|AQHA Explains New Improvements to Reinvigorate Incentive Fund|
|American Quarter Horse Journal, AQHA|
ABOUT THE AUTHOR
Recently, AQHA, working through a task force that was assembled to review the AQHA Incentive Fund, announced changes to the valuable fund that are aimed to keep it viable and stimulate participation.
Those changes, the first significant changes other than modifications to stallion nomination fees since the fund’s inception in the 1980s, have been getting a lot of discussion since the announcement.
In this question-and-answer piece, AQHA explains how the changes can benefit all participants, and why the changes were necessary.
Q: Why is AQHA making changes to the Incentive Fund?
If you think about it, changes to the Incentive Fund were long overdue. Since the 1980s, AQHA has added classes, added divisions (Select) and added more ways for people to show their Incentive Fund horses for longer periods of time. If the fund is going to be valuable to stallion owners (making offspring more valuable) and lucrative for competitors (rewarding them for their points), sweeping changes had to be made.
Q: Why are you making changes all at once?
Q: Now you’re making exhibitors pay while reducing their take of the fund by 10 percent. Why?
Hypothetically, let’s say AQHA is successful in the first year at getting point values to $35 per point. Exhibitors would earn 70 percent of that $35 or $24.50 per point. If they paid for one division only ($50), they would see a return on their investment after earning only 2,5 points ($61.25). If they continue showing, their returns will increase more quickly than they would if point values remain where they are today (for 2011 payouts, it is expected that point values will be less than $20 per point - $20 @ 80 percent = $16 per point paid to exhibitors). An exhibitor who pays the Incentive Fund competition license for both open and amateur would have to earn 4.5 points to be ahead.
NOTE: Based on exhibitor feedback: The Incentive Fund competition license fee may be paid at any point during the year. This is a change from what was previously announced. Many exhibitors felt they wanted to gauge how active their show year might be before paying the Incentive Fund license. If an exhibitor opts to wait until March to pay, he or she will be eligible to start earning Incentive Fund money from that point forward.
Q: Is this the right time to “tax” exhibitors who might already be feeling the pinch?
Q: Is the Incentive Fund going broke or at risk of being depleted?
Q: If you’re trying to support stallion owners and nominators, why did you increase the fee to enroll foals by $25 (now $125)?
Simply put, the Incentive Fund works for two primary reasons: 1). Stallion owners nominate their stallions based on the number of mares bred; and 2). mare owners enroll their foals into the program for a lifetime of opportunities. If these two groups are rewarded with larger percentages and continue to see the benefits of the Incentive Fund, then they will continue to support it – or, hopefully, increase their support.
When you add in the new support of the owner/exhibitor, the fund’s sustainability looks a lot better for the long term.
NOTE: Based on nominator and stallion owner feedback, if a stallion owner who nominates his or her foal(s) into the program is the record owner of the same horse(s) in its first year of showing, that stallion owner/nominator will not have to pay the first year’s Incentive Fund license fee for that horse. They have supported the fund by nominating their stallion(s) and enrolling their offspring, so the task force modified its original motion by giving stallion owners/nominators their first year of showing without having to pay the license fee.
Q: Why the transfer fee? It seems like once a horse/owner has paid the Incentive Fund license fee, it should extend to subsequent owners during that competition year.
Q: What if an owner doesn’t pay his or her license fee? Do the nominator and/or stallion owner get their 15 percent each?
Q: You’re allowing Racing Challenge-enrolled horses into the fund for $500. Does that mean you will pay stallion owners and nominators of those Racing Challenge-enrolled horses that get in to the Incentive Fund?
To reap the full rewards of the Incentive Fund, owners of stallions whose primary interest is racing, would have to enroll their stallions and nominate their babies. The $500 fee allows potential buyers looking for a race-bred horse the chance to get into the fund and earn 70 percent of the point values. That $500 fee gets the horse enrolled in the Incentive Fund. The competition license fee(s) will still need to be paid.
Q: Can I pay my license fee at a show?
Q: If I buy an Incentive Fund-eligible horse from someone who did not pay the license fee, can I – as the new owner – pay the fee when I do purchase the horse (NOTE: This scenario is different from the previously publicized fee at time of transfer)?
Q: Why the 200-point cap?
NOTE: In the originally publicized changes, points were “capped” at 200 with anything earned in excess of 200 points paying at 80 percent of the value. That was subsequently changed and the point cap is now 50 percent of the point value.
Q: How much money does AQHA make off the Incentive Fund?
Q: Why doesn’t AQHA have a sponsor for the Incentive Fund the way it does for the Bank of America Racing Challenge?
Breeders, amateur owners, professional riders and show outlets across the world could be open to potential sponsors of the AQHA Incentive Fund, giving them a reach and impressions that few programs could provide. We encourage anyone who knows of an organization that might be interested in talking to AQHA regarding sponsorship to contact us directly.
Q: Who serves on the Incentive Fund Task Force:
AQHA Show Council members at the time of the meeting also met with the task force and in addition to the above-indicated people (*) included:
AQHA Executive Committee members present included:
In summary, when the Incentive Fund was instituted nearly 30 years ago, it was considered to be the most innovative show rewards program of its time to hit the American Quarter Horse industry. If stallion owners and nominators continue to support the program, along with the added support of owners of eligible American Quarter Horses, the Incentive Fund could be worth more than $3 million for 2013 alone. And if support increases, it’s easy to see how the fund, and, subsequently, the rewards paid to all supporters could yield larger dividends than are seen today.
Give us your feedback. When the initial changes were announced, we heard from interested parties and made modifications. In the end, we hope you continue to be part of horse showing’s richest, most-comprehensive incentive program.