Economy looks as if it’s hot to trot
LONDON — On a chilly evening in December, a five-year-old mare named Dancing Rain clip-clopped into the ring at Tattersalls, the auction house in Newmarket, England, where buyers of thoroughbred horses from all over the world descend to part with their millions.
A silence fell on the standingroom-only crowd as Dancing Rain strutted her stuff, with a Lot No. 1533 sticker slapped on her hip. She wasn’t alone. Her stomach bulged with the evidence that she was nine months pregnant by Frankel, the stallion many regard as the greatest racehorse to hit the track in the last half-century.
Just two years earlier, Dancing Rain had burst through the gates at Epsom Downs Racecourse, seized an early lead and never let go, overcoming 20-1 odds to triumph at the Investec Oaks, one of Britain’s top five races.
At Tattersalls, she was the first Oaks winner pregnant with her first foal to be auctioned in 50 years. Her owners, brothers Lee and Martin Taylor, London lawyers and relative newcomers to the world of horse racing, were about to see their ship come in. “Amazing presence and special to be around,” Tattersalls chairman Edmond Mahony repeated from the wooden podium while scanning the crowd for bidders.
Bidding opened at 2 million guineas, or 2.1 million pounds. (Horses in England are still priced at auction using an antique monetary unit worth five pence more than a pound.) Offers spiralled to over three million guineas before Pinar Araci, daughter of Turkish industrialist Ibrahim Araci, offered 3.9 million guineas.
As the bidding wound down, Mahony caught the eye of a man in a green-felt hat standing at the crowded entrance with a mobile phone to his ear. He promptly bid a decisive 4.2 million pounds ($6.9 million US).
“Sold to John Ferguson for 4 million guineas!” Mahony declared as his hammer went down. Ferguson had bought on behalf of Sheik Mohammed bin Rashid Al Maktoum, the ruler of Dubai and the owner of Darley Stud, one of the two largest thorough bred operations in the world.
The sale of Dancing Rain is the latest sign the bloodstock business is booming. Buyers forked over 66 million pounds at the December sales, contributing to a 52 per cent rise in the average price of a broodmare from last year.
In the past, the trading of horseflesh has proved a reliable barometer of a broader economic recovery. In 2006, prices at Tattersalls jumped 16 per cent, prefiguring a 2007 bump in the U.K.’s gross domestic product. Conversely, when the financial crisis struck in 2008, bloodstock prices plummeted almost 20 per cent.
If the December sales are any indication, the economy may again be hot to trot. The bloodstock business is like the futures market, says Teddy Grimthorpe, the racing manager for Prince Khalid bin Abdullah of Saudi Arabia, Frankel’s owner. Buyers are using a broodmare’s pedigree to predict whether she can produce a foal that will win as a three-year-old.
“Dancing Rain is like a Picasso,” Grimthorpe says. “You can try to value her, but it inevitably comes down to two bidders and how much they want her.”
In the end, Sheik Mohammed wanted her enough to shell out about one-third of the $21 million he earned in prize money worldwide in 2013 through his racing operation, Godolphin. Blissfully unaware of how she’s transformed the fortunes of her former owners, Dancing Rain remains a hopeful sign of a continuing recovery.