By Alan Carasso
The 2017 Keeneland September Yearling Sale concluded its 12-day run in Lexington early Saturday afternoon, and the sale could more or less be summarized in two words–mission accomplished.
New September records were set for average ($120,487, previous record $112,427 in 2006) and median ($57,000, previous record $50,000 three times), and–arguably–industry morale at the close of business. Gross receipts, which exceeded last year's total during session seven, totaled $307.8 million, surpassing $300 million for the first time since 2008.
“The Thoroughbred industry is in a very good place, I think,” Geoffrey Russell, Keeneland's director of sales operations said. “Going into it, we were optimistic. We felt good about the quality of the horses our consignors brought to us and during the inspection process, we knew had a very good group of horses that were going to come here. We thought that the new format that we instituted would help and the format and the whole sale has exceeded our expectations.”
Earlier this summer, officials at Keeneland announced a tweak to the format of the 2017 sale that would create an elite, 'July-esque' Book 1 conducted during an afternoon/early-evening sesssion, followed by three days of selling in Book 2, with another 1000 well-pedigreed and -conformed youngsters put before a diverse buying public. Format changes are not a new phenomenon, as Keeneland is constantly taking the pulse of its customers, buyers and sellers alike, to determine in concert what the best way forward is.
“Last year we had 600 horses before the break, and buyers and consignors challenged us to have more horses before the break [this year],” Russell explained. “The design process of the format was that we wanted to engage the buyers early and that's why we had the Monday night session–to get these people going and to get the sale off on a strong note and hope then that it would continue on through all the books, which it has certainly done since then.
“We wanted to create excitement and enthusiasm early,” he continued. “From the time people came onto the grounds to look at horses up to [the end of the sale], there was a great excitement and buzz that we haven't seen for a while in the Thoroughbred industry. It's wonderful to see it.”
As with almost any new endeavor, there were bound to be some growing pains, and some horsepeople expressed frustration with the new format.
“You have your Book 1 horses in the nice barns 1-6, and I understand that, but then your Book 2 horses may be up at the top of the hill or on the other side of the grounds and that makes it difficult for both buyers and consignors,” commented Brandywine Farm's Pam Robinson. “You're running two barns at the same time. That's not a problem, except when you're the person running both groups of horses. So, I'm running a barn in barn 6 and then I'm running a barn up in barn 38. I don't know why we couldn't have book 1 and book 2 horses for the same consignor stabled in the same barn. Being the person in charge in both barns, it's impossible to be there and represent both groups of horses at the same time.”
Mike Ryan, who finished the sale as the second most-prodigious buyer, echoed those sentiments.
“I think it was very challenging to get around to see all of the horses,” he said. “The horses for every day were in every barn from 15 to 49, so it wasn't like they were concentrated in one area. When you have horses for three days from 15-49, it's a whole lot of back and forth. Those kind of hroses, you're seeing them two and three times, there is a high concentration of quality and you're trying to get it right. And then you had to be up here at 11 a.m. to bid. Book 2 is three days, last year it was two days. They went from 800 horses to 1,050 and that stretched us and it really stretched the consignors. A lot of buyers felt it was just too much, too overwhelming to get through them all. There was no way to adapt to this because of the sheer territory you have to cover. I had seen 1200 or 1300 before the sale, so I had an advantage, a lead-up, but trust me, it was very very demanding.”
As per usual, Russell will canvass his customers' opinions, but is confident they will adapt.
“If you were an individual buyer, [the new format] definitely was a challenge, but most groups do buy in teams, so once they got their heads around it, I think it worked out well,” he said. “The comments we received back were now that they know how to do it, don't change the format next year because now we know what we're doing.”
Strength From Beginning to End…
By any metric, the 2017 September sale was a rousing success from flagfall to finish. There was a palpable buzz on the grounds in the days leading up to the beginning of the sale Sept. 11, and Book 1 did not disappoint. Donato Lanni signed for the first of the session's eight million-dollar horses, going to $1.9 million for hip 27, Taylor Made Sales Agency's son of War Front out of Iotapa (Afleet Alex), a shrewd $50,000 claim by Kosta Hronis and his team who went on to Grade I glory and now is a seven-figure producer for the colt's breeder China Horse Club International.
Along with War Front and to the surprise of no observer, Tapit also dominated Book 1, as the two imposing sires accounted for seven of the eight sales-toppers, headed by hip 69, for which Coolmore's M. V. Magnier paid a sales-topping $2.7 million. The gray filly was consigned by VanMeter-Gentry Sales, agent, and it is a family with which Coolmore is familiar. The triumvirate of Michael Tabor, Derrick Smith and Mrs. John Magnier also campaign the filly's 4-year-old brother Cupid, winner of this year's GI Gold Cup at Santa Anita and one of three top handicap horses trained by Bob Baffert heading towards the GI Breeders' Cup Classic at the beginning of November.
Between them, the two boom sires accounted for 23 of the 95 horses sold during the opening session for gross receipts of $21,835,000, or 40.3% of the Book 1 turnover of $54,175,000. Over the course of the entire sale, the progeny of Tapit and War Front fetched $27.7 million. The overall Book 1 average of $570,263 established a new mark for the September sale, besting the $564,383 recorded over two days of Book 1 selling at the 2006 September sale, topped by $11.7 million Meydan City (Kingmambo), four others that brought $5 million or higher and a mind-boggling 32 million-dollar transactions. By comparison, the final time Keeneland hosted their boutique July Sale in 2002, 87 horses were sold from a catalog of 200 (54 outs, 59 RNAs) for $42,385,000, an average of $487,184.
But it wasn't just the Tapit and War Front show at Keeneland, where the prevailing market winds described by words like 'stable' and 'rational' observed at the year's under-tack and previous yearling sales continued to blow. Four other stallions–Medaglia d'Oro (hip 82); the late Scat Daddy (hip 578); Orb (hip 844); and Quality Road (hip 804)–were also represented by seven-figure yearlings. Tapit ($950,000) and War Front ($770,000) were two of seven sires (five or more sold) whose progeny averaged better than a quarter-million dollars at the September sale.
“In North America, we've got a very good group of stallions that have emerged at the top of the industry and Tapit and War Front are at the forefront of that,” Russell said. “They perform exceptionally well at the racetrack and therefore they're good product and you have to be willing to pay top dollar if you want to buy them. But it is nice to see other horses like Quality Road have million-dollar horses as well. At the moment, the stallion ranks in North American are both strong and very deep.”
While the restructured format made session-to-session and book-to-book comparisons largely irrelevant, buyers and consignors reported unprecedented level of activity at the barns, as late at Thursday's second session of Book 5. It was a plan that all came together the right way, according to Russell.
“We wanted to start off with a bang and hope it would continue on to [book] two, to [book] three, to [book] four and five and even down into six. Consignors [Thursday] were telling me that they've never showed horses so much in book five in the barns.”
Said Taylor Made's Mark Taylor, “We even had to ask some customers to come back in 20 minutes because we didn't have a ring. I've never seen that before.”
Pam Robinson concurred.
“Our Book 4 horses–we had 171 cards on one day. That equated to over 3,000 individual shows,” she said. “We were literally busy from 8 o'clock in the morning until 5 o'clock with absolutely no break, just unreal. Even in Book 5, it was difficult to make your way through the crowd because there were so many people trying to buy horses. The economy is good and people are optimistic again. People are buying horses and that's good for us breeders that breed horses.”
“I'm glad the sale is almost over, I really am, everyone is really, really tired. A friend of mine has a FitBit and they said by tomorrow they should hit 300 miles at the sale.”
-Oracle Bloodstock's Conor Foley
Indeed, there seemed to be tremendous demand for horses in the back books. The buyback rate for Book 5 registered at a low 20.3%, though, as Russell pointed out, those horses are there to sell.
“At this end of the market, the consignors are willing to move these horses on and the [low] buyback rate reflects that,” he commented. “Towards the beginning, it's a different group of consignors and a different group of breeders and some of them are willing to race. If they don't get what they're looking for, they're happy to race. These [back-book] horses are bred to be sold, so they're sold.”
As late as Friday's opening session of Book 6, there were still six-figure transactions to be found, as hip 3667, a Gio Ponti filly from the family of Greenwood Lake (Meadowlake), hammered for $115,000. Saturday's session was topped by hip 4123, a colt by the expatriated Take Charge Indy who was bred by Dede McGehee and consigned to the sale through her Heaven Trees consignment. John Ed Anthony's Shortleaf Stable was the winning bidder at $85,000. The colt's dam, Croon (Indian Charlie), was purchased by McGehee in foal to Data Link for $40,000 at the 2014 Keeneland November sale. That produce, a colt, was hammered down to Becky Thomas for $155,000 at this sale 12 months ago. Hip 4123 is a half-brother to Laney (Shackleford), a $17,000 buyback out of the 2015 September sale who was third in this year's GIII Beaumont S. and GIII Eight Belles S.
Buyers Converged on the Bluegrass…
Keeneland has worked long and hard to attract buyers from countries and markets big and small–“from all four corners of the world” as Russell puts it–to this and all their sales, and the efforts appear to be bearing fruit at all levels of activity. Of the 21 horses that sold for $900,000 or more, the names of 13 unique purchasing entities (some including individual buyers in partnership) appeared on the sales sheets, including relatively new shooters like Kerri Radcliffe, who teamed with Three Chimneys on the Violence colt hip 489; Larry Best's OXO Equine, who signed for a pair of $1-million plus horses and four overall for $4.11 million. With Sheikh Hamdan bin Rashid al Maktoum in attendance, Shadwell was the sale's leading buyer for the fourth time in six years, while brother Sheikh Mohammed, represented by agent Anthony Stroud, occupied third position. M. V. Magnier completed the buying superfecta in fourth. Shadwell or Sheikh Mohammed's agents have topped the buyers' list at Keeneland September every year but one since 1999. Foreign buyers accounted for $80 million in purchases.
“Our buying base was phenomenal–to say the least–at all levels of the market, both domestically and internationally,” Russell reported. “We had a record number of buyers from Europe. The upper-middle market and the upper market is very, very strong right now in the Thoroughbred industry in North America. Many buyers noted how many times they got outbid on their $400-$600,000 horse, so there's just a great level of participation right now.”
As was reported by Brian DiDonato following Book 1, there was a noteworthy and welcomed shift in buying philosophy from Godolphin, who, for the first time in over a decade, patronized yearlings by Coolmore sires, including multiple final-crop yearlings by Scat Daddy and others by the likes of Uncle Mo, Lookin At Lucky and Australia (GB).
“We are very proud of the support we get each year from the Maktoum family and we are glad that they are looking wider afield for their stallions,” Russell said.” It is always great having Sheikh Hamdan here every year. He obviously enjoys coming here every September. He enjoys shopping for yearlings and to watch him on the sales grounds is great.”
Strength In the Middle As Well As the Top…
As previously noted, the median for this year's September sale ended on $57,000, far surpassing the previous record of $50,000 set on three occasions from 2013-2015.
“There was a great depth of buyer sort of from the $300,000 level and above,” said Russell. “So far, there have been 75 individual buying accounts that have spent in excess of $1 million. That's wonderful.”
Mike Ryan was at the top of the heap of middle-market buyers, spending nearly $11.5 million for 44 horses with a top price of $450,000 for hip 1530 and 17 purchases north of $300,000. Ben Glass remained active through Book 5 and was the buyer of 24 yearlings for gross receipts just shy of $5 million for owners Gary and Mary West, while Don Adam's Courtlandt Farm (10 horses, $3.475 million), Rick Porter's Fox Hill Farm (10 for $3.025 million) and John Oxley (5 for $2.5 million) did their part to hold up that segment of the market.
Though clearly possessed of the resources to shop at any level of the September market, Charlotte Weber's Live Oak Plantation was content to wait for the second day of Book 3 to jump in, ultimately purchasing four horses for $935,000, including Warrendale Sales' Warrior's Reward filly (hip 2702) that was the joint-topper during session eight on a final bid of $325,000.
Minnesota-based Bob Lothenbach signed for 9 horses for $2,905,000 (average $322,778) as he continues to upgrade his racing stock. As recently as the 2013 September sale, Lothenbach, who has horses with trainers Ian Wilkes, Chris Block and Neil Pessin, was the buyer of 17 horses for an average of just over $96,000. But it wasn't always smooth sailing over the last two weeks, said Lothenbach advisor Drew Nardiello.
“We did our homework early and got some very good individuals at very good value,” he said. “As the sale went on later, it felt like we couldn't get what we wanted. Mr. Lothenbach has had a very good year racing. One of his 2-year-olds just won the Arlington-Washington Lassie (Bet She Wins, by First Samurai) and Ian is high on another one ($250,000 2016 KEESEP grad Gotta Go, by Shanghai Bobby), who just broke her maiden at Churchill [Sept. 17]. He wants this to be a mainstay of his life, he had a great race meet up at Canterbury.”
Nardiello was another who was impressed by the performance of the market.
“I thought the market was strong,” he said. “I thought there were a lot of good horses, a lot of athletes, time will tell. To say it was crazy? No. I thought it was a very solid market for athletes. Later in the week, we tried to buy two nice colts [Wednesday and Thursday in Book 5] and they blew right on by us. But we were pretty excited about what we got.”
Pinhookers Play a Bit of a Waiting Game…
The 2-year-olds-in-training market performed well over the winter and early spring and that gave yearling-to-juvenile resellers plenty of capital to work with at the September sale. It was effectively business as usual for horseman Peter Bradley, who signed for 15 horses for $1.907 million before treating himself to a trout fishing trip in North Carolina.
“As a reseller, I honestly didn't think it was any tougher than usual,” Bradley said by phone Saturday morning. “We came out of there with horses at the right price points and we were happy with what we did. As the pinhookers get focused after the first couple of books, the nice horses begin to stand out and it becomes competitive. None of us knows if these horses will have the speed or the athleticism to sell well at the 2-year-old sales, but we think we're in a good spot.
He continued, “It was a very strong market, I would say the middle market was the best that I've seen it in two or three years and that is obviously something that is good for the industry. Breeders have the toughest job in game. If their product is good, it's a rewarding process, but if it's not good, it's a long process to find out that it isn't. I still think 30% buybacks on the high side, but for the guys that have a good cross section of mares, they are able to absorb that.”
Russell was pleased with the participation from that segment of the buying public as well.
“I made a comment on Sunday that the pinhookers made a later start than they have in years past,” he opined. “The end-users were definitely at the forefront in Books 1 and 2 and the pinhookers didn't really get going until the second half of book three and on from there. The 2-year-old market was very good this year, but I think the pinhookers realize that there is a price range that they need to be in and that they are comfortable in and they didn't stray from that.”
For his part, Bradley was also frustrated by the wear and tear caused by the new September format.
“It's a real grind anyways and to have to go on a marathon every day made it tough for the buyers,” he said. “There were two problems I observed. One, I saw total logjams at the barns because consignors were showing three days of horses and, two, I saw buyers with their tongues hanging out from running all over the place. Keeneland does a great job, but I think this was the wrong tweak.”
The More Things Change…
For the 18th time in the last 24 renewals of the Keeneland September sale and for the 12th time in the last 14 years, Taylor Made Sales Agency was the leading consignor by gross. The consignment sold 270 horses for gross turnover of $38,679,400, its best result since the agency sold nearly $49 million in horses in 2008. The Taylor Made draft contained two of the sale's million-dollar horses topped by the Tapit colt out of Miss Besilu (Medaglia d'Oro) that fetched $2.6 million from Mandy Pope's Whisper Hill Farm.
“I think the sale was significantly better than I anticipated,” the agency's Mark Taylor said. “I kind of thought two months ago that the sale was going to be better, because the stock market was doing so well and the 2-year-old sales seemed to have strength and things were going well. Then a lot curve balls got thrown at us with hurricanes and it all kind of got disrupted a little bit and it seemed like people in Florida were having a hard time getting up to the sale. So by the time the sale kicked off, I was expecting it to be neutral or possibly even down in spots, but it ended up being really good.
He continued, “Internally, we had a great sale. There were some individual disappointments along the way and horses you thought would get sold that didn't, but that's going to happen at any sale. Our gross is going to be way over where we anticipated and the good thing about it, really the most encouraging thing for me, was how much activity there was in the barn area for Book 5. I haven't seen Book 5 have that many people looking at horses and then doing the vet work on them in a long time. That was very encouraging. Last year it was painfully slow in Book 5 and we have people coming in for Book 6 and they were looking at all-shows and it's better than it normally is.”
Book 1 Bonus Takes Flight…
This year's September sale marks the beginning of Keeneland's September Sale Bonus Program, which will offer cash rewards to the owners of Book 1 graduates who go on to win Group 1/Grade I races. A Seller Bonus was extended to include rewards for any group or graded winner sold at any time during the September sale.
“Keeneland will offer approximately $2 million per year in incentives beginning with the 2017 September Sale graduates,” said Keeneland Vice President of Racing and Sales Bob Elliston. “The bonuses added interest to the excitement; gave buyers a reason to stretch and make that next bid, go that extra step to get that horse. Keeneland will be cheering on our September Sale graduates as they begin racing next year.”
What They're Saying…
“The market is obviously really strong. I would attribute that to the strength of the stock market, it's at an all-time high. Wealthy people have as much money as they've ever had. I know that the 2-year-old season went really well and probably this year's group of freshmen sires that have 2-year-olds at the track, I think they're above average as a group and I think those breeders are getting rewarded for their faith in those sires. That's gotten a push for that group and I think that's helped the average in Books 3, 4 and 5. I think another factor is how well American horses have done overseas with limited opportunities. I think that's resulted in a renewed confidence in foreign buyers that American bloodstock, is, pound-for-pound, the best bloodstock in the world. On a lot of horses, there were more than one person bidding, and that's good for the business. You have to have years like this, because inevitably, you're going to have down years, so it's important for people that do this for a living to have years like this.
I think the format that Keeneland had this year was the best I've ever seen. I think the way Keeneland had things lined up definitely helped. I didn't have a complaint about the setup. You know where the horses are going to be. It's not a surprise. Everyone in the sale is ending it with a smile on their face, especially on the selling end.”
–Conor Foley, Oracle Bloodstock, who signed for 15 horses for $1,165,000
“It's kind of like a football coach after the game when they say 'what do you think?' and they say 'I want to watch the tape.' I haven't really gotten out of the weeds and gotten down to a point where I can look down at it in its entirety and form an educated opinion. We tried to work with Keeneland. They convinced me that we needed to have a vibrant Book 1 to help set the rest of the sale up for success. They had tried several different approaches to it in recent years and they just hadn't gotten it quite right. We supported Book 1 at Keeneland's request pretty heavily. They wanted some horses we had that we were a little sketchy on and we put them in there and, by and large, they sold well. There's one horse looking back on it that I wish I'd had in Book 2 or Book 3 because he would have gotten sold and he didn't. But other than that, I thought it did have a good feel to it, there was some electricity in the air, a lot of people getting shut out and rolling into Book 2 with some confidence in the market. I think that with the other format, if you just spread those horses out over three or four days, it's the luck of the draw and you might get a lackluster group of horses going on the first day and it sort of gets things off with a thud and you there is not any momentum to really push. Again, I want to watch the tape, but my initial thought is that the sale has gone great and a part of that is getting Book 1 launched with some fireworks.”
—Taylor Made Sales's Mark Taylor on the new format