Thoroughbred breeders are on pins and needles in the days leading up to the bellwether sale that determines the state of the commercial market and the financial well-being of thousands of people engaged in the business of breeding, raising and selling racehorses.

There is always an air of uncertainty as the Keeneland September yearling sale approaches (it begins Monday), but this year the sense of anxiety seems heightened; 2008 has been a virtual perfect storm of bad news that has affected the world economy, financial markets and the racing industry in a variety of ways. Even the normal bright spots – the Triple Crown and race meetings at Keeneland, Saratoga and Del Mar – have come down with a case of the blahs.

Here’s a quick review of some of the major race meetings and big days in 2008:

- Gulfstream Park’s total handle was down 5%; on-track betting plunged 30%

- Keeneland’s spring meet saw an increase in attendance but a curious decline in wagering of 5%

- Saratoga, plagued by bad weather early in the meeting, ended up down 10% in total handle and minus 7% on-track

- Kentucky Oaks wagering was down  7%

- Kentucky Derby wagering dropped 2.5% despite having the second-largest on-track crowd ever

- Preakness handle fell 16%

- Belmont Stakes handle was the lone bright spot in the Triple Crown, increasing by 32% as a result of Big Brown’s attempt to win the Triple Crown

- National handle is down 3.7% for the first six months of 2008

- Spending at 2-year-old sales is down roughly $13 million from 2007 despite solid results at OBS auctions; the high end of the market (Fasig-Tipton and Barretts) suffered the most

- Gross receipts for North American yearling sales going into Keeneland’s September auction are down $20 million from 2007

Some of the wagering declines are due to ongoing disputes involving the Thoroughbred Horsemen’s Group (representing horse owners) and TrackNet Media (the joint venture of Churchill Downs and Magna that negotiates simulcast contracts). Those disputes have affected account wagering handle, in some cases shutting it down almost entirely.

The overall mood for racing has been in a season-long slump, due to several factors.

The most obvious is the long-overdue recognition that medication issues are responsible for increasing skepticism among both fans and industry professionals over whether the sport is being played on a level playing field. The admission by trainer Rick Dutrow that Kentucky Derby and Preakness winner Big Brown raced on anabolic steroids exposed one of racing’s dirty little secrets; namely, that too many therapeutic medications, including steroids, are permitted. Getting rid of steroids has proven to be a very painful and public process, but progress is being made.

The breakdown and subsequent euthanasia of Eight Belles immediately after she finished second in the Kentucky Derby was as high-profile a blow as the sport has had since Ruffian’s death in her 1975 match race against Foolish Pleasure. It appeared to be a case of bad luck and nothing more, but that hasn’t diminished the negative publicity the event attracted.

The Congressional hearings in June that exposed racing’s lack of a central authority and its inability to deal with drug and safety issues further diminished the sport in the public eye. At least it spurred some to action, including the Jockey Club, Thoroughbred Owners and Breeders Association and National Thoroughbred Racing Association, which all created special committees to examine issues and make industry-wide recommendations that no one may be able to enforce.

Compounding the issues that are challenging the sport is the absence of any effective industry-wide effort to attract new investors as end users for the horses produced by breeders. The ranks of breeders and sellers continue to grow as racing becomes less viable economically. A number of prominent buyers in recent years are shifting to the selling side of the ledger, leaving a void among people willing to spend substantial amounts of money on racing prospects. This reduced population of top-level buyers figures to make the high end of the yearling market susceptible, particularly if the two parties who have traditionally been the leading buyers, Sheikh Mohammed’s Darley and John Magnier’s Coolmore operation, do not bid head-to-head on the same yearlings.  And questions remain about how the Dubai purchase of the Fasig-Tipton auction house will affect Sheikh Mohammed’s spending at Keeneland.

Ultimately, Keeneland is the world’s largest yearling auction, and buyers from around the globe will show up and spend hundreds of millions of dollars before this sale is over Sept. 23 after a 15-day run. The question is how close will they come to the $385 million spent at Keeneland in 2007.