By Kevin Blake
In a game as fashion-focused and fickle as the bloodstock business, there is always great emphasis on what is new and exciting. This is seen to no greater extent than in the phenomenon that is the markets for progeny of first-season sires. There is always a great amount of financial and non-financial speculation as to which sires will make it and which won’t, so with the first runners of the latest bunch of new sires only a few months away from the racecourse, now is perhaps a good time to examine the pick of the new sires based in Great Britain and Ireland.
One thing that must be said is that it is a competitive year for sires with their first runners in 2016. There are no fewer than 13 stallions based in Great Britain and Ireland that have 75 or more 2-year-olds to represent them compared to just eight such stallions in 2015. What is also interesting is that all bar one of these stallions fall within the commercial zone of £20,000 or less. Frankel is the outlier among them and given that his fortunes will only be relevant to the highest of high-end breeders, he won’t be discussed in any detail on this occasion.
The method used to assess the prospects of the first runners of various stallions is an interesting subject. As always in the bloodstock world, there will be no shortage of subjective opinion based on what observers have seen with their own eyes on the gallops and at the sales, but this piece will seek to make a statistics-based assessment. While statistics based on yearling sales results are far from cast iron given the potential for them to be manipulated by stallion owners supporting progeny of their own sires, there is always plenty of interesting information to be extracted from the results.
One method that is a useful starting point is to assess the average, and more significantly, the median price, achieved by a sire’s progeny at the yearling sales as a multiple of their nomination fee. This can give an idea of how they performed in the context of the expectation implied by their nomination fee. However, that methodology undoubtedly favours sires with lower nomination fees, so it is arguably fairer to all to include a set figure to account for costs up to the point of sale as a yearling.
What this figure should be is a subject that could be debated all night, as there is obviously a great variety in costs based on individual circumstances ranging from the breeder that keeps the horse on their own land at minimum expense right up to the owner that boards his horses from birth at high-profile farms at much greater expense. The figure I have decided to use to best reflect an industry-wide average is 6,000gns. Adding this amount into the equation on top of the nomination fee certainly levels up the playing field and indeed swings the statistical balance back in favour of sires that stood at higher fees.
Mind, it is worth considering that while this methodology may be fairer in strict terms, it should be noted that the progeny of the higher-price stallions can be presumed to have an in-built advantage that is very hard to account for here in that the quality and value of the mares they cover will have been higher than those than were covered by the stallions that stood for lower fees, yet the fixed costs that they incur remain the same. It is also worth noting that when I converted the 2013 nomination fees of Irish-based stallions from Euro to Guineas for ease of comparison to the sales results which have all been converted to Guineas, I used the average exchange rate from 2013 (€1.18 to £1) to best reflect the cost to the breeder at the time of transaction. With the Euro having weakened significantly against Sterling since then (2015 average €1.38 to £1), Irish-based stallions on this list are disadvantaged by their stud fee being approximately 17% or so higher than it would be at current exchange rates. All told, statistical analysis of this nature will never be fully reflective of the situation, but it can certainly help to cut through the bluster and give a good indication of how the market really received the first yearlings of these new sires.
Click the table below to enlarge:
So, what do the numbers say?
At the lower end of the nomination fee scale, the one that stands out is Casamento. Prior to adding in the 6,000gns fixed costs, his average yearling price was 6.84 times his covering fee and his yearling median price was 4.28 times his covering fee, both of which clearly led the way amongst the 19 sires listed above. This is a quite remarkable performance considering the in-built disadvantage he faced in this analysis given the aforementioned weakening of the Euro against Sterling since he covered his first mares in Ireland. Once the fixed costs are added into the equation, as can be seen in the table, he still holds his own very well against his more expensive rivals.
Casamento’s numbers are particularly impressive as he has the second-highest quantity of progeny on the above list of sires, with this comparatively large sample making the conclusions more reliable. As well as that, while some might presume that his numbers might have been boosted by his progeny being supported at the sales by his owner, Darley, it is a telling fact that he achieved what he did with only two yearlings being bought by John Ferguson, one for 200,000gns and one for €40,000. Given that he has the sheer weight of numbers of representatives on his side as well as his progeny having been very well received at the yearling sales, Casamento certainly looks to have the best claims of those at the lower end of the nomination fee scale in the race for the title of champion first-season sire.
In the middle section of the commercial market, the one that catches the eye is Bated Breath. From a solid sample of yearlings that went through the sales ring, his numbers read very well. Just as significantly given that he represents the powerful owner/breeders Juddmonte, it is worth noting that they have retained 19 of his 2-year-olds. These include a half-sister to Kingman that will be trained by John Gosden, a half-brother to Twice Over, a half-sister to Quiff, a daughter of Quiff, a half-brother to Main Aim and a half-sister to Reefscape. He has the profile, the weight of numbers and the quality of mare behind him to give him every chance to make a serious impact with his first runners.
In terms of those at the higher end of the nomination scale on this list, two sires with contrasting profiles performed particularly well. The first of them is at the speed-orientated end of the scale and is another Darley representative, Sepoy. He has a really interesting profile being an Australian import, which is an angle that Darley have really backed following the success of Exceed And Excel, and the market has really responded well to his progeny. His progeny come out on top in terms of both their average and median yearling sale price relative to his nomination fee plus costs, which signifies strong support for his progeny at all levels of the market. In terms of the in-house support he got at the sales, John Ferguson only signed for four of Sepoy’s progeny, paying 200,000gns, 160,000gns, 110,000gns and 55,000gns. Interestingly, a daughter of his that is a half-sister to Sole Power was bought back for no less than 550,000gns at Tattersalls October Book 1, thus isn’t included in his already impressive statistics.
While Sepoy doesn’t quite have the weight of numbers of 2-year-olds on the ground to match his rivals for the title of champion first-season sire, his sales results certainly suggest that he makes up for it with the quality of his progeny and he is one to watch very closely.
While much of the mainstream focus will be on Frankel in 2016, the upper-end sire of a more middle-distance profile that comes out very well in the above analysis is another son of the great Galileo and indeed a former racecourse rival of Frankel’s in the shape of Nathaniel.
Nathaniel was very well supported in his first season, as is reflected in his live foal numbers, and his progeny that were sent to the sales did very well by any measure. Four of his progeny realised 500,000gns or more at auction, with the buyers being MV Magnier, Juddmonte Farms, Al Shaqab Racing and Dermot Farrington. Given his profile, it is no surprise that he was well supported by owner/breeders in his first season and the 50 or so of his 2-year-olds that have been retained by his breeders will represent the likes of Juddmonte, Godolphin, Cheveley Park Stud, Normandie Stud and George Strawbridge. One can be certain that there will be plenty of quality among that group.
Of course, unlike some of his rivals with speedier profiles, there won’t be quite as much pressure on Nathaniel’s progeny to deliver in 2016. They will be expected to be better as 3-year-olds and while no sire can get away with a very quiet first season of runners, full judgement won’t be passed on him until the conclusion of the 2017 campaign.
On a more general point, when dealing with sires that are about to have their first runners, it would be remiss not to address the question of whether a breeder should consider sending a mare to such a sire this season and if so, which ones make the most appeal.
The question itself is a contentious one, as using a sire in its fourth season is arguably one of the riskiest moves a breeder can make. The reality of the stallion game is that the vast majority of sires prove to be commercial failures and an awful lot of them are written off if their first batch of 2-year-olds do not impress, so using such a sire as their first runners are about to hit the track really is a sink-or-swim proposition, with many such investments meeting with a watery end.
On the flip side of the argument, in most cases stallion owners are very open to negotiating the nomination fees of stallions at such a tenuous stage of their careers in an effort to stimulate business by reducing their client’s exposure. That said, there have been recent cases of stallion owners taking a bullish stance with their fourth-season stallions in light of the reception their progeny received at the yearling sales. A recent example was Coolmore’s decision to raise Zoffany’s nomination fee from €7,500 to €12,500 last year. That decision raised many eyebrows at the time, but proved to be justified in no uncertain terms by the outstanding performance of his first runners and subsequent rise to a fee of €45,000 for 2016.
The one fourth-season sire in the table that has had his fee raised for 2016 is the aforementioned Casamento, whose switch from Kildangan Stud to Dalham Hall has seen his fee go from €5,000 to £5,000. Given the high-risk nature of using a fourth-season sire, siding with one at the lower end of the nomination ladder is perhaps a sensible course of action and Casamento’s numerical strength and excellent sales results make him an appealing prospect.
Another factor that makes an appealing fourth-season sire gamble is that, given anyone that uses such a sire in 2016 will be selling the resulting progeny in 2017 at the earliest, it is best to avoid a sire that has thrown mostly fast-and-early types that are going to be very quickly made or broken based on the exploits of their first runners as two-year-olds which wouldn’t be guaranteed to train on as three-year-olds. With Casamento being an imposing physical specimen himself and seeming to have passed that on to many of his progeny, they will be widely expected to train on and even improve as 3-year-olds.
If you’re feeling lucky, Casamento might be the right one to gamble on.