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Horse on the gallops

The Partnership Agreement & Totally Transparent Costs

It is very important that every racehorse partner fully understands their obligations to the partnership, particularly in terms of payment. Equally they have a right of full access to detailed summaries of income and expenditure. We operate a totally transparent policy. Here are the key points.

Commercial Principles & Partnership Plan

  • Agreed budget for purchase of the horse.
  • Detailed estimate of likely costs for two years.
  • Assumption that the horse stays in training for that period.
  • Annual review of the horse’s performance.
  • If the horse under-performs, it may be sold.
  • If the horse has potential, it may be retained.
  • All decisions taken by the partners themselves.
  • Any conflicts of interest actively avoided.
  • All shares are equal.  There are no split shares.

Total Cost Transparency

  • Quarterly and annual income and expenditure summary.
  • All costs itemised.  No hidden margins or mark-ups.
  • Income covers prize money, appearance money, sponsorship, BHA and ROA discounts.
  • Expenditure covers purchase costs, pre-training, training, out of training and sales.
  • Purchase costs cover the purchase price, auction fees, agent’s commission, vetting, transport.  No luck money or any add-ons.  The costs are what the partners actually incur.
  • Post-purchase keep, breaking and pre-training costs are itemised.
  • Full training fees are broken down into their key components.
  • All other costs are listed e.g. entry fees, registrations, gallops etc.
  • Out of training costs are kept to a minimum.
  • Sale and / or retraining costs are identified.

Partnership Agreement

  • All partners sign a written agreement.
  • Covers the key decisions on the horse’s running and future sale.
  • Assumes an initial term of two years (which can be reduced or extended by the partners).
  • Binding on payment i.e. a one-off payment for purchase and estimated training fees over the two-year period or one-off payment for purchase and a quarterly payment schedule.
  • Covers eventualities such as a partner wanting to exit the partnership.
  • Further charges may be made if actual costs exceed the estimate.
  • Exceptional veterinary costs are a typical example.
  • Detailed review annually of actual costs against estimate.
  • Annual dividend paid if income allows.

Administrative Costs

  • Owners for Owners’ administration costs are kept very low.
  • £900 in total per horse is the maximum total cost.  This equates to £150 per owner, per year.
  • Covers VAT administration, account information etc.
  • Each partner pays their proportion of the annual cost.
  • Insurance is at the discretion of each partner.

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