‘Succession’ Presented by Neuman Equine Insurance: Craig Bandoroff, Denali Stud

They say that life is what happens to us when we're busy making other plans. But even in a game where so much turns on chance, for better or worse, you can't just throw your hands up and leave it all to fate. After all, the countervailing dynamic to life on a horse farm is unchangingly cyclical: foaling, mating, breaking, prepping, to everything there is a season. Within those patterns, sure, we know to expect much unpredictability. But that's how horses teach us the long game, to be patient and wait until you can see the whole picture.

Few in our community knows all this better than Craig Bandoroff. His whole life has turned on fleeting episodes of good and bad luck, from the terrible spill that ended his career as a jockey to the serendipitous encounters at university-with a professor from another program, for instance, who reconciled him to a changed relationship with horses; and, above all, with his future wife-that ultimately adapted his gifts to the foundation of Denali Stud. At the same time, Bandoroff and his wife Holly have had many years to think about and plan for the transfer of responsibility for the business they built from scratch to their son Conrad.

As has quickly become apparent in this series, there's seldom a formal and specific moment of transition. But for the past couple of years Bandoroff has progressively backed into semi-retirement, with the combined benefit of expert counsel and his own reflection.

“I think the one thing I've learned in the process is that there's a reason a lot of successions don't work out,” he says. “And the reason is…because it's really hard to do! You need the right balance on both sides. The father has to be of the right mindset. And the son or daughter a) has to be capable; and b) has to be given the time to come into the position and become ready to take over. It's like a relay race. When you're starting out, the successor is the one waiting in the block. And eventually you get there and hand on the baton, and first they're one step away, then they're 10 steps away, and then they're gone.”

In the meantime, however, there's that critical moment when you might easily drop the baton and, to avoid that, for a few strides you both have to be flat out and in step.

“Exactly,” agrees Bandoroff. “Now we did hire a family consultant, to help us through it, and that was invaluable. But at the end of the day you have to do it your way because everybody's different, and every successor is different. So you just figure out the balance. But there are some real caveats. Really everybody says the same thing: at some point you have to give up the control, you can't hover over them. And the ones that don't make it are the fathers that didn't get out of the way, that just wouldn't vacate.”

Bandoroff didn't really have that problem, in that he was positively eager to gear down.

“What happened with me I've learned to be very common,” he says. “You just hit a wall. I was doing it all myself, there are a lot of moving parts, and you just reach the point where you say, 'Man, I'm not 40 anymore, I just can't keep going at the same pace.'”

Again, they were lucky in that Conrad had long manifested both desire and eligibility to take the legacy forward. Neither of those, of course, are ever guaranteed. Neither of Conrad's sisters had ever evinced any interest, instead discovering vocations that put the horse business in due perspective. One, for instance, is nursing at the prestigious Cincinnati Children's Hospital.

“Like I say: we sell horses, she saves lives,” Bandoroff says proudly. “And the other daughter works in government policy for an investment bank, really keeping track of the political stream. We joke that the girls obviously got the brains. But they didn't get the horse gene, and Conrad definitely did.”

And what if he hadn't?

“I guess then you just sell, you take the money and move on,” Bandoroff says with a shrug. “And, in all honesty, that's pretty much what I always expected to happen. But at a pretty early age Conrad showed that this was the direction he wanted to go. And after urging, pleading, begging him to do something else, once we made the commitment to him, it was, 'Okay, if you want to do this, then let's see if you can jump through all the hoops.”

Craig and Conrad Bandoroff | Keeneland

 

Over the years Bandoroff has seen plenty of people fail to meet this kind of challenge, and he put corresponding groundwork into the succession.

“I took it on with a sense that I had to do this right,” he says. “I was dealing with something that took Holly and me 30-plus years to build. That's a lot of sweat equity. And I'm dealing with my son. So we set out on a plan to give him the tools we thought he'd need to be successful. And he embraced everything we ever suggested.”

Both father and son acknowledge a huge debt to the Godolphin Flying Start program, which broadened Conrad's horizons so generously. Even those raised to the best standards at home can only benefit from seeing how other horsemen, in other environments, meet the universal challenges of the Thoroughbred. And Bandoroff, for his own part, not only consulted esteemed peers to borrow lessons learned in parallel situations; he even took a course at Harvard that included a module on succession and family business.

“Thirty years might not be nearly as long as some, but it's still a long time, especially when you've started from ground zero,” he says. “I think if you make the judgment that the successor is not capable, then you need a Plan B. But in our case I saw very clearly that the successor had all the tools. That doesn't mean it's easy. And of course you can think that, and then it doesn't happen. But in this case I feel it's happening. I see it.”

So how about those moments, in the transition, when there were the inevitable disagreements? You've renounced control, but this could be some question of strategy vital to the future of a business that involves everybody in the clan.

“Honestly, or maybe remarkably, Conrad and I have had very few lock-horn moments,” Bandoroff says. “But, yes, that's where you say to yourself, 'Look, I can't screw this up. Because if I do, not only am I screwing up the business that we built, but I'm screwing up my family.' I was never one to sit there and say, 'Oh gosh, look what I did and how wonderful it is.' But you want to keep this thing going. Which is harder: to build the business, or to keep it up there? And the answer is that both are hard. No question, whether it's Conrad or Walker Hancock or Bret Jones, they definitely had a big head start-but it's still really hard.”

The privileges of succession certainly come with commensurate burdens. The clients who lose their favorite mare, for instance: that call is now Conrad's to make.

“Yes it is!” Bandoroff exclaims with relief. “After a storm last year, we had a real bad call that had to be made. And I just sat there and said to myself, 'Well, I'm glad I don't have to pick up that phone.' I still have clients I'm closely involved with. But I've told Conrad, 'Look, you have to be the rainmaker now. I never enjoyed that part of it and I'm not going to do it anymore.' And he gets that. But that's where the pressure comes.

“Every once in a while there'll be something where you say to yourself, 'Hey, this is going to be a bumpy landing.' There was one time I could see from a distance it probably wasn't going to end well. But I made some big mistakes along the way, that cost me a lot, and I know that you don't forget those. The good news is that you're only ever a phone call away. There's going to be a day, hopefully quite a few years from now, where you're not. But at this stage I think we just try not to let the boat drift too far off course at any point. You're never going to let it crash, obviously. But in the end it's going to be harder for them to learn from mistakes, if you're not going to let them make any.”

All that said, when your life and your work have so long been conflated, you can't just sever yourself from decades of routine overnight. Bandoroff still starts every day with TDN, albeit nowadays a winter sanctuary in Bald Head Island, N.C., is embraced with a clearer conscience.

The Bandoroff men at Keeneland November | Keeneland

“At first, this word 'retirement' is out there like some panacea or some oasis in the desert,” he says. “And then you get there and, well, there's lots that's great, but you also realize how some of the stuff you're leaving behind is really important to you, too. So what makes handing off nice is that I had the opportunity to say, 'Look, I still do want to be involved in certain things and not in others.' I get to do what I want to do, when I want to do it; or what I have to do, when I have to do it. The good part is when the 'have to' is over, I go back to the 'want to' and that's the whole key. But as opposed to a CEO who retires from some company and it's over, I was able to do it on my terms. And that's working out great. That's still being able to go into the ring and buy a mare that could down the line maybe become a foundation type for us.”

Certainly Bandoroff is at pains to keep looking forward, and not to dwell on his own past, remarkable as it has been.

“Look, I think everybody knows the story about how my arm was paralyzed,” he says. “And yeah, there were a couple of years after that happened, it was a tough road and a long one. And thank God I had family to support me and help me get through it. And then by happenstance, at the University of Virginia I met this couple who had a farm and hunters and went out to visit them one day. And they said, 'Oh, come on, why don't you get on a horse?' And I did. That gene had gone dormant, but they got it reignited and then it all went in a different direction. And it's a crazy thing to say, but maybe it was the best thing that ever happened to me.”

Having glimpsed a path, he came to Kentucky for direction. His first mentor here was the “awesome” Fred Seitz; and then the man who was transforming the whole business, Lee Eaton. On top of that, it was transferring to college here that had enabled him to meet Holly.

“I always said that for me it was love at first sight, it just took her a little longer to be convinced,” he says with a grin. “If you don't like Holly, you don't like human beings. She's one of those angels without wings. But once we started our own operation, she had to learn the horse business or she was going to be a very lonely woman. Because it is all-consuming: not a lifestyle, but a life. So Holly embraced that, and became integral to everything that we were able to do. I can tell you, without Holly, there wouldn't have been a Denali Stud to hand off because I would just have just pissed somebody off and that would have been the end of it!”

Apart from anything else, of course, Holly has been a priceless pivot between her husband and son during this whole process of transition; and, moreover, she never let them forget that Conrad also has sisters.

“And rightly so,” Bandoroff says. “Conrad and I spend a lot of time together, do a lot of things together, but his sisters obviously have to be part of the equation. And we're very fortunate that the accountant that set it all up did so in such a way that everybody in the family was tied to the success of Denali Stud.”

One way or another, then, that split-second of disaster at Garden State Park in 1974 ultimately opened the door to a whole new life. Bandoroff impatiently dismisses pointless retrospection. What would have happened, had he renounced horses as intended when going to the University of Virginia? Or, before that, how far might he have gone as a jockey but for what happened?

“Who knows? Who cares, right?” he says with a shrug. “People said I had talent and, looking at the pictures, I look pretty good on a horse. Doesn't matter. Look, it's a good story and it turned out good.

“I'm not going to be arrogant and say we have pulled this off, but I will say that I couldn't be happier with where we are. Conrad has grown into the role as the leader of the company in every way I could hope. That gives me a sense of pride I can't really describe.”

That was enhanced by a note Bandoroff received from one of the great achievers of the global business, remarking that Conrad had clearly inherited his values.

“It's always been really important to me to raise horses in the manner that they have a chance to go on and be good horses,” he reflects. “And I think when people think of us, they associate us with quality. We've always wanted a person to walk up to that barn and say, 'I really like this horse-and these people have sold good horses before.'”

Bandoroff feels that our walk of life makes a rather better job of succession than most others.

“The statistics tell you that in the 'real' world a large percentage fail,” he says. “I think the success rate in our cottage population is very high. I think what makes it different, for us, is the land. There's something about both the land and the horse that's a little different from inheriting machines that push out widgets.

“One of the real joys now is that we can both be at the barn and, instead of somebody coming up to me, they go up to Conrad. Maybe for some people that would hurt their feelings. But, to me, it's the greatest feeling in the world. It took a long time to get to that spot.

“Conrad started with me eight years ago, which is honestly hard to believe. In many ways, he has the baton now and he's moving farther away on his own. I feel like he and Claire are the faces of Denali Stud now. It's their company. As I look out at the ocean, that's a wonderful thing to be able to say.”

The post ‘Succession’ Presented by Neuman Equine Insurance: Craig Bandoroff, Denali Stud appeared first on TDN | Thoroughbred Daily News | Horse Racing News, Results and Video | Thoroughbred Breeding and Auctions.

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Thoroughbred Aftercare Alliance Partners With Hallway Feeds

The Thoroughbred Aftercare Alliance announced a new partnership with Lexington, Kentucky-based equine feed manufacturer Hallway Feeds, the organization said in a release Friday.

Family-owned and operated by the Hall Family since 1964, the company is prepared to make a major financial commitment to accredited Thoroughbred aftercare through this collaboration. Select Hallway Feeds bags will proudly feature the 'Thoroughbred Aftercare Alliance Proud Supporter' Seal. In addition, the partnership will include race presentations and event booths.

“Hallway Feeds is proud to support the efforts of Thoroughbred Aftercare Alliance. As a company that supplies feeds to all facets of the Thoroughbred industry it is fitting that we take an active role in their aftercare,” said Lee Hall, Vice President, Hallway Feeds.

“Lee Hall has established Hallway Feeds as a prominent supplier of horse feeds, not only in Kentucky but also across the United States and globally,” said Craig Bandoroff, Owner of Denali Stud and TAA Vice President. “Recognizing the critical role of accredited aftercare, Lee has committed Hallway Feeds as a strategic partner to advance the cause, actively participating in spreading the important message and mission of Thoroughbred Aftercare Alliance.”

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Letter to 60 Minutes: Craig Bandoroff

In Tuesday's TDN, we ran a letter from JoAnn Hayden urging industry supporters to write to 60 Minutes with their thoughts on their Nov. 12 segment, “Horse Racing Reform?” Denali Stud's Craig Bandoroff shared his letter to 60 Minutes with the TDN.

To: 60minutes@cbsnews.com

Let me preface this by saying I'm 68 years old and I have religiously watched 60 Minutes for the past 35 years and I've watched it less regularly my whole life. I have the show automatically recorded so I'm writing to you as a devoted follower of your show.

I have been involved in thoroughbred racing and breeding my whole career, which is now 50 years. I was very disappointed in your segment on Sunday. There is no question we have a history of a drug and cheating problem. But the way you presented your story doesn't portray that the incident percentage of both drug positives and breakdowns is small. Any breakdown is too many. Everyone in the industry feels that way. It is an industry where extremely devoted people labor because of one common thing: we all love horses, especially thoroughbred horses. That did not come across in the piece. Granted your story was about our problem but some senses of balance would have been appropriate.

I was very disappointed in both the piece and 60 Minutes in general. It makes me question the integrity and balance of the pieces I have seen over these many years.

–Craig Bandoroff, Lexington, Ky.

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Another Year, Another Declining Foal Crop; Experts Chime In

When The Jockey Club announced last week that the estimated North American foal crop for 2024 was 18,000, a 2.7% decline from the projected 2023 foal crop, the news was hardly a surprise. By the time the final numbers are in for 2024,the foal crop will have declined in 18 of the last 19 years and this will be the smallest foal crop since 1964. Since 2005, when there were 38,365 foals, the crop has declined by more than half.

How big of a problem is this. Why is it happening? What can be done to reverse the trend? The TDN posed those questions to some of the foremost experts in the breeding industry.

Ned Toffey (Spendthrift Farm): It is certainly concerning and it's certainly more than a minor blip. When it got to 20,000, that was essentially half of what it was when I first went to work on a Thoroughbred farm. We have to do a better job as an industry of marketing both the sport and the breeding industry. We have to do a better job of attracting new people. We are up against it.

As a society, we've become more removed from agriculture and horses in particular. It's a venture that requires a lot of wealth and a lot of patience. As an industry, we have not done a good job putting this out there. Spendthrift is among the many farms that has embraced the tourism aspect and even that is a long play that you hope down the road yields fruit. By opening up farms, people can get more familiar with what we do here and it won't be such a strange thing for them. Then again, that's not going to change the foal crop any time soon. It was nice to see a handful of new people coming in and buying yearlings during this last sales season. We sure needed that because so many others have gotten out.

I don't know how it is that purses keep getting bigger but the foal crop keeps declining. You are seeing fewer and fewer of these breed-to-race operations. It's become almost strictly commercial. That doesn't necessarily mean that there should be fewer foals. In Australia, a year or two ago they passed us with their foal crop and a much higher percentage of their foals go through the sales ring than ours. They are more commercial than we are and are in a position where they are thriving.

As Australia has shown, where they are primarily commercial, we can still have larger foal crops. The horse is still a bigger part of their culture than it is in ours. It's more of a cultural shift than anything else and that's not an easy thing to reverse. We have to find the right people to figure out the best way to market this industry to people.

We need to get our house in order, clean up, change the perception our industry has. We need to do a better job policing ourselves. There are some things going in the right direction and we need to get out there and change the perception of the industry the public has.

Carrie Brogden, | Keeneland

Carrie Brogden (Machmer Hall): Everything is so expensive now. If you look at the stud fees, the costs of the labor, the board, the hay, the feed. All it takes is for a horse to have a couple problems and you've gone from having a horse worth $300,000 to $3,000. We sold two with two weak scopes in the September sale. One brought $4,000 and the other $3,000. Both would have been $75,000 horses if they had what the market deemed were normal scopes. There are so many factors. What it comes down to is it's a lot easier to buy a great horse than to breed one.

What can be done to fix it? The sport would need to come back to being in demand. People ask how come the sales are so strong even through the sport is obviously under tremendous pressure. The answer is that the supply is not keeping up with the demand. It's going to continue to contract. I went to the sale with an Indiana-bred filly by Upstart that I really, really liked. People told me they're not interested in Indiana-breds. They're only interested in Kentucky and New York-breds because of the purses. The state-breds are getting hammered way more than they used to be because the purses are so good in so many other states. Going forward, I'll be very wary of buying state-breds to pinhook because of the feedback I have gotten.

I can only see it continuing to contract because the target is so small. Everyone wants an above-average horse. Everyone is always going to have a bell curve when it comes to their foals. You hope the top foals pay for the rest of them. It's not easy when you have 10 foals and you are hoping the two best ones will pay for the rest of them.

Until we get our sport straightened out and unless HISA can turn out to be the positive thing so many of us hope it will be, I don't think the trends are going to turn around. At least until we turn around the popularity of our sport.

Craig Bandoroff (Denali Stud): The reason this is happening is because, as breeders, its very hard to make money. Like everything in this business, the percentages of being economically successful are low. The reason it is happening is because there are fewer people who are in it for the love of the game and the pursuit of the challenge. You have more and more people who are doing this because they are looking for an economic return. That's my opinion and has been my experience. In the past, the breeders developed families and did it as a pursuit. We have very few of those sorts of breeders anymore.

Racing is the engine that pulls the train. Everything is interconnected. More and more there will be fewer horses for racing and that means racetracks will have to run fewer days, have fewer races and have smaller fields. How do we reverse the trend? I'd like to think we're going to hit a number where it levels out and the economics get better. Don't ask me where I came up with this number, but in my mind I've always felt that 14,000, 15,000 is where you might level out. That's what my gut tells me. But when I see it declining every year, that doesn't surprise me at all.

We have to make the economics better. Why is this happening when purses are going up? That's a good question. What percentages of the horses win a race or even make it to the races? Those numbers aren't good. That's how I explain our business. We drill oil wells and we get a lot of dry wells and hope we get a couple of other ones that will pay for the failures. That's the economics in every part of this game, whether you're breeding, racing, standing stallions. Purses are going up but not because people are betting on horses. I hope we don't lull ourselves into a false sense of security because we all know what the government giveth the government can take away.

Craig Bernick | Keeneland

Craig Bernick (Glen Hill Farm): It's a commercial market now. The foal crop has been going down for a long time but the amount of horses being sold as yearlings hasn't gone down by nearly the same percentage. The syndicates are fantastic because it gives people a chance to compete at a top level. A lot of these owners were putting up $500,000 or so a year buying three or four horses they would send to their local trainer. Now they're using the same amount of money to take 10% of 15 horses. That's got everyone focusing on the top of the market, the best horses.

Racetracks are closing and the foal crop is going down and there are more $500,000 and up horses sold every year. Everybody is focusing on the top and ignoring all the other horses.

We should have had a mare cap but we don't. That would have helped diversify the stallions that people breed to and everything else that goes along with it. The big stallion farms want more, more, more all the time. We have a foal crop going down yet we have stallions being bred to more mares than ever before. That can't be good for business long term.

I don't know what can be done to reverse the trend. We have the Breeders' Cup, the Triple Crown and four or five big Saturdays spread across the rest of the year and those are the only races anyone wants to run in anymore. We've made Grade II and Grade III races not run on those days insignificant from an owners' perspective. The only thing that really matters any more is if you win on Whitney Day, Travers Day, Breeders' Cup, Triple Crown, Pegasus. Those are the days that matter. We've lost a lot when people don't care anymore about winning a Grade III race somewhere on a Saturday. Everybody's aiming for the same top of the pyramid and as a result, there will be fewer and fewer horses born. Until there is a demand from people who want to have nice horses, are happy to win nice races and enjoy being an owner, we're going to be in trouble. All everybody wants anymore is to have Derby and Breeders' Cup horses.

Fred Hertrich (Watercress Farm): The market is not accepting less-expensive horses. The day of the $1,000 stallion breeding to the $1,000 mare is a thing of the past. The cost of raising that horse, the cost of breaking that horses, the cost of training that horse is the same whether it is the highest-priced yearling in the world or the least expensive. Like with everything else in the economy, the costs are great so the price of the asset has to be greater. We used to have thoroughbred buyers who would buy 10 yearlings at $5,000 apiece. They'd hope to hit the lottery with one of them and they might give away the rest. But that was when expenses were manageable. Now with the price of feed, help, blacksmiths, on and on, the game has changed. People can't afford to do that any more. You have to believe that when you start with that product you're going to have something that will have value and has an opportunity to be a top racehorse.

I'm not sure anything can be done about this because I don't see the costs of raising an animal going down. Look at labor. What we used to have to pay for labor on a farm or in a training barn has gone up 30 to 40% in the last 24 months. It won't be reversed, in my opinion.

If the foal crop were to get down to 13,000 or 14,000, the caliber of everything would be better. Racing will be better, the product will be better. No one will be breeding an ill-conformed stallion to an ill-conformed mare. The dynamic will change but it will be an improved product for the public to wager on. There are going to be tracks where if the purses are too low they won't continue to race because people will not be able to afford to race for those purses. Some of the jurisdictions that have no way to generate serious purse money may not be able to stay competitive. I hate to say it, but like with anything, the bottom of the food chain is not going to do well. Horse racing and horse breeding is no different than any other entity in the country.

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