APEX

APEX RATINGS: THEORY AND APPLICATION 2007
by Bill Oppenheim

As I was saying this time last year, in one form or another, I’ve been in the business of stallion analysis for well over 25 years. ‘Way back in 1985, Spend A Buck won a $5-million bonus put up by the later-disgraced financier Bob Brennan when he won the Kentucky Derby; one of the side effects was that it catapulted his second-crop sire, Buckaroo, to nearly the highest cumulative-average earnings index of all time.

The APEX (Annual Progeny Earnings index) method of rating stallions was born at that time. It uses many of the same basic principles as the average-earnings index, but rates a stallion’s consistency at siring high-level performers, so that one super-earner doesn’t unrealistically skew a sire’s average-earnings index into the realm of the unbelievable.

Because of the way it was designed – trial and error played a big part, believe me – it also turns out that a sire has 17 different APEX ratings, not just one. It’s not so complicated, though. Here’s how it works:

Class Bands:

At the time, we had the idea that a horse who earned $75,000 or more in a season in North America represented a good ‘win’ for its owners. We tested this idea, and found that something like 1.94% of runners made $75,000 or more in the year we tested. Sounded like 2%. We went on to discover that $75,000 - $50,000 - $30,000 roughly corresponded to: the top 2% of earners/runners in North America; the next 2%; and the next 4%. Moreover, at that time, having a horse in training at the top tracks could comfortably be achieved for $30,000 annually. Voila: we felt we had identified the top 8% of earners, corresponding to money-makers for their owners.

So, we called the top 2% of earners ‘A Runners’, the next 2% ‘B Runners’, the next 4% ‘C Runners’, and the top 8% combined ‘ABC Runners’. Of course, earnings (and costs) have gone up in the ensuing twenty years. In 2006, in North America (see accompanying Table), ‘A Runners’ had to earn $106,919; B Runners - $75,770; and C Runners - $50,800. Interestingly, the North America ‘A Runner’ threshold reached $111,571 in 2000, peaked at $113,050 in 2001 and $113,860 in 2002, and has hovered in the $105,000-$107,000 range each year since. We can also see, from the accompanying table of ‘APEX Earnings Thresholds’ that the 2% cutoff point for A Runners has declined by 4% in North America since 2000, but has increased by a third in Great Britain/Ireland, and by over two-thirds in France. By contrast, it’s declined by 18% in Japan. That means purse money has declined in Japan; is static in North America; and has increased significantly in Europe.

Ratings by Continent:

One of the basic assumptions that underpins APEX theory is that, at least in the world’s big-league racing countries, the principle is transferable: a horse who is among the top 2% of earners in one country or jurisdiction is as good as a top 2% earner in another of these countries. If so – and we do think it is so – it gives us a method of truly rating sires across continents. We rate sires in three ‘regions’, therefore, as well as overall, for all three regions. These are: North America (U.S. and Canada); Europe (for these purposes, Britain/Ireland – which count their earnings combined; France; and Germany); and Japan.

In this era where Europe and America are still largely divided (mostly turf and mostly dirt, though Polytrack’s ‘durf’ could possibly change all that), it’s very relevant to be able to see the difference. Storm Cat, Danzig, and A.P. Indy have been the world top three (using the headline ‘A Runner Index’ measurement) every year for the last nine years. However, looking at them by region reveals that A.P. Indy is tops in North America, but has a very indifferent record in Europe and Japan. It is true that 88% (958 of 1087) of A.P. Indy’s year-starters (in the seven countries covered) since 2000 have been in North America, with only about 6% each in Europe (62) and Japan (67). Nonetheless, he has a 5.48 A Runner Index in North America, but is only 1.61 in Europe (2-for-62, GIII winners Admiral’s Cruise and Mingun). At least up till now – and we know quite a few top outfits have tried them in Europe – A.P. Indy is a markedly better sire in North America. ‘The market’ knows it, ‘anecdotally’; these figures confirm it.

By contrast, Kingmambo is an example of s sire who has been consistently better in Europe. His runners have been much more evenly divided: 458 in North America (44%), 407 in Europe (39%), and 173 (17%) in Japan. His North American A Runner Index is 1.97, whereas he is 4.18 in Europe, and 3.18 in Japan. If we speculate that he will have fewer runners in America now, and more in Europe, his 3.03 overall A Runner Index could well rise.

In total, therefore, we have 13 different ‘class’ ratings, divided by continent: A, B, and C Runner indices for North America, Europe, Japan, and All; plus an overall ABC Index.

Age Ratings

The other four indices rate sires’ progeny performance (in this case, ABC Runners) at four different ages: two-year-olds; three-year-olds; four-year-olds; and five-year-olds and up. Though we may all have an idea about how a particular sire, or sire line, does for a particular age range, I know of no other method which actually quantifies it. The accompanying table shows some examples of sires whose runners, statistically, do better (so far, at least) either younger or older. Dixie Union, Fusaichi Pegasus, Green Tune, Malibu Moon, and the French sire Zieten are examples of sires whose stock are better younger; Alphabet Soup, Arch, Dynaformer, and (perhaps surprisingly) Giant’s Causeway have sired stock which have improved as they got older.

Rules Of The Road

There are three other points I should make about the ratings. First, they are compiled on a ‘rolling’ seven-year basis; each year the eighth year back drops off, to make room for the last year added on (so, at the end of 2006, 1999 dropped off and 2006 was added on). Originally this was because we compiled the information manually, but we decided we liked the fact that it did limit the snapshot you were getting of a sire to recent times. When we first did it, we learned that once-great sires (in those days, Tom Rolfe and Raise A Native) were no longer the powerhouse sires they once were – for whatever reason.

Second, sires must have ten or more three-year-olds of the last year covered, in order to be rated. They also must have had two crops of racing age, and twenty or more year-starters; otherwise the evidence is just too flimsy to go on. Finally, our best guess is that, in class terms, ‘A Runners’ are probably about parallel to Listed class stakes winners and above. The upper reaches of the commercial market – the very highest stud fees, for example – probably correlate to a higher class than A Runners, some measurement involving GI/GII winners.

That said, it’s striking what a high correlation there has been over the years between the highest-rated APEX sires and the universally, if informally agreed, world’s top sires. Since 1998 (the year he had his first four-year-olds), A.P. Indy, Storm Cat, and Danzig have been the only sires in the top three, and they’ve been the top three every year. A.P. Indy has led the list four times (including in 2006), Storm Cat three times, and Danzig twice. And APEX ratings have been very effective in discovering ‘the next big thing’ a year or two before the market reflects it. This happened all the way back to the times of Private Account, Pleasant Colony, Storm Cat himself and, more recently, Pivotal and Distorted Humor. We definitely identified Distorted Humor as the best young sire in the Northern Hemisphere before the end of 2005; in 2006, he led all North American sires, with 20 stakes winners and 10 Graded stakes winners