Arabian Gold Rush
Rise and Fall of the Arab Market
(first appeared in The Equiery August 2011)
The April 29 seizure of 136 malnourished Polish Arabians
from Canterbury breeding farm on the Eastern Shore of Maryland has brought
an uncomfortable spotlight on not only the equine breeding business
in general, but on the Arabian business in particular. Horse owners
not familiar with the crazy 40-year rollercoaster ride of the Arabian
market have scoffed at the estimated value of $30,000 for some of the
horses, a figure tossed out by welfare and rescue organizations involved,
as well as some breed enthusiasts.
For still others, an estimated value of $30,000 is not impressive. If
anything, it is modest.
All of this speculation about the value of any individual Canterbury
horse is just that: speculation. There is one foolproof way to determine
the value of any horse at any given moment, and that is what someone
is willing to pay for said horse at that given moment.
At The Equiery, as at all horse publications, we see horse
owners and dealers play the “my horse is worth” or the “my
horse will be worth” game every day.
“I bought my horse for $5,000 three years ago, but now he is worth
$20,000 because I have three years of board, training and vet and farrier
expense into him.”
“I bought my horse as a three-year-old for $2,500 four years ago,
but now that he is seven and I have been riding him for four years,
he is worth $15,000.”
“He has the potential to be a great XYZ…so he is easily
“When my horse has another three months of training on him, I
should be able to get $35,000, so I will ask $35,000 for him now.”
Savvy brokers and trainers know that when they have a solid cash offer
in hand, they take it. It does not matter if, after next week’s
show, the horse could be worth double that, because there is equal chance
that the horse could be injured the following week and worth even less.
Nevertheless, bloggers, tweeters, facebookers and chat room junkies
all around the inter-world have asked where and how that $30,000 for
a Canterbury Polish Arabian was calculated.
If we take a look at the rise and fall of the U.S. Arabian breeding
and sales market over the last 40 years, it perhaps puts into context
what seems to some to be crazy dollar figures. Perhaps it will also
provide the framework for understanding a situation as seemingly absurd
as the Canterbury situation appears to be on the surface…150 horses?
Continuing to breed, despite the crash of the economy? Why would anyone
The Arabian Emigrates to the U.S.
First imported to America in the mid-1800s, Arabian horses gained widespread
attention during the 1893 Chicago World’s Fair, where Turkey exhibited
45 horses, two of which became the first and second entries in the first
Arabian studbook in America.
Growth of the breed accelerated in 1906 when a gentleman named Homer
Davenport imported 27 Arabians. Soon U.S. breeders formed the Arabian
Horse Club. With 71 horses registered, the club was recognized by the
United States Department of Agriculture as the official keepers of the
Arabian studbook. In the late 1920s and early 1930s, W. K. Kellogg and
Roger Selby imported horses from England’s Crabbet Stud and established
breeding programs. Arabs were also being imported from Egypt, Spain
During this period, Arabians were touted as the epitome of the cavalry
mount, an opinion backed up by the breed’s dominance in the Cavalry
Endurance rides. The U.S. Army began breeding them with donated animals
and by 1943 had a sizeable Arabian herd (according to the Arabian Horse
Association, the Army had more Arabians than any other breed; according
to other sources the Arabians were the second largest breed category).
The U.S. Market Is Established
In the 1940s and 1950s, importations slowed as U.S. breeders established
their own lines. Upon the dispersal of Crabbet Stud in 1957, imports
picked up once again. This activity, combined with horses coming out
of post-WWII Europe, began a new phase in Arabian breeding in the U.S.
The International Arabian Horse Association, separate from the Registry,
was founded in 1950 to sanction horse shows, develop rules and license
judges. They became an affiliate of American Horse Show Association
(today the United States Equestrian Federation) and also purchased the
Half- and Anglo-Arabian studbooks.
The 1960s were a good time for Arabians in the U.S. Crabbet-bred horses
were hugely popular as show, performance and pleasure horses, with Marylander
Bazy Tankersley of Al-Marah at the forefront. Ironically (and sadly),
says former Arabian breeder Peggy Ingles, “these domestic Arabs
would later be called “plain” or “coarse” by
the people who created the marketing hype behind the more exotic and
imported Polish, Russian and Egyptian horses. Only time has proved the
value of these domestic mares’ contribution of soundness, sturdiness,
athleticism and temperament to the resulting offspring.”
Just about every business model dreams about having just the right high-profile
personality invest in its stock or purchase its product. Today, famous
people make their money leveraging their fame via publicists who make
But in the 1960s horse world, you just hoped that the right buyer, the
right owner would come along that would propel your training business
or breeding farm into the stratosphere.
In 1969, the Arabian world got that when singer Wayne Newton purchased
his first Arabian, the imported Russian stallion *Naborr, for the then
record sum of $150,000. Oscar-winning Hollywood director Mike Nichols
started breeding Arabians in 1970.
And then suddenly, just like that, the Arabian market took off; a tipping
point had been achieved, and Arabians were the hottest fad around, the
must-have piece of art and status symbol for celebrities, the rich,
the famous, and the wannabes.
In 1968, the top auction price for a top-quality Arabian was $25,000.
In 1970, the average price was $30,000 and by 1985, the average price
would jump to $478,000, and in between, numerous breeders tried to hitch
their wagon to this shooting star.
Scottsdale: Studio 54 for the Arab Market
Centered around Scottsdale, Arizona, a town famous for its prestigious
Arabian show and state-of-the-art breeding facilities, breeders such
as the LeCroix family, owners of Lasma Arabian Stud, and a few others
began conducting Arabian sales peddling their show and breeding stock
to the public.
Arabians of Polish breeding were Lasma’s specialty. They were
not only beautiful and correct, but incredible performance horses who
dominated the English Pleasure (saddle seat) and Park Horse classes.
It started with the importation in 1963 of *Bask, a Polish Arabian owned
by Lasma and one of only a handful of stallions to later win National
Championships in both halter and performance. His stud fee in 1963 was
a modest $500, but rose to $10,000 by 1975. *Bask ultimately sired 1,046
horses, 194 of which were national winners.
At Lasma’s first sale in 1971, 27 horses sold for an average of
$19,000 each, with a *Bask daughter topping the sale at $56,000. In
1973, Mike Nichols was high bidder of the sale with his purchase of
another *Bask daughter for $117,000.
the 1980s, there was a deliberate (and some say brilliant) marketing
push to get new owners interested in Arabian horses as an investment.
They were exotic, exquisite and rare–an attractive combination
to the wealthy. The tax advantage of horse ownership was the icing on
These marketing strategies targeted the rich and famous, promoting the
Arabian as “living art.” The tax laws during this period
allowed for complete depreciation of the cost of a breeding horse within
five years of ownership. Investors sought not only the tax advantages,
but also the status symbol of Arabian horse ownership. Prospective buyers
were wined and dined, attended seminars extolling the financial advantage
of investing in Arabian horses, and treated like royalty. It was an
exclusive club that was promoted as elite and elegant and it attracted
buyers like flies to honey.
The auctions themselves were opulent affairs, with performances by famous
musicians, such as Sammy Davis, Jr., Kenny Rogers, Olivia Newton John,
the Beach Boys and the Pointer Sisters. The LeCroixs had created an
atmosphere that others emulated, with fog machines, high-tech lighting,
and plush arenas that showcased their beautiful horses. At the height
of the buying fever, Lasma would award a brand-new Cadillac to the highest
bidder at each sale. It is said that perhaps the high seller and its
price was decided in advance, with shills in the audience helping to
achieve this predetermined goal. In many instances, a mare would be
sold as a three-in-one package: the mare with a foal at foot with another
breeding or already pregnant, making her ridiculous cost look like a
Frequently, horses that were top sellers didn’t even change hands
after the auction. These were scenarios known as “trading paper.”
Deals were done this way to create excitement and encourage more bidding.
Keeping up with the Joneses was definitely a driving force.
The farms holding the auctions got a 20% or better commission on each
horse sold, plus they required that the horse be boarded, conditioned
and trained for the three or four months prior to the sale at their
facility. At some point during this unprecedented buying frenzy, banks
became interested in the financing of these huge purchases, whereas
before, sellers held the notes. This opened up a whole new aspect of
the market whereby sellers received their money more quickly and buyers
only needed 20% cash as a down payment.
Once they bought a big-name horse, the sellers were sure to get buyers’
photos with the horse in all of the newspapers and magazines. At the
big shows, the owners were treated to parties, private viewing boxes
and more photo ops. It was a heady time and these guys knew how to bring
the fun coupled with the accolades.
In order to continue making a profit, a steady influx of new owners
was necessary. Most were not horsemen, so this created a dependency
on the trainers that continues today. Coupled with trainers becoming
judges, a new dynamic wasformed. The marketing and publicity machines
behind the sales encouraged prices to skyrocket as the newbies continued
to pay exorbitant prices for the sellers’ other horses, assuming
that was their true value.
Many celebrities were introduced to the Arabian horse via these breeders
and trainers, and other owners such as Occidental Petroleum’s
CEO Armand Hammer. People such as Merv Griffin, Buck Henry, Shirley
McLaine, Jackie Onassis, Patrick Swayze and Candace Bergen found themselves
caught up in all of the excitement. For noncelebrities, the attraction
was to be able to rub elbows with the famous and participate in the
exclusivity of owning these special horses.
At the height of the frenzy in 1984, a mare named NH Love Potion sold
for $2.55 million. She was a “Triple Crown” winner in halter
competition, meaning she had been named Champion at Scottsdale, U.S.
Nationals, and Canadian Nationals. Unfortunately, that buyer defaulted
on the loan, the mare was repossessed and resold. She only produced
three foals in her lifetime.
Also during this time, the imported Russian-bred stallion *Padron was
syndicated for a record-breaking $11 million by David Boggs and went
on to be the sire of over 700 horses, many of them national winners.
There were several *Bask sons that were syndicated for $75,000 to $250,000
per share. Moniet al Saharaf set a record for the highest Egyptian Arabian
stallion syndication in 1986 at $10 million.
The prices being paid at the time didn’t necessarily reflect the
actual value of these horses, as the trainers/promoters would roll marketing,
breedings to their stallions, and training services into the ultimate
price paid for the horse. This resulted in allegations of impropriety,
inflated appraisals of value, shilling, and many lawsuits.
The Gold Rush
The skyrocketing auction prices Arabian horses brought had a Gold Rush-like
effect on horse people or wannabe horse people, with everyone wanting
to get in on the Arabian act, hoping to breed and sell the next $100,000
or million-dollar horse for themselves.
Between 1982 and 1986, over 100,000 purebred Arabians were registered
in this country (more than had been registered from 1908 through 1973).
The number of Americans owning registered Arabians went from 11,000
in 1965 to over 110,000 in 1986.
Like the other excesses of the 1970s and early 1980s, it was all about
to come to a screeching halt.
Party Over/The Hangover
Perhaps it is coincidental, perhaps not, that after a January 13, 1986
article by E. M. Swift & J. E. Vader in Sports Illustrated revealed
the excesses of the Arabian market, the horse industry in its entirety
found itself caught up in and cut down by The Tax Reform Act of 1986.
It could be argued that this Sports Illustrated article played a role
in convincing legislators to disallow the full value deprecation and
expensing of horses, which in turn led to the collapse of not just the
Arab market but the race horse breeding industry as well.
Certainly, the authors chided our elected officials when they wrote:
The greatest fool of all is probably Uncle Sam, whose loophole-filled
tax code allows Arabians, like milk cows, to be depreciated for their
full value in three to five years, depending on their age. The expense
of keeping Arabians can be written off dollar for dollar, and any profit
from their resale is taxed, not as income, but as a capital gain, provided
one has owned a horse for at least two years.
For unlike any other investment of its kind…gold, fine
art, real estate, diamonds or stocks,” reads the press release
from Star World of Arabians, an offshoot of Lasma, “…The
Arabian horse is a living creature that can reproduce in its own image…return
affection and turn a profit.” Let’s see Merrill Lynch match
that. Actually, the Wells Fargo Bank is willing to try. “Consult
with our Arabian horse specialist…” reads Wells Fargo’s
ad in Arabian Horse World…
The 1986 tax reform law discontinued the passive investment allowance
that was so beneficial to horse owners and breeders. Many horse operations,
large and small, lost millions of dollars over the next few years. With
a down market coupled with an inventory at an all-time high, Arabian
horses that had previously been selling for six figures were now being
repossessed by banks, starved in fields or dumped at low-end auctions
While hundreds jumped ship, there were nevertheless die-hard horsemen
and passionate lovers of the Arabian breed who rode out the crash, refocusing
their efforts and waiting for the rebound. Many horsemen saw the crash
as a market correction and something, in the long run, that would be
good for the breed. The new, smaller market allowed for the serious
horseman to focus on breeding better horses and promoting the horses
themselves, and not the financial advantages, to new buyers.
Naturally, breeding and registration slowed considerably. From 1986
to 1991, registrations dropped by more than 15,000 horses per annum.
The effects of our tax reform echoed in other countries as sales of
foreign horses dropped dramatically. In 1988, Tersk Stud offered 87
horses but only 18 sold; the highest price was $36,000.
In the U.S., prices had plummeted to an average of $10,000-$25,000 by
the end of the decade. Lasma liquidated its holdings in Arizona and
A Leveling of the Market
Throughout the 1990s, registrations held steady at around 12,000 per
year, with a slow decline in the 2000s to a unprecedented low in 2010
of fewer than 5,000.
Also affecting the breed in the ‘90s was the difficulty of establishing
purity of blood. The AHR took a stand in 1998 against accepting certain
horses/studbooks into their own and splitting from the World Arabian
Horse Association (WAHO). This put a strain on the importing and exporting
of Arabians and semen to and from the U.S., until an agreement between
the two organizations was reached in 2008.
In general, prices for horses in America rebounded when supply wasn’t
(It should be noted that, after the Arabian fad faded, Wayne Newton
is one of the few celebrities to remain involved with Arabians and has
bred more than 600 foals, several of whom have won national championships;
he is well respected by Arabian enthusiasts for his serious involvement.)
Arabian Market Today
Although the U.S. economy is still struggling, and likewise the equine
industry, the Arabian market overseas, specifically in the Middle East,
is strong. There are still reported sales of horses in the millions
of dollars (with a record price in 2008 beating the 1985 record price)
and stud fees of five figures, but these are the exception rather than
In looking at the programs offering prize money, there appear to be
fewer people breeding on speculation, and more owners just breeding
for themselves, which is a welcome change for many fans of the breed.
That is not to say that there are not still plenty of speculators breeding
ostensibly for sales, as the Canterbury case has illustrated.
A new market for amateur-friendly Arabians has gained momentum in the
last ten years, especially in sporting disciplines such as eventing.
Because of this growth, AHA instituted a Sport Horse National Championship
Horse Show that features Arabians, Half-Arabians and Anglo-Arabians
competing in dressage, working hunter, jumpers, conformation and carriage
driving classes all judged by USEF- and USDF-carded judges. This is
the only breed-specific sport horse show in the country.
This trend toward performance horses has also been a less expensive
route for showing Arabians as it is not as dependent on professional
trainers handling the horses in traditional Arabian venues. This gives
owners and exhibitors a more economical means to both enjoy and compete
at a regional or national level with their Arabian horses.
Today, despite the plummeting registry numbers, there are more Arabian
horses in the U.S. than the rest of the world combined. Surprisingly,
67% are owned for recreational purposes.
As with any breed of horse, the elusive next great champion or next
sale record-breaker leads to overbreeding, and with that comes the culling
of the young stock that isn’t considered up to par. As with any
breed registry, horse owners need to balance the competing needs of
the registry (which usually is financially dependent upon increasing
the number of registrations, which means encouraging more breeding)
with what is ultimately in the best interest of the horse itself.
Despite the claims that horses from certain bloodlines are being valued
at $30,000 or more, the average Arabian horse still sells in the $5,000
range; according to the Sports Illustrated article, even at the height
of the ‘70s/‘80s Arab fad-frenzy, 80% of the Arabian horses
in the U.S. sold for an average price of $5,000…so not that much
has changed in terms of the average price.
Apparently the mind-set of the go-go ‘70s and ‘80s still
also lingers in a few breeders, unable to shake off the belief that
their horses are worth five, six–maybe seven figures. Like a gambler
addicted to a high-stakes game of dice, the next roll could be the big
Horses…The Story Continues
There is no justification, by Maryland law or by decent humane standards,
for failure to ensure that every horse in one’s care and/or possession
receives a certain minimum standard of care.
By no means does this review of the rise and fall of the Arab speculation
market justify a failure to care for one’s animals. This review
merely endeavors to put the monetary value claims associated with the
Canterbury Arabians in context for those horse people not familiar with
the 40-year rollercoaster ride of the Arab market, a boom market that
created a Gold Rush mentality that still exists in certain pockets…or
backwater creeks. No doubt that the Arab world was–and will remain–unique
among the various horse markets, as no other breed has ever been so
vigorously and aggressively collected as “living art,” rather
than as an animal to be ridden or driven, for sport (including racing)
or for pleasure.
It remains to be seen whether the owner of the Canterbury Arabians,
Marsha Parkinson, pleads guilty or is found guilty of neglect. This
is still the U.S., where we presume innocence until proven otherwise.
Representatives for Parkinson have raised questions about whether or
not all legal procedures and protocols were properly addressed prior
to the seizure, as well as questioning the need at all for the seizure.
Neglect charges have been filed, and a trial date has been set. The
Equiery will continue to follow the case.
Fueling speculation about the motives behind the seizure are the early
press releases that gave the appearance that seizure was an opportunity
for rescue facilities to grandstand, and the seized horses were props
for a massive fund-raising opportunity. Were these just poorly worded
press releases by over-enthusiastic, under-monitored or poorly trained
staffers? Or is there some justification to this speculation? The
Equiery will continue to follow this story as well.
Arabian Bloodline Primer
by Peggy Ingles
One of the most controversial topics surrounding
the seizure of the Canterbury Arabians is that of “rare
bloodlines” and “preserving the bloodlines.”
For those not versed in the finer points of Arabian pedigrees,
here is a brief introduction written by Peggy Ingles, a new Equiery
artist and a long-time Arabian breeder.
The Blunt family began breeding Arabians at their Crabbet Park
stud in England in 1878. They began with imported horses from
Egypt and their influence has continued to modern times. Skowronek
was their most important contribution to Arabian breeders. He
was bred in Poland and is best known as the sire of Raffles, who
was imported to the U.S. in 1932. Marylander Bazy Tankersley,
Homer Davenport, W. R. Brown (Maynesboro Stud) and W. K. Kellogg
were the U.S. breeders importing Crabbet Arabians. The horses
of these bloodlines are known today as CMK (Crabbet-Maynseboro-Kellogg).
Egyptian Arabians come from the breed’s geographical cradle
where they have been cherished and carefully bred for over 2,000
years. Their popularity in the U.S. blossomed after Henry Babson
purchased seven horses there in 1932. The straight Egyptian Arabian
is still considered the purest of pure Arabians, and is valued
for its extreme refined appearance and friendly temperament.
Polish Arabians were bred as far back as the 16th century and
were nearly destroyed by World War I. Their breeding program is
based on its broodmares and all horses are tested on the racetrack.
The horses are offered for sale by the state stud only once a
year and became hugely popular in the U.S. during the boom years
of the 1970s and early 1980s. They are known for their sturdy
builds and athleticism.
French Arabians were developed almost exclusively as race horses
and are more Thoroughbred in appearance. They contributed to the
development of the Anglo-Arabian horse and therefore to the modern
warmblood breeds. French Arabians are still very popular for racing
The Russian Arabian began at the state-controlled Tersk Stud in
1930 with horses imported from England and France. There was some
racing in the late 1800s but most of the purebreds were lost during
the Russian Revolution. Tersk benefited during WWII from Polish
Arabians that were “rescued” and thereby utilized
in their program. They found their way to the U.S. and the Russian
blood was well represented in the show ring in the late ‘70s
and early ’80s.
Breeding of Spanish Arabians began in the early 1900s with imports
from the Middle East, England and Poland. Since then, there has
been very little outside blood added. Spanish Arabians only make
up 0.1% of the total Arabian population in the U.S. and are often
used as an outcross. They are known for their athleticism and
©The Equiery 2011