure how to get in and that allowed them to. And I think based on the conversations you had with people, I think some of the people that we had get in were very much that exact situation. Oh, absolutely.

And I think it's, you know, some people may be sitting on the sideline. Would like to get in, but they're like, you know, I can see where Don's been in this for 35 years and it's taken him that long to get here. Well, this allows them to jump in at the top level, you know, right off the bat. And like you say, they're not just getting the breeding, they're getting to share in the revenue of him as well. So it's more of an ownership feeling about it. So I'm very excited. I am too. And I think, you know, to note that these people also get to vote with us. So there's definitely going to be things come up that we say, you know, do we want to increase his breeding fee? Do we want whatever decisions are made in the horse? No different than me, you, Ty, and Todd would sit around and make decisions.

We're going to sit around and give our suggestions to the syndicate during our annual meeting that we have and discuss it, and they're going to get to vote. And so it is, it's not passive in any way. Like they are very involved in the decision making of this horse during the syndicate meeting. And then I think the thing I tried to get across to everybody is they're personally. Liable for helping us make this horse great. Like I need you to make sure that we're going to breed mares to them we're breeding the right mares to them and when we do that that we're really trying to place those babies in the right place because they're a part. Our success is their success and their success is our success now even more than when somebody's just booking a breeding to your stud because these people are invested long term with us and so, some people asked you know why did you guys do this I think that was probably the biggest question I got I was like why would you do this well, I think we've fielded lots of offers on this horse over the years.

And it's expected on a great horse, right? And so I'm very appreciative to all the people that have approached us about that. But I think in the end, it just kept coming down to me and Ty and you and Todd saying, like, we're just not ready to let go yet. Like we, you know, you and you especially understand how long it's taken to get here. And, and I think nobody believes in this horse. I know I really believe in him, but I don't think anybody in the world believes in him and has shown it more than you have. So for you, it's like, you told me that day, you know, like, I mean, I've been on this ride this long, like I'm not ready to turn loose yet. Well, yeah, you're exactly right. And I think it just comes from, you know, like I say, 30 plus years of doing this and, and, you know, just having, you know, been on the whole roller coaster of breeding him and then get him on the ground and then hope he's the, you know, you know, a good individual.

And, and then you get past that and then you grow him and try to keep him from hurting himself or, you know, all the things that we deal with in the horse industry and then get him to the trainer. Is he going to have talent? Is he going to be cowie? Is he, you know. How good of a show horse is he going to be? All those things. And he's, I mean, he's exceeded our expectations on every single thing that we've tried him on. So, no, it's, it's been, it's been an exciting ride, as you know. And, and that was one of the things that some of the people. Had wished that I talked to had wished we'd done it earlier. And, and, you know, I know we talked a little bit about it over the years, but, you know, we, you know, timing is everything. And, and when, you know, especially when you're trying to do something that not everybody is familiar with in our industry, like they are the, the other, you know, disciplines and stuff.

But so I think that, I think the reason they were asking that is, is they seen the joy that this horse can bring, you know you know for sure our families yeah and us and, i think that they're very excited that he has four or five shows left yeah for sure so uh i know that there was a you know a lady from australia she's like i you know i'm i'm buying my share and i've already got my trip booked to las vegas yeah for the run for a million so yeah so, he's gonna have a big you know cheer you know club at the at these shows from from here on out so but you know you don't know how he's going to be you know received you know something that they don't know anything about or maybe don't know much about yeah so I wish we could have done it earlier but at the same time I think we had to wait to the timing was right because the last thing you want to do is try something and have it fail and this certainly sure so yeah and I think for us we did it differently with dark side we did him as a four-year-old, and we kind of had everything set up.

We had collected him, so we knew his semen was good. At that time, I think we'd bred a handful of mares to him. But the biggest thing with him, I guess we did it as a five-year-old, but the biggest thing was he had already won some faturities. Like, we had taken a lot of, you know, there's always risk with any horse, of course, but we had taken a lot of the risk out. We knew, you know, everything was straight, everything was square. And I think with this horse, it was the same way. It was like, you know, we've been on the steady climb with him and we just wanted to make sure that, because it's, you know, some of these people are people we've never heard of, but some of them are our friends. And when they get in, you know, just as important as the people that are brand new, we want to do everything we can to make it a good experience.

And we're still dealing with a living, breathing animal. But I feel like the timing that we did do it was perfect because we do give them a chance to come and be part owner on a horse that we hope continues to have a great year, you know. But also if he doesn't step in the show pen again it's it would be okay we're ready to go to the breeding barn he's shown everybody what he's capable of and i think that he has a lot of respect amongst trainers and and people in the industry and so, I think we've made it where as much of the risk we could take out of it, we can. They're doing it at the time we did. Yeah. Well, I just want to thank everybody for, you know, for seeing this talent, recognize it.

And like you say, you know, the trainers have endorsed this horse. They've bred their mares. They've had their customers breed their mares. So, yeah, the future is very bright for them. You know, they're going to want to ride those coats and those coats look phenomenal. They do look really good. ones that i have at my house and they're out of great mares so yeah he's got every opportunity in the world to to to be you know you know like ty said a generational type horse and and i think that i know a lot of people that i spoke with you know i re-emphasized when you look back in history there's horses that come along at the right time, and you know with with you know doc lena and little peppy and little lena and you know back and forth so when you look back over the last 30 or 40 years.

White bloodlines have bred the most mares and it's the cat bloodlines. And now we've kind of painted ourself into a corner, breeding cats to cats to cats to cats. And for this horse to come along and be as special as he is and those coats look the way they look, I think the timing is very, very good for him. Yeah, I agree. I agree. And I think, you know, you talked a little bit, it was kind of cool, just some things that came up. You had some people call you to get in that were in your syndicate or the syndicates that you were a part of, like the smart little Lena syndicate. And I thought that that was really cool. Yeah. It brought back some old friends for sure. But, uh, But they were people that have, they were familiar with the syndication, you know, so, you know, they haven't had the opportunity.

They enjoyed the little Lena syndicate. So, you know, for this, for us to do it on this horse, I mean, you know, as soon as they heard about it, man, they were, they were calling. Yeah. And you could just, and, you know, some of them were some old, old timers, you know what I'm saying? But you could just, you could just feel the, you know, excitement following with them. And for me, just, I mean, I love to be excited about something and I love for people to be excited about stuff. And they were. And, you know, to be a horse that, you know, I actually raised. You know, I'm glad to share him with all these people because he's a special little horse. Yes, he is. Yes, he is. Well, I think another thing that we should talk a little bit about that I've had a lot of questions about is I had people call that said like, man I really wish I could have been a part of the syndicate either it wasn't the right time or whatever it was but how do I get to breed to this horse now they're scared to death and so, one thing I want to make sure people understand is this horse's syndication is a little bit different than the dark side so when we did the dark side it was a little bit like the smart little lena syndicate and those people we gave them two breedings per share, and that was all the breedings that exist besides like you said a couple to pay the syndicate expenses and things like that. So it's very limited.

Now, that's not to say that we're still not going to have to limit Shoddy, of course. It's not going to just be an open book, you know, forever and ever. Amen. But this is different where this horse will stand at Solo, just like if you were going to book to Third Edge or Vitalik Attack or Surrogate for any of those animals. We will have a wait list, and that I would suggest people that want to breed get on the wait list, because especially after the syndicate, I think we're close to 300 mares on there, and the fact is those are not all going to get fresh semen contracts. You know, we can only breed so many to make sure that we do a good job of getting people semen and getting people good doses, and so we'll have to close this horse's book, and then we'll have ICSI contracts available, but, I would encourage people that want to breed to them to get on the wait list and make sure they put an accurate number of mares that they're wanting to breed on there and make sure that they're prepared.

I would guess we're going to open solo stallion books in September of this year. And so the kind of the process for that will be just like it is with our other stallions. We'll open the book. And by that, we mean we're going to have contracts available on the website. We'll send a text and an email out to everybody that was on certain stallions wait lists and say, hey, these are open. Here's the link to it. You don't have to name a mare, but if you want a contract, you do have to fill one out, put your deposit down, and then your spot's held, and you can decide what mares you want to breed and all of that closer to time. We're gonna have a new website this year that makes it really easy for people to book we're gonna have a new portal that people log into and then as they breed mares or if they've bred mares prior, that portal is going to have their mares in it and it's going to have their vet in it and it's going to have all of their information because I've always thought for years if I have to write my credit card number down and my vet clinic down on a contract one more time this year I'm going to throw it in the trash.

I'm so sick of copying that down over and over and over. So our goal is to really make it about a three-click process for these people once they're an established customer. And so all that to be said, when we open these books, you're likely going to be in a new portal for solo select that is going to kick off our 2027 breeding season. Be very easy to book. You'll pay your booking fee to hold it or deposit. You'll hear us refer to it both ways. And then you're on the list for a fresh contractor locked in. If you miss that, we're still going to have ICSI contracts available, of course. And so all that to be said, if you go to our website right now on any of the stallions pages, you can look and specifically Shoddy, since that's who we're talking about, you'll fill out a form, put how many mares that you think you want to breed and we'll put you on the wait list.

But I would encourage people to get on that because I have a feeling that these breedings are not going to last very long this year. We've had a lot of demand and a lot of requests and the greatest thing is when we look at that wait list you look at the quality of mares on there and it's just and breeders you know and trainers and. It's exceptional, the set of mares that I think he's going to breed this coming year. Yeah, I agree. You know, just the feedback has been tremendous on him. And, you know, some people that, you know, decided not to, you know, buy a share, you know, they said, well, you know, I'm definitely breeding my mare. Yeah, that was cool. We had some people that said, for whatever reason, it wasn't the right timing for a share, but they're like, but can you add five of my mares to the wait list?

And so there I think that is you know we can't get a better compliment than that we know this isn't a perfect. Fit for everybody's program you know I had one person I was like man I really want to do that but I want to put that money into mares and I just want to buy breedings to this horse I'm on this horse's team and and I get it everybody's program is different but I don't think you can have a better compliment and we we can't say how much we appreciate it when somebody says It's like, it's not the right time, but can you put me on the wait list, please? Oh, yeah. I mean... To me, that's just as good. Yeah. And I just appreciate that people... Are that excited like you said like it's so fun for us to be that excited with them yeah yeah it's it's very exciting times for him and and you know like i say i i can't wait to watch him finish up his his season but you know more importantly, i'm i'm ready to see these colts yeah i'm ready to see these babies they look so phenomenal and and i know that they're going to do great things well wrapping up kind of what this was i think we kind of explained to people what what we're doing here.

One thing I want to touch on is something that we kind of have in the pipeline. Some of the feedback that I got from people on this was like, man, I really wish that there was essentially smaller shares available. Like, can I buy a piece of a share or can I get a group together? And kind of the way our syndicate documents are written, that you can't do that on this horse. But we do have some things coming in the pipeline that we're going to begin introducing to everybody and kind of putting some education out over the next 30 to 60 days called the Solo Select Owners Club. And what that's going to be, I'm not sure you've even heard about this. No. I'm all ears. You're here every day, but sometimes I spring it on, you know, whenever.

And so what we're going to do is we're going to have different opportunities. We haven't pinned down exactly what those opportunities are going to be, but they may be a percentage of a very special horse. They may be, or a stallion, I should say. They might be buying into a set of yearlings, just like Ty and I buy, you know, five yearlings, for example, put them in a, you can buy into these horses in the Silla Select Owners Club and come along this ride with us. They're all, you know, the top end yearlings, the best that we could buy out there at the sale or that we've gathered up and they're going to go to the best two-year-old trainers in the business. And our business plan is to sell them the next year at the two-year-old sale.

And we're going to do this as a reggae offering, meaning it'll truly be sophisticated through the SEC. You will get on line and be able to buy shares of these horses. And our hope and goal is to try to make this where you can spend $80 and be a part of the Seller Select Owners Club or you can spend $8,000 or $80,000. And it kind of allows, we've always been a fan here of letting everybody play, right? We want everybody to get to play at every level. And we've always been really proud to be able to do that with our stud lineup, the kind of horses that we put in the sale. We want something for every player in the game. And I think this really allows truly every player in the game to, this truly can be a passive investment.

And you sit on the sidelines and have an experience with us. You know, you get to experience either owning part of one of these very special stallions in the barn and being on our team, or you get to experience owning an embryo, for example, is one we've thought about doing maybe something really special out of Black-ish or something like that. And, you know, these people, as one person, might never be able to experience that thrill. But when we put a bunch of them together, they can come in and buy in and be a part of that horse. Whatever that career or move may be, it may be, hey, we're going to buy an embryo. We're going to offer it through the Solo Select Owners Club. We might offer 100%. We might offer 50%.

And for $80 to $200 or whatever price we put those shares at, you can buy in and you can buy one or many, however you want to do it. And then, of course, when we sell the horse, you get to be a part of it. This has been also something that's really popular in the third red world, and we've seen it be very successful in the third red world because it has let people play that don't have to have a ranch. They don't have to have a barn. They don't have to talk to the trainer. They don't have pay training bills. Everything is collected up front into a fund. There's no, you know, hey, we sent you a bill for $3 or $300 or $3,000. It's all collected up front. And so, You know, as Solo Select continues to look at ways to really let everybody play and be a part of our team here, that is something that's felt like a natural next step.

And so we'll be talking a lot more about that. But for all the people that would have liked to have gotten in on shoddy that weren't able to, there may be some potential opportunities coming up on, like I said, anything from an embryo to part of a stallion to a show horse that Kenny is going to show. And really the opportunities are endless. We're going to be looking to the public to say, you know, what do you want to be a part of? Do you want to buy a special mare with us? Okay, let's go buy a special mare. Do you want to buy an embryo? Do you want to buy a three-year-old and put it with one of these trainers, whether it's Kenny or Trevor and Miles or whoever it is. So that's kind of what's next on the horizon.

I think it's going to be a very exciting way for people to play at an elite level that, you know, they get to really participate with the highest level horses and trainers and everything in the industry. So I think that's a great idea. Just, just from the standpoint of, you know, there's, there's a learning curve, you know, and I think that eliminates some of that. And I think a lot of new people coming in the industry, maybe they don't know the right people to get with, or, you know, it's going to take time to, to figure that out so there's going to be some bumps along the way doing that so this this lets them jump in there and and compete at a high level and of course you know you guys know you know know the business you'll know the trainers you'll know the you know the programs to put them in so.

You know that's they're going to get a lot of bang for their buck I think so too I think it'll be a cool learning experience oh absolutely for a lot of people just to see what it's like to be to to have horses like that and. So I think that we're really excited about that and we'll have a lot more information coming, a lot of education out there, but people can kind of be looking for that. Probably middle to late fall is kind of when we plan to launch that. It's a pretty big, it's not pretty big, it is a huge undertaking to get all the things through attorneys and SECs and auditors and all of that. So it's been an experience to get it all prepared and ready to go, but I think it's going to be a really cool opportunity for the industry.

So thanks for jumping on here with me today. And we always love to get on here and talk about our horse. And we're excited for all the new team members that we have. It's really cool. I've already had multiple calling like, okay, I got the, now I need to buy an embryo or I need to buy a mare. What are we doing next? Like, what do I, do you have a shoddy baby I can buy? Like they're ready. They're in, they're like, put me in coach. I'm ready to go. And so it's really cool. I think one thing that I told a couple people was I was like, you know, we have a really good team with us four. It's me and Todd, Ty, Dawn, and our families and our teams, you know, the entire solo team. We have Marie back here videoing this that's just as much a part of the team as I am or Ty is or you are. And so we have all these people that are already involved in this horse. And then we just got to add a whole nother group of them that are cheering for us.

That are fired up. I mean, they're pumped up and so, and they're cheering for themselves now. I mean, you know, we're, we're all, so it's like, some people are like, well, I, why did you guys do this? And I think we've explained a lot of our why's, but another one that I really saw with dark side was like, well, we just like put this dream team together of all these people from all these different backgrounds. Some of them already have great mares. Some of them are going to buy embryos or really good mares to breed to this horse. Some are just going to sell their breedings, But they're going to be our biggest advocate out there on the streets And we all know we've got to have advocates out there on the streets too And so that was another reason we did this So we're excited to have all of them on the team, We're going to have our syndicate meeting, I believe, this year at our open house. And that's one last thing I'll touch on.

We're going to have our stallion open house this year, November 20th through the 21st. It's the weekend before Thanksgiving. And we're putting everything together now, but I think it's going to be an amazing event. We're going to do, our plan is that Friday, we're going to do a symposium and have. Everything from Tiago and his veterinarians at Gene Tech talking about ICSI and answering everybody's questions and just trying to explain it because we always get so many questions about that. To Ty Benson coming and talking and Ty Smith about like, what is a two-year-old program? How do you win at this game? Like, it's a fun game to play, but it's a hard game to play. How do you set yourself up for success in it?

To ADM is going to be here discussing, you know, how do we feed a horse from conception to yearling along with probably you and Evan and Dustin and. Maria, if I can get her up there, and everybody that does, you know, the sale fitting, science, basically, and, but how important it is for those horses to be fed right from the beginning, and so we're going to have a lot of really cool speakers, plus, of course, you're going to get to come and see the studs and tour the stallion barn, tour all the facilities, and then this year, our yearling sale is going to be the weekend of Thanksgiving, so, we're going to have 88 Ranch who has Chic Gene Fly is going to have their production sale with us this year so you'll be able to view all the horses they're going to be selling will be down here plus all of our horses going to the NCHA Futurity sale plus everything that we have in our yearling sales so, I bet there's two to three hundred horses to look at here in a weekend so you're going to get a lot of bang for your buck to travel to Gainesville that weekend come meet Shadi all the stallions in the stallion barn, meet our team, look at the facilities.

Learn a lot from the speakers that we're going to have, participate in the Q&A sessions. There's going to be a lot going on. So we're really excited. Last year, we had a really cool event planned and we had, I called it horse COVID. What was it again that it was? Yeah, herpes virus or whatever. I said it was horse COVID. We had to shut down because of horse COVID. So hopefully, bearing that there's no crazy horse COVID that pops up or human COVID that pops up. We're going to have this open house. It's going to be awesome. So for anybody listening to this, I'd encourage you guys, we'll be putting out our RSVPs pretty soon. Get on their RSVPs. We kind of know who's coming, but that's going to be an awesome event. And this Jim Shadi will be there ready to meet everybody.

So thank you guys for listening in and hopefully we'll see y'all at the open house this year.