Q:  That was a nice win a few weeks ago with Salt Water Reign.  Tell us about her.

A:  She’s really turned out to be a nice filly, well; she’s technically classified as a mare now.  She’s won four races for us.  It’s interesting how we bought her.  We were at OBS April in 2006 and Steve was there buying for Jeff Puglisi.  We were just getting started with Steve and he came to me and said this was the horse he liked for us.  When you think about it it’s amazing.  In a sale with 1500+ horses he zeroed in on this single horse.  Then add to that that we were fortunate enough to not be outbid.  She’s really worked out.  Right now she’s become the flagship horse in the barn. 

Q:  She really relishes Aqueduct.  She’s never hit the board at any other track.  Is she a horse for the course type? 

A:  There’s no question that she loves Aqueduct.  All four of her career wins have come there.  She’s never missed the board at Aqueduct.  While it’s true that she’s never finished in the money at any other track that stat is very misleading.  Her races at the other tracks were a debut in open company at Delaware where the winner ran the fastest time for the distance at the meet and went on to win like four or five in a row and win stakes.  She’s also raced in stakes races at Belmont, Saratoga, and Finger Lakes.  She ran good solid fourths at Belmont and Saratoga in stakes races so it’s not like she can’t lift a hoof outside of Aqueduct.

Q:  How has she developed over the course of her career?

A:  It’s interesting and Salt Water Reign is really a good case study in Thoroughbred development.  She debuted in August of her two-year-old year and then went to the sidelines with a minor injury.  Then she came back in January, won two of three, ran in a few stakes, and went back to the sidelines again.  Long story short is that she missed some time during her career yet has still racked up now over $150,000 in earnings.  I think a horse like Salt Water Reign really exemplifies the importance and need for patience in this game.  We had a few partners that were getting a bit antsy during those layoffs in her two-year-old and three-year-old seasons but that time off is paying dividends now.  Anyone who endeavors to own Thoroughbreds really needs to be prepared to practice patience.  It is by no means a game of instant gratification.  Sometimes it’s like watching grass grow but, when managed properly, it can be a great deal of fun long term.

Q:  What’s next for Salt Water Reign?

A:  We’re going to continue to capitalize on her favor for Aqueduct.  There’s an open N2X in February that is the next logical spot for her.  Every time a horse wins a race it then needs to step up to the next condition and the water gets deeper.  With Salt Water Reign so far she has stepped up every time she’s been asked.  We’re hopeful that she’ll do it again.  Some of our partners have expressed interest in breeding her when her career is concluded.  Although we’re primarily a racing partnership and I’ve learned that you need to take things one day at a time with horses, it would be nice to be able to keep her around when she’s done racing.  It will be rewarding to know that she’ll be in a good home living a happy life and, at the same time, it would be neat to be able to breed and race little Salt Water Reigns keeping the name moving forward.  That, hopefully, is a long way away and we’ll cross that bridge when we get to it.

Q:  Salt Water Reign is a New York-bred.  How has that program worked for Hibiscus?

A:  Racing New York- breds is a tremendous opportunity.  Not to take anything away from any horse, but racing in the restricted company of state-breds is very easy in relation to the same level races in open company yet the purses are quite similar.  The New York-bred Maiden Special Weight is $41,000.  The New York-bred N1X is $43,000 and the New York-bred N2X is $45,000.  When you factor in the minor awards you’ll pick up along the way you can have $100,000 in the bank before you need to see the first open company horse.  Then, the way the races are written in New York, you get to try open N1X horses because the restricted races don’t count against your conditions.  That, by the way, is exactly how we managed Salt Water Reign’s career.  Now that she’s knocked out the open N1X we’ll try the open N2X.  As Steve Klesaris said, “You get through your state-bred conditions and then you get to do it all over again.”  And the best part is the Open Owner Awards.  When you race a New York-bred in open company in the state of New York you receive a 10% bonus for top-three finishes in allowance, stakes, and certain claiming races.  So, in Salt Water Reign’s last race, the purse was $49,000 but for us she was effectively racing for $53,900.  That’s a better purse than some New York-bred stakes races.  It’s very sweet when it all works out.

Q:  You’ve used Rosie Napravnik recently with Salt Water Reign.  How has that combination worked out?

A:  Rosie has done very well in Maryland.  She was the leading rider there in wins in two of the last three years.  You don’t put up stats like that by accident.  She’s extremely talented and, like many talented young riders, she’s moved her tack to New York during the winter.  Steve’s brother Bobby is Rosie’s agent and Steve has used Rosie in Maryland many times.  When she arrived in New York Steve and I discussed the situation and we agreed that we’d be very fortunate to have Rosie ride for us.  We have a highly talented rider riding one of our best horses and, at the same time, we’re helping a rising star to get some notoriety and attention on a major circuit helping her to further her career.  And being in the position that she’s in, you know she’s going to be hungry and give 100% every race.  It’s really win-win and we look forward to having Rosie ride for us in the future.  She told me that she really likes Salt Water Reign and that she wants to ride her again so hopefully we’ve got hot combination developing and more good things will come.  So far Rosie and Salt Water Reign have combined for one win and one second in two starts.

Q:  What are Hibiscus’ plans for new additions in 2009?

A:  Anyone who’s been following the recent sales auctions can’t help but notice the steep declines in sale prices.  Since last August or so year-over-year prices have been down 40% to 50%.  The Blood Horse does some nice analysis and there exists a direct correlation between Thoroughbred prices and the Dow Jones Industrial Average.  We’re currently fully entrenched in a solid buyer’s market.  Sale prices are off by as much as 50% yet purses are, for the most part, consistent or off by a few percent.  I see a tremendous opportunity for Hibiscus partners.  Our program consists primarily of New York-breds racing on the NYRA circuit.  Of all the major racing circuits the NYRA purses have remained the least negatively impacted.  A recent report shows that NYRA purses actually increased from 2007 to 2008.  Furthermore, the long-awaited Aqueduct casino is scheduled to come online in 2010.  When that happens purses are projected to jump in New York.  So imagine that we can attend the 2009 sales and purchase stock at 40% to 50% discounts and have them come to the races on a circuit and at a time when purses are forecast to significantly increase.  Opportunities like this don’t come around very often.  It’s like a perfect storm for Thoroughbred owners.  There are a lot of other outfits out there that are struggling in these economic times.  Fortunately, Hibiscus Stables is well-capitalized.  We’re in a position to take full advantage at the spring sales.  We’ll be contacting our client base very shortly to find out their level of involvement and then we’ll hit the ground running.

Q:  Does that mean that syndication prices will be half of the 2008 levels?

A;  Our syndication prices are based on a few different components.  The main component is our cost for the horse which, as we said, could be as much as half the 2008 levels.  We then need to tack on a reasonable amount to cover the administrative costs of operating the stable which is a function of the purchase price.  So those components will be directly affected by the softness in the sales prices.  The other component of the syndication price is the pre-paid training through December 31.  Unfortunately the trainers, vets, and other vendors have not changed their billing rates so that component will remain unchanged.  So, although we expect to be able to syndicate quality Thoroughbreds for much lower prices in 2009, the prices aren’t likely to quite be half.  They will, however, be significantly lower which will be directly related to the lower purchase prices.  With flagship runners such as Salt Water Reign and Iron Curtain along with our 2008 purchases arriving to the races along with our new 2009 acquisitions we expect that 2009 will be a very interesting year for the stable and the partners. 

                                                                                   - Mike Oliveto, CEO Hibiscus Stables