Posts Tagged ‘leprechaun racing’

By Ray Paulick
The good news at the Ocala Breeders’ Sales company’s February select sale of 2-year-olds in training is that Thoroughbred racing continues to hold a fascination with people who have worked hard, enjoyed a certain measure of success, and want to live out a longtime dream to have their own racing stable.

That was the case with Chuck and Maribeth Sandford, who stepped up in a big way with their first auction purchase, a $475,000 colt by Tiznow who topped the one-day OBS sale in Ocala on Tuesday. The Sandfords come from Marengo, Ill., a small farming community in the northern Illinois cornbelt; they built a business from scratch that has been highly successful (click here to learn about their business), and in the last year have made the transition from horse racing fans to owners.

That’s welcome news for anyone in the Thoroughbred trade, especially at a time when many existing owners are cutting back on their stables. There has always been turnover in the ranks of owners, or among buyers at public auction, but for the industry’s future health it has to continue to have a magnetic appeal that attracts individuals like Chuck and Maribeth Sandford who have a dream.

How much turnover in buyers was there at this year’s one-day sale? In 2009, there were 19 individual buyers who spent $150,000 or more at the OBS February auction. Of those 19, only two spent at that level in 2010, and both made considerable cutbacks—West Point Thoroughbreds, through agent Buzz Chace going from six purchases for $1,260,000 in 2009 to three for $340,000 in 2010; and Dogwood Stables, going from five for $545,000 in 2009 to five for $355,000 in 2010.

Last year’s second-leading buyer behind West Point was Westrock Stable, which spent $595,000 for four horses. Westrock was not listed as a buyer this year. A number of other buyers who bought at least one horse in 2009 were not among 2010 buyers, including Coolmore associate Demi O’Byrne, Sheikh Mohammed’s chief bloodstock adviser John Ferguson, the Sanan family’s Padua Stables, and trainers Ken McPeek and Gary Contessa.

Fortunately, in the absence of so many 2009 buyers, there were purchases totaling $150,000 or more from 11 entities in 2010  that were not among the leading buyers last year, including Amy Tarrant’s Hardacre Farm, the sale’s leading buyer with two purchases for $675,000; the Sandfords, second leading buyer with their one purchase; California-based agent Hubert Guy, third-leading buyers with four purchases for $465,000; Let’s Go Stable, fourth-leading buyer with one purchase for $400,000; and the Steinbrenner family’s Kinsman Farm, seventh-leading buyer with two purchases for $300,000.

A boutique sale with only 160 horses catalogued cannot be used as a reliable barometer for the health of the Thoroughbred marketplace. But the results of Tuesday’s sale followed the forecast of Leprechaun Racing’s Mike Mulligan, a major pinhooker who also serves as president of the National Association of Two-Year-Old Consignors. Mulligan told the Paulick Report last week that buyers in past years who might spend $60,000 to $80,000 apiece for eight or nine horses at a 2-year-old sale are more likely now to cut back on the number purchased but focus more on higher quality, thus spending more per horse. That’s why this year’s sale saw a much steeper decline in the median price, dropping 25.6% from $90,000 to $66,000, than in the average price, which fell by 8.2%, from $106,115 to $97,182 (click here for the full results). And with more people focusing on the high-end horses and creating more competition at that level, there are going to be shoppers who were turned away without getting what they wanted. That may bode well for consignors who have the goods in upcoming auctions.

Copyright © 2010, The Paulick Report

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By Ray Paulick
No market segment will go unscathed when an industry has the kind of downturn the Thoroughbred bloodstock business experienced over the last 18 months.  The 2009 yearling market took a $150-million hit in gross revenue, falling from $438 million in 2008 to $280 million last year, a 36% decline and the lowest since 1996. A yearling’s average price of $44,900 was the lowest since 2002.

Similarly, total revenue generated in 2009 sales of 2-year-olds in training–$118 million—fell by 33% to its lowest point since 1996. The 2009 average of $48,972 was the lowest since 2003. The good news is that the median, middle-market number remained steady at $20,000. The number of 2-year-olds sold in 2009, 2,412, along with the 3,363 offered was the lowest in those two categories in more than 20 years.

Mike Mulligan, the president of the National Association of Two-Year-Old Consignors  (NATC) and operator with wife Britt of Leprechaun Racing in Ocala, Fla., said sellers of 2-year-olds have made adjustments coming into 2010. He also believes, not surprisingly, that the 2-year-old market should be the place Thoroughbred owners turn to when they are looking for horses with the potential to win at the highest level and cites a number of statistics supporting that contention (click here to see the NATC’s scorecard of stakes winners).

For Mulligan, 2009 was a difficult year personally, and not just because of the downturn in the bloodstock market. Last March, shortly after selling a $275,000 yearling purchase for $1.1 million at the Fasig-Tipton Calder sale, Mulligan blacked out and fell, suffering a serious head injury. He required four surgeries during the year, the most recent in December. “I was injured pretty badly and it was very distractive and scary,” Mulligan said. “But I was able to travel to all the yearling sales and we are in business as usual. My wits are about me, and I want everyone to know that everything is OK. We got so much support from people in the industry, from my partnership base and friends, and that was very gratifying.”

Mulligan spoke with the Paulick Report about the upcoming 2-year-old sale season that begins next week with the OBS selected sale of 2-year-olds on Feb. 16. Other major 2-year-old sales include Fasig-Tipton’s Calder sale March 2; the OBS March sale March 16-17; Barretts selected sale March 22; Keeneland’s sale April 5; and the OBS April sale April 19-22.

What are the most critical factors that will drive the 2010 market for 2-year-olds?
I think it’s the success, particularly the success of the 2009 graduates at every level of the game. I’ve been doing the advertising for the NATC for nearly a decade now, and the statistics are very favorable for 2-year-olds, versus other ways to acquire a horse. If anyone new to the game was using an analyst to evaluate these statistics, I feel confident he would point them to the 2-year-old sales.
 
Obviously there will be fewer horses in the 2-year-old market because of the global economy and 2-year-old consignors not having a spectacular year in 2009, which means their spending at yearling sales was reduced. I know I spent less last year, looking more for that horse that fell through the cracks at a yearling sale.

What is the outlook for this sale season?
I feel cautiously optimistic. We have already seen the hit from the economy and the stock market. There will still be a vast number of buyers that go to 2-year-old sales and trainers that like to buy horses are still going to be there.

How has the banking crisis and tightening of credit affected pinhooking?
It certainly has affected things. Credit tightening has cut people back. It would have to hurt some people and it always has a trickle down effect. What happened in the Thoroughbred market is like what happened in the real estate market years ago. I had a friend who had been flipping houses and doing well, then all of a sudden that market collapsed. The banking crisis caused mares to be sold at a bad time, horses were sold as weanlings instead of as yearlings, yearlings were sold instead of going to the track.

How has the market changed over time?
Years ago there was more of a middle market, where one guy might buy 10 horses for $80,000 or $90,000 each. Today, that same guy might get two or three horses for $250,000 each. When I first raced horses, winning a maiden race, even on a weekday, that was the greatest feeling ever. But now there is more of a Kentucky Derby mentality, where people are looking for that special horse, that big horse. But there are plenty of horses that don’t sell or bring small money that end up being really nice horses. It’s something I’ve seen while reviewing graded stakes winners over the last 10 years, the number of nice horses that come out of these 2-year-olds sales for very little money and are ready to run.

Pinhooking partnerships have been an attractive investment for quite a few people. Are we getting to the point where we have too many people working on the assembly line, either as breeders or pinhooking investors, and not enough people to buy the end product?
I think that’s very true. We all know racing has some challenges to overcome over the next couple of years to deepen the fan base. Many big racing enthusiasts end up getting into other aspects of the industry, including horse ownership. We need more customers that want to buy racehorses. Racing is supposed to be a sport. I’ve never told anybody, ‘Lets go race these horses and we’ll make a bunch of money.’ Look at yachting. How much do some people spend on yachts to win a boat race. It’s more of a sport than a financial endeavor. Racing needs to be looked upon from that standpoint, and we haven’t done a good job promoting that aspect of participation.

Florida’s foal crop has fallen sharply the last two years and a number of stallions have left the state. Why has that happened, and how will it affect 2-year-old sales?
It’s going to have an impact on the market, but I really feel a lot of the mares not bred over the last couple of years were not elite mares putting out attractive horses in the yearling market or that ended up at 2-year-old sales. I think the middle to high end mares that can contribute, those mares are still being bred.

What other factors have led to the decline in the number of 2-year-olds in training being offered?
Yearling buyers have learned from 2-year-old consignors about what horses will make the grade. I feel there is more and more competition on the better, more athletic horses at yearling sales–more end users are buying the horses that pinhookers might have been on before. You are trying to buy ‘X’ number of horses, and the competition is there from fellow pinhookers and end users.  Ten or 12 years ago you could buy a good physical horse by an off sire, but now it’s not so easy. If they are an athlete they are going to be pursued that much more today at the yearling sales.

Are buyers getting tougher in their vetting of horses?
If I’m given a choice between a yearling that vets perfectly, scopes perfectly and has what I think is limited ability versus a horse with a couple of minor problems but has what could be huge ability, I’ll take the horse with the minor problems. When buyers see a special horse they are inclined to overlook minor issues. None of us can afford to overlook major physical problems.

What difference has the synthetic track had on the OBS sales?
I think it has created a level playing field to some extent. Horses are not able separate themselves as much from a time standpoint, and it’s a much safer track. Turnbacks (horses returned by buyers after the sale because of bone issues) have significantly decreased since we put in the synthetic track. They come out of their breezes more sound.

There have been two other changes in the last couple of years that in my mind have helped us continue to produce good products. First, we’ve gone to one breeze show. The second breeze show on rare occasions may have helped a horse that was sick or not able to perform during the first breeze. But realistically there weren’t that many horses that moved up on a second breeze. Most of the buyers had made their minds up by the time the first breeze show was over. The NATC and the sales companies agreed it would be best to go to one breeze.

Second, we restricted whip use, not allowing a horse to be whipped once they start breezing and not allowing the horse to be whipped past the wire in the gallop out. A buyer gets a truer picture, and the results of these two things were outstanding this year, in terms of horses that went from 2-year-old sales to be champions, Grade 1 winners and performing well in the Breeders’ Cup.

Why was the National Association of Two-Year-Old Consignors formed?
When we first created it in 2000, there was some drug testing issues implemented by sale companies, and a group of consignors said we needed a voice so that the guidelines and testing were appropriate and best for the horses. We collectively grouped together to have a voice with the sale companies, we work collectively in advertising 2-year-old sales in the trade publications that say this is who we are and talking about the success of 2-year-old sale graduates. Over the years we have been encouraged consignors to make horses eligible for NATC Futurities..

Has it succeeded in its mission?
We’ve done well. We have educated buyers who have come to the sale just because of our advertising, and we’ve done well with the Futurity, something that’s more for the middle horse going to a regional market in the East Coast.

We are trying to do what’s best for the horse and to sell a good product. If you sell a lot of expensive horses that haven’t produced, you’re going to lose your buyer base. That hasn’t been the case. The results on the racetrack speak for themselves.

Copyright © 2010, The Paulick Report

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By Ray Paulick
All the economic indicators took a predictable dip at Fasig-Tipton’s sale of 2-year-olds in training at Calder on Tuesday, with gross receipts falling 25.5% from 2008 and the average and median prices dropping by 31.5% and 34.8%, respectively. The declines are in line with falling market prices at other Thoroughbred auctions in North America since the financial crisis hit last September, midway through the bellwether Keeneland September yearling sale.

Fasig-Tipton reported selling 111 horses for $26,151,000, an average price of $235,595 and median of $150,000, compared with 2008 figures of 102 sold for $35,100,000, an average of $344,119 and median of $230,000. Buy-backs were down from 40.4% in 2008 to 35.4% this year, when 61 of the 172 through the ring failed to reach their reserve price. Another 91 juveniles were listed on the results sheet as "out" or withdrawn at this year’s sale.

There was broad-based participation from a cross-section of American and international buyers, including a contingent from Japan and Europe. Absent from the list of buyers, however,  was Demi O’Byrne, who represents the Coolmore operation of John Magnier and has annually been one of the leading buyers at American yearling and 2-year-old auctions.

John Ferguson, agent for Dubai’s Sheikh Mohammed, bought the only three seven-figure juveniles in the sale. He purchased a Medaglia d’Oro colt (Hip 94) consigned by Ciaran Dunne’s Wavertree Stables for $1.6 million after earlier bidding $1.1 million for an Unbridled’s Song colt (Hip 75) from the consignment of Leprechaun Racing, agent. Ferguson also bid $1 million for another son of Unbridled’s Song (Hip 271), from the consingment of Scanlon Training Center, agent. late 

The sale was operated for the first time under the new ownership of the Dubai-based Synergy Investments, which purchased Fasig-Tipton last May. Ferguson negotiated the deal on behalf of Synergy, whose principal is an associate of Sheikh Mohammed.

Clilck here for results from Fasig-Tipton.

Copyright © 2009, The Paulick Report

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