Before I get off on my analysis, there are two blogs to read if you really want to examine inbreeding. First is Boojum's Bonanza. With a focus on Performance Points and sales prices, the blog does an amazing job at looking at expectations (sale price) versus performance (points) and seeing if inbreeding actually enhances, detracts or has a neutral affect on production. Great reads, if you have time. Second is Bloodstock in the Bluegrass, which, while not dedicated to inbreeding studies, has examined the topic frequently.
Today at the Bloodhorse, the specter of negativity is raised with Frankel being too well bred. True, breeders do tend to stay away from close inbreeding, for reasons that seem to be obvious. But why? In the case of Frankel breeding a daughter which is out of a Danehill mare, you're talking about a foal with a 3x3 inbreed. Is there any statistic that shows you are less likely to get a good runner? Let's ask Boojum (who backs it all up with data from 2003-2007 in a series of posts on the site):
I have heard it said that inbreeding (particularly close inbreeding) produces better stakes winners overall but fewer stakes winners overall. In baseball terms, more home runs but a lower overall batting average. Might be some truth to that. That is what the numbers seem to indicate anyway. But in terms of overall batting average (PPI versus Price Index), close inbreeding is definitely not a good strategy.
Putting this in TFT's language: You might get a bigger hit with 2x4, 4x2, and/or 3x3 inbreeding, but you most definitely will not get an efficient horse*. I mean this in that you rarely will get a horse that lives up to the perceived value of the pedigree. This may be a fault in the system insofar as there is an arbitrary value added in the sales ring to relatively close (but not obscenely so) inbreeding. Or perhaps the market is too efficient with these pedigrees as they go through the ring, as Boojum has found that the price only slightly outweighs the performance.
But here's my take: if you are breeding to sell, the commercial viability of a pedigree is far more important than anything else. You're looking to sell as a weanling or yearling, I'm really concerned with maximizing my return, not in getting a good runner that, based on the horses with similar pedigrees, exceeds expectations. So breed to Frankel if you think he'll return a high sales price and he fits your mare. If I'm breeding to run, that's a slightly different story. I need to ensure that my investment with the stud fee will be outweighed by the performance on the track. So if I think my cross will make more than $200,000 and pay the bills along the way, go for it and breed to Frankel. If not, find something cheaper to breed your mare to.
Inbreeding may not get a better runner. But it does seem to increase the perceived value of a foal for the sales. With the commercial side of breeding operations as large as they are, you most assuredly will see and feel the influence of the bottom line. Commercial breeders will breed horses that will sell for large amounts of money, plain and simple. But as a small timer trying to breed a good runner or two that might make me some money, I'm looking to exploit inefficiencies in the system. I'm looking for a stallion that fits my mare, accentuates her qualities while downplaying her weaknesses. And I'm looking for a value price. Not a cheap price necessarily, but one where I think I can make a couple bones. (side note: I'm mad that Shackleford is as much as he is. I've heard rumblings that some don't like him that much as a stallion prospect, but if he wasn't $20,000, I would have thought about him. Maybe in two years when his price will come down once the hype all fades into the past)
Frankel comes with all the accolades due a true Champion such as he is. His exorbitant price coupled with what will be unrealistic expectations may forever be a hindrance on the measure of his true ability as a sire (aka the Secretariat Syndrome). But regardless, a 3x3 inbreed is what it is: 25% of the overall genetic make up of a foal. And that's just based on a simple Mendelian cross, not on the actual complexities of an entire genome. So maybe it is 17%, maybe 26%, who knows.
So yes, maybe the cross keeps breeders away with some of their high end mares. But in the end, each mare must have the individual decision made that Frankel is the right stallion for them. If after examining the mare herself and her pedigree you think it works, cool. Lost in a notable amount of pedigree analysis (and I'm as much at fault as any) is the fact that each mare is different. How she looks, what kind of babies she's produced (by look, potential, and/or performance), her medical history, is it her first foal, etc, all play a large role in determining the choice of stallion. If after all that, you still think the 3x3, 2x4, or 4x2 inbreed is the right choice, do it. Just know there are no guarantees and the inbreed just puts you right in line with average prices and performances but probably means you either get the 1 in 1000 superstar (not likely) or the well bred underachiever (likely).
But the wildcard in all of this is the residual value that the fillies and mares have once their racing career is over. They may not have met the expectations on the track, but that doesn't mean they are not impeccably bred themselves. Then the process starts anew.
3x2, 2x3, or 2x2 in breeds aren't a good idea though. That's just too much of one horse. No data backs up any good performances in the modern era with a cross that close.
*The assumption is that sales price will be higher than the stud fee. As I take a swag at the math, the only way to be consistent is to assume that the fixed cost of the stud fee is less than the sales price.