Frozen Assets
From the monthly column "Thoughts I Had Driving Home From The Dog Show" By Caroline Coile. ShowSight Magazine, September 2017 Issue.
At virtually any large show you can see the special vendor with a line of happy male dogs leaving. It's now routine to have our dogs' semen frozen. But it's far less routine to ever use it. For some, just knowing their dog has a pellet of immortality, or a straw of insurance, is enough to justify the expense. Fewer will ever use the semen, whether because they don't have the right bitch, are never asked, or find it too costly. Of those who do use it on an outside bitch, very few have considered the important differences from a financial viewpoint to consider compared to the traditional way of breeding.
Oops…
Let's start with the first concern: What happens if the semen is lost? And yes, it can happen. Many have heard of the Whisperwind Poodle case, in which 122 frozen semen samples from five Standard Poodles were allowed to thaw due to an error after being stored there for ten years. The facility's insurance company offered to pay out $1000, representing actual costs of collection and storage. The semen owners went to court, and in 2012 a jury awarded them $200,000. This value was not based on the value of the puppies that could have been produced, but on the lesser value of the stud fees that would have been earned.
While the Whisperwind is far from the only such lawsuit stemming from lost semen, it is the most expensive to date. The take home message: If you have irreplaceable semen, store it in more than one facility. Tanks can fail, Mistakes can happen.
In fact, mistakes happen more than you might think. Kelly McIntosh was ecstatic to finally get her Aussie bitch—she'd already had two failed attempts with chilled semen, one because they missed her ovulation and the other because the package was lost in transit and showed up three days later, ruined. The third time was a charm—or so she thought. She arranged to have frozen semen stored at the vet and surgically implanted. Three days later the veterinarian called and apologized; she'd implanted semen from a working Aussie whose semen had just been shipped in. The mistake wasn't realized until the botch that dog was supposed to be bred to showed up and they couldn't find his semen. They did arrange for one of the very last straws of that male to be rushed in and the bitch did have a litter of puppies, but that was small consolation to Kelly, whose conformation bitch was now in whelp to a dog from working lines. She ended up with two very hard to place puppies, along with a promise of free storage and surgical AI in the future.
In another case a BIS winner was DNA tested before being bred and his parentage found to be inaccurate. AKC cancelled his registration. The stud owner had to get DNA samples from all her stored semen, and the bitch owner from all her males. It turned out the facility had shipped out the semen from the chosen dog's brother. The dog was reinstated with a new sire. They sued, and the stud owner was awarded $8000 (in part because she had lost several breeding units doing DNA on the other frozen dogs) and the bitch and offspring owner was awarded around $10,000. The amount also included the DNA testing as well as the shipping and insemination costs. "The facility was never nice about it, so we got a lawyer," says the stud owner, whose name cannot be disclosed as part of the settlement agreement.
Too often workers don't examine the labels as they should, so mix-up between semen owned by the same person occur. In one recent case the breeder wondered why her litter resembled her other stud more than the planned one, so she DNA tested them at several years of age. She was right. She brought the mistake to the facility's, AKC's and the puppy owners' attention. The registration was changed, the owners were just as happy, and the championships they had earned stood.
The unhappiest ending come when dogs are inadvertently bred to semen from another breed. There was the 2009 case in which a Pembroke breeder sued a facility after her dog was inseminated with Great Pyrenees sperm. In at least one case a frozen semen mixed-breed litter was the result of a spiteful worker who managed one last caper before being let go. But before you get too worried about wrong stud dogs, it's very rare and probably more rare than mismatings when sending bitches to the stud owners for live service when they own more than one stud!
Ownership
Then there's the topic of ownership. If you thought co-ownerships were bad with living dogs, just wait until you see the headaches they cause with frozen semen. No two freezing facilities seem to treat the matter the same, so while one may insist that the semen be under the control of only one party, others may let any of the co-owners control the semen. What happens if one co-owner tires of splitting the storage fee? Or one agrees to breed to a bitch that the other disapproves of? Some even acknowledge whoever brought the dog in for collection and freezing to own the semen; something to consider the next time your friend offers to dogsit!
What happens to the semen after the owner's death? Some facilities ask for a "next of kin" so to speak—would any of your relatives really want to pay storage fees for your dogs after you're gone? Would anybody? Would it be considered part of your estate, or even subject to inheritance tax? Or would it, as happened in one case, become the property of the storage facility, to be used (and sold) as they deemed? These need to be decided before you take the leap. Or, as one friend of mine is contemplating, just have a "garage sale" when you get too old to breed anymore!
Stud Fees
But let's say all of that is settled, and you have an inquiry! What will you charge? There are two schools of thought here. The first is that the bitch owner is paying a lot of money for a very iffy breeding. She's paying for ovulation timing, semen preparation, shipping, and insemination. Depending on location, this will likely add up to several thousand dollars. So especially among friends, or in low population breeds where stud owners are more involved in litters, there is the tendency to say "no puppies, no charge." If you have a live stud dog, and the bitch owner has paid for all expenses, this is an option. But if you have a deceased stud, then school of thought #2 applies: You are selling an irreplaceable product. Whether puppies result or not, you have used up one breeding opportunity. If you have more than you will ever need, you may afford to be more generous, but generally, you should charge for the semen, not the pregnancy. Remember also you have expenses in initial collection and in storage for many years; I have semen from 1992, so at about $90 per year storage plus $350 collection that semen has now cost me about $1700.
Let me repeat: With frozen semen, you are not selling a stud service; you are selling a product. That means that, especially when dealing internationally, you have no control over that semen after you sell it. They can split it up and inseminate more than one bitch, sell it to your worst enemy, or decide to save it themselves for whatever reason. It's their property.
This becomes especially important with international shipments. Shipping overseas is expensive, so many semen owners send enough for a second try should the first one not work. But what if the first one works? Should the bitch owner be able to sell the remainder? I don't think too many stud owners will be happy about somebody else collecting their stud fee. Should the bitch owner be forced to, or allowed to, dispose of it? What if it is rare semen from your deceased dog? If you agree to store the semen overseas, who pays the storage fee? Basically, unless you can keep an international lawyer on hand, it comes to down to a wireless handshake and both your good words. Many years ago a friend sent enough semen for many breedings overseas, and was told it was thawed in transit. She was to receive a certain price per puppy that resulted, but there went that. Only in subsequent years that breeder had several litters that strongly resembled my friend's stud…
As you might imagine, the horse world is somewhat more organized when it comes to the finances of frozen semen. Ann Egan runs a USDA approved semen export center for equine semen. She kindly let me see one of the contracts they typically use. Among the main points: They require a nonrefundable stud fee at the time semen is shipped. There is no “live foal” guarantee, but if no pregnancy results, a return service for the following season only is offered. The return service covers only semen. The semen provided is for one pregnancy. If any remaining semen is used to obtain multiple pregnancies, the female's owner is responsible for the stud fee for each pregnancy. The contract cannot be transferred to anyone else without consent of both parties. Registration papers will not be signed until all fees are paid. Egan says the provisions are the same for deceased studs, but most owners are much choosier about who gets the semen because there is a finite supply.
Egan brings up an additional concern: "Sometimes people will split doses and inseminate two animals but only pay one stud fee. It can be a real problem." Contracts must make clear who the intended bitch is. Which brings us back to contracts. Egan is concerned with the lack of contracts in the dog world overall. "I will never breed a dog without one," she says. And I never let canine or equine clients sell semen without one. I just got a call from a breeder who shipped semen to the US from Mexico. All kinds of issues. My first question was what does your contract say? It's sad."
Egan also admits the live foal/puppy clause can be hard for some to accept. "There's a good reason for that. You buy semen from me. If the horse gets pregnant, the mare owner has 340 days to screw it up. Same with a bitch owner. You pay for semen. I am not Mother Nature and I can't control if a female ovulates. Or how she is taken care of by her owner during pregnancy. If a female gets pregnant, the stud has done his job. And sometimes if she doesn't the stud has still done his job…contracts just try to make the murky clear."
And that is why before you ever freeze your dog's semen—you need to consider all contingencies, write them down, and try your best to make the murky clear! Contracts don't challenge friendships—they save them…
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