The rich ride out the recession in Argentina
Source: Financial Times
By: Oliver Balch
Equestrian breeding centres line up one after another along the highway into Pilar, a smart satellite town an hour from Buenos Aires. In polo circles, the stretch is simply known as the Golden Mile. All but a few of the world’s best players have farms here.
The UK-based Enigma polo team is the latest newcomer on the block. Built over 18 hectares of perfect polo-playing terrain, its new state-of-the-art complex boasts 40 stables, a 320-metre exercise track, a private gym and two immaculate pitches.
“Our idea is to provide a first class centre where people can come and play polo and where we can also showcase our horses”, explains Malcolm Borwick, an England international player and the principal developer of the facility.
Borwick and his French-born patron form part of a growing number of foreign investors moving into Argentina’s profitable polo industry.
Australian media mogul James Packer, for example, sponsor of the crack Argentine team Ellerstina, has a ranch on the neighbouring plot.
Others to have established breeding centres nearby include Italian businessman Alfio Marchini, UAE tycoon Ali Albwardy and Simon Tomlinson, owner of the Beaufort Polo Club and father of two of Borwick’s England team-mates.
As the finals of the Palermo Open on December 5 close the international polo season, it is clear that this exclusive sport has weathered the global recession well, although growth at the lower end of the game has slowed as less well-off club members tighten their belts.
“But the very rich aren’t affected much by the crisis,” observes Thomas Hume, manager of La Aguada, one of Argentina’s best teams.
The news is welcome in Argentina. Death and bankruptcy are the only reasons to quit polo, according to an adage in the sport. As long as the country’s mega-rich patrons remain healthy and wealthy, its polo industry should as well.
Argentina’s ability to turn a profit from the King’s Game, a costly hobby everywhere else, owes much to the world-class quality of its bloodlines. With its historic gaucho culture, this horse-obsessed nation has been breeding pedigree horses for generations.
Today, the country’s 550 registered breeders rear around 7,000 polo ponies per year, many of which are destined for export. The best of these can fetch $50,000 or more.
Enigma’s breeding programme currently counts 50 ponies, all of which will be destined for sale to foreign players once they are match ready.
“It’s much more expensive to breed in Europe or the US. So it makes much more sense to breed ponies here and then export them later,” says Guillermo Buchanan, a member of the Argentine Association of Polo Pony Breeder’s executive committee.
Argentina’s low cost base owes largely to its plentiful and inexpensive prairies, coupled with cheap rates for expert labour.
The home of polo has also carved out a niche for itself in embryo transfer, a form of genetic engineering that is banned in racehorse breeding but legal for polo ponies.
Again, economics plays a role in Argentina’s success. At around $2,500 per transfer, the cost is about a sixth of what it would be in the UK, points out Eduardo Padilla, a breeder from Buenos Aires province.
“After more than a century breeding horses specifically for polo, the Polo Argentina pedigree breed has the best genetic profile for the sport,” he adds.
La Irenita embryo clinic, one of the largest in the country, sells more than 1,000 embryos per year. Around 70 per cent are inseminated into a receptor mare and then sent overseas.
A second major factor in Argentina’s ability to turn polo into a lucrative business is its crop of exceptional players. Of the 12 best-ranked players in the world, 11 are Argentine. The odd one out is from neighbouring Uruguay.
Wealthy polo aficionados pay handsomely to take the field with the top players on the planet, explains Diana Butler, spokesperson for the Guards Polo Club, a favourite with the royal family.
“Argentina’s stars fly to the UK every summer to play with their regular patrons. That’s what attracts these guys to the sport. It’s not like Roman Abromovich, who sits on the sidelines,” she adds.
Argentine polo ace Adolfo Cambiaso, for example, is contracted for an undisclosed amount by UAE businessman Albwardy to wear the colours of Dubai, his private team.
In recent years, tourism has also emerged as a healthy sideline for Argentina’s polo industry. From October to December, thousands of international polo aficionados descend on Buenos Aires to watch the Triple Crown, the sport’s three main championships.
“More and more people are now going for polo holidays too. You stay in a lovely estancia and have a relaxing time, but you also get to play with some first class players”, explains Ms Butler.
La Aguada is typical of the trend. Ten days at its “polo clinic” costs around $4,500. The price shoots up to as much as $30,000 if visitors want to play alongside a squad member in one of the club’s private tournaments.
Commercial sponsorship, on the other hand, remains relatively underdeveloped. Big name sponsors such as the jeweller Cartier are few and far between.
The decision by US sports channel ESPN to provide live coverage of this season’s Argentine Open championships, however, could well attract more advertisers.
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