Daily Racing Form National Digital Edition
KEENELAND EXPECTS A ‘DYNAMITE’ SEPTEMBER SALE
The Thoroughbred bloodstock industry has weathered major changes over the years, from the shifting foal crop, to the advent of stallion shuttling, to a major recession and recovery. But one constant has been the Keeneland September yearling sale, which will celebrate its 75th anniversary renewal from Sept. 10-23.
For the Keeneland September sale, one constant has been change. For the second year in a row, the bellwether auction will tweak the format for its marquee Book 1 portion that opens the sale. But with solid indicators in the economy, and positive momentum from this summer’s boutique yearling sales, Bob Elliston, Keeneland’s vice president of racing and sales, said he is expecting a “dynamite” run for the newlook September sale.
“From a macro sense, the market is very healthy right now; it feels like the economy is doing well,” Elliston said. “As we know, people want horses, they don’t need horses. So if you’re feeling good about your economic situation, with purse money coming up, with some positive metrics going around the business, I think folks are keen to acquire horses. The second reason, I think, we’re optimistic because a lot of buyers go back to proven results, and the September sale continues to deliver incredible results . . . . When you see how these horses go on to win on the very biggest stages, domestically and internationally, I think folks like to repeat positive behavior.”
Along with the solid economy, consignors said that the changes in the Thoroughbred industry have evolved to create a stable marketplace.
“I think things are really optimistic, with a Triple Crown winner, and the market’s been very solid in recent years for quality, so I would say within the industry, things are very positive,” said Andrew Cary of consignor Select Sales. “There’s a lot of demand for good horses, which is all we can really ask for. Foal crops have come down in size, so it’s kind of helped keep numbers in check and helped keep averages up. I think it’s going to be a very strong year. There’s always a lot of noise and uncertainty, but in general, I think people seem very positive.”
In 2017, Keeneland tweaked the structure of the September sale’s first two books, cutting Book 1 down from three days to one super-select session and expanding Book 2 from two days to three. Under the new format, the number of horses cataloged prior to the auction’s traditional dark day practically doubled to 1,202 from 607. Buyers responded with brisk trade that carried through to the middle and lower markets, closing with 2,555 yearlings sold during the 12-day sale for total gross revenues of $307,845,400 – a 13 percent increase in gross from 2016. It was the first time the auction’s gross exceeded $300 million since 2008, when the effects of the recession were felt later in the sale. The cumulative average sale price in 2017 closed at an all-time high of $120,487, showing a 23 percent gain over the 2016 figure of $97,740. Also reaching a record high was the median, which finished at $57,000, a 43 percent improvement over $40,000 in 2016. The cumulative buyback rate finished at a slightlyimproved 25 percent compared with 27 percent the prior year.
Despite the strong results, Keeneland executives received feedback from buyers that the format of Books 1 and 2 left them with too many horses to inspect, and potentially vet, in a condensed timeframe. In response to that, Keeneland has expanded this year’s Book 1 portion to four sessions, with 989 horses cataloged in that span. After the dark day, the auction will continue with two
Book 2 sessions and Books 3-6 through Sept. 23, for a total of 13 sessions, one more than last year. A total of 4,538 yearlings are cataloged.
“We heard a lot from buyers that there were so many horses to have to get to up front,” Elliston said. “It was almost too much for them to get around and give proper due diligence to those horses. We needed to cut back a little bit . . . . So we addressed one of the concerns that buyers were asking, which was, let us do a more thorough job of evaluating all these great horses . . . . When you’re spending the kind of money that it takes up front at the September yearling sale, you want to feel confident that you’ve been over every hair on that horse’s back.
“Second, they said, ‘You don’t necessarily have to put every perfect horse right up front. You go so deep with the depth of this sale,’ ” Elliston continued. “They always tell us, ‘We’ll find the good horses, don’t be so worried about putting 200 horses right up front on the first day. Just give us the time, give us the resources to see them.’ Those were the things we listened to and heard.”
When Keeneland unveiled its changes to the September sale, it also announced that it would revive its April sale in 2019 as an auction of 2-year-olds in training and horses of racing age. Dates for the sale and under-tack preview show will be announced at a later date. Keeneland conducted its April sale of 2-year-olds in training from 1993-2014, after which the auction went on hiatus.
The revival of the sale, with a breeze show conducted on a dirt surface, could spark additional yearling-market interest from the pinhook community.
“There’s a segment of people that come to the September marketplace looking for an opportunistic pinhook, we know that,” Elliston said. “That’s why we wanted to get that announcement out there ahead of September, because it will provide an opportunity . . . . That’s one of the reasons why I think folks are excited to look at September 2018 for a horse that can breeze on one of the best racing surfaces in the world in 2019.”
This year’s Keeneland September catalog includes 97 yearlings by perennial leading sire Tapit, a commercial juggernaut who has consistently been among the leaders by average at Keeneland; 54 by Medaglia d’Oro, who had three sevenfigure yearlings sold on one night to lead the Fasig-Tipton Saratoga selected yearling sale; and 34 by War Front, who is commercially popular internationally.
Eighty-one yearlings from the first crop of Triple Crown winner American Pharoah are cataloged. Averaging $626,338 from his first crop, he leads an exciting class of first-year yearling sires also including champion Honor Code, Belmont Stakes winners Tonalist and Palace Malice, Breeders’ Cup Classic winner Bayern, Breeders’ Cup Dirt Mile winner Liam’s Map, Breeders’ Cup Mile winner Karakontie, two-time Breeders’ Cup winner Secret Circle, and Grade 1 winners Carpe Diem, Competitive Edge, Constitution, Danza, Daredevil, Jack Milton, Lea, Mr Speaker, Palace, and Wicked Strong.
“Perhaps not in recent memory have we had so many exciting freshman yearling sires,” Elliston said.
Recent Keeneland September graduates include both this year’s Kentucky Derby winner Justify and Kentucky Oaks winner Monomoy Girl, with Justify, of course, going on to sweep the Triple Crown to conclude his unbeaten career. Half-siblings to both classic performers are cataloged in this year’s sale. Justify famously raced for a large and varied partnership – a trend that is gaining steam in highend racing. The expansion of partnerships could be one factor in the market, as existing partnerships have additional demand for horses.
“These partnerships are creating opportunities for more and more people to get involved at a reasonable level, and when they win, they can’t get enough of it,” Elliston said. “So that means more demand for those horses. If you’ve got more partnerships, or you’ve got more partners looking to buy in, they’ve got to have more stock. We’re hearing people calling and asking for greater credit levels. We’re hearing folks who may have been buying $750,000 to $800,000 in total – literally, I just had this call two nights ago – looking to buy upwards of $2.5 million in stock. It isn’t always new people – it’s existing institutions having greater demand, looking to up their game in terms of more stock, and go up the ladder in terms of price points.”
Medaglia d’Oro’s highly anticipated offerings at Keeneland September include a colt who is a half-brother to fourtime Eclipse Award champion Beholder, Breeders’ Cup Juvenile Turf and U.A.E. Derby winner Mendelssohn, and Grade 1 winner and successful sire Into Mischief. Mendelssohn topped the 2016 Keeneland September sale at $3 million for breeder Clarkland Farm, whose Fred Mitchell said he expects a strong top end in a polarized market.
“The top end of things, they’ll pay a bundle for them, and then you’re life and death to make bills on the rest of them,” Mitchell said. “That’s how it has been for the last several years. Everybody wants the top end. [Pinhookers] will be buying because most of them had a decent sale this year. I think that ought to help us out some. Some of them are starting to play different games – they want the high end, too, so they can sell at the high end and have a million dollar-plus 2-year-old. If they can buy one for four or five hundred thousand and get a million, they made a nice profit.”