Posts Tagged ‘obs’

By Ray Paulick
With Santa Anita running extra American Graded Stakes last weekend due to the cancellations the previous week because of drainage problems with the Pro-Ride synthetic track, there were 13 AGS races run over the three-day President’s Day weekend. One stakes, the Southwest at Oaklawn, was lost on President’s Day because of bad weather and has been rescheduled for this Saturday.

A quick review of the 13 races shows there was a parade of chalk into the winner’s circles, with eight favorites winning for a 61.5% rate, nearly double the national average of roughly 33% for all races run in North America.

Four trainers doubled up on AGS victories over the Feb. 13-15 weekend: Todd Pletcher (Rule in the Sam F. Davis at Tampa Bay Downs and Munnings in the Gulfstream Park Sprint Championship at Gulfstream Park); Mike Mitchell (Kays and Jays in the Hurricane Bertie at Gulfstream Park and St. Trinians in the Santa Maria Handicap at Santa Anita); Jerry Hollendorfer (Blind Luck in the Las Virgenes and Tuscan Evening in the Buena Vista Handicap, both at Santa Anita); and Christopher Grove (Greenspring in the General George Handicap and Sweet Goodbye in the Barbara Fritchie Handicap, both at Laurel).

There have been 38 AGS races run so far this year, with 18 of the winning horses having sold at public auction (RNAs are not included). Of those 18, eight of them have sold for less than $100,000. Three of those eight sold on two different occasions for less than $100,000—Kinsale King, for $27,000 at the Keeneland September yearling sale and $67,000 at the Barretts May sale of 2-year-olds in training; Cat by the Tale, for $75,000 at the Keeneland September sale and then for $52,000 as a 3-year-old at the Keeneland January horses of all ages sale; and Jeranimo, for $50,000 at the OBS August yearling sale and $70,000 at the Barretts May sale.

At the other end of the spectrum is Munnings, the highest-priced auction horse to win an AGS race so far in 2010, having been purchased by Demi O’Byrne for $1.7 million at the Fasig-Tipton Calder February sale of 2-year-olds in training. Leprechaun Racing pinhooked him at that sale after buying the son of Speightstown for $150,000 at Fasig-Tipton’s August select yearling sale.

Keeneland’s September sale, the largest yearling sale in the world, continues to dominate as expected, with 12 of its graduates winning AGS races thus far in 2010.

Eaton Sales and Taylor Made Sales Agency, the two biggest-volume consignors, each have sold three AGS winners of 2010 (all sold at Keeneland September); Gainesway and Warrendale Sales are next on the list of consignors of 2010 AGS winners, with two each.

El Corredor and Smart Strike are the only two sires to be represented by two AGS winners thus far in 2010. El Corredor, who stands at Hill ‘n’ Dale for $15,000, has sired Santa Ysabel Stakes winners Crisp and Col. E.R. Bradley Handicap winner El Caballo. Smart Strike, who stands for $75,000 at Lane’s End, has sired San Fernando Stakes winner Papa Clem and La Canada Stakes winner Striking Dancer.

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
Keeneland’s September yearling sale is the largest auction of its kind in the world, serving as a marketplace for all levels of participants in the Thoroughbred industry, from the rich and famous who fly into Lexington in their private jets for the early select sessions to the blue-collar horsemen who pull a two-horse trailer into town behind their pickup trucks at the tail end of the marathon sale.

This year’s 14-day Keeneland September sale begins on Monday, Sept. 14 and runs through Sept. 28. Friday, Sept. 18 is a dark day. There are over 5,000 yearlings catalogued to this year’s sale.

Because it is the largest Thoroughbred yearling sale in the world, it should come as no surprise that the Keeneland September sale has more of its graduates win American Graded Stakes than any other auction. The Keeneland September sale has produced 66 AGS winners of 2009, five times as many as any other Thoroughbred auction. It accounts for 38.4% of the 172 AGS winners of 2009 that were sold at public auction. (The figures represent only those horses that sold and do not include RNAs.)

The most surprising thing to me about the Keeneland September graduates that went on to win an AGS race in 2009 is the number of horses that sold for relatively low prices. Unbridled Belle, winner of the Grade 3 Obeah Stakes at Delaware Park, was the biggest bargain, selling for $4,000 at the 2004 Keeneland September sale. Zensational, winner of three consecutive Grade 1 races and the likely favorite for the Breeders’ Cup Sprint, was a $20,000 yearling purchase. A total of 20 AGS winners of 2009 brought prices of $50,000 or less at the Keeneland September sale. At the other end of the spectrum is the $3.9 million Storm Cat colt, Mr. Sidney, who won the Grade 1 Maker’s Mark Mile at Keeneland this spring.

The 66 AGS winners that sold at Keeneland September had an average price of $254,621 and a median of $115,000.

Because it serves as a marketplace for such a wide range of yearlings in terms of the quality of their pedigrees, the percentage of Keeneland September graduates that win an AGS race is lower than that of some other Thoroughbred auctions. Since the AGS winners of 2009 sold in different years, we’ll arbitrarily use 2007 as a benchmark for calculating the percentage (the same year was applied to consignors of sale horses in last week’s American Graded Stakes Standings brought to you by Keeneland). There were 3,799 yearlings sold at the 2007 Keeneland September sale, and the 66 AGS winners that were bought at a Keeneland September auction represent 1.7% of that figure.

By comparison, Fasig-Tipton’s select sales in Kentucky in July and at Saratoga in August, which select yearlings based on pedigree and conformation, had 3.3% and 7.0% AGS winners of 2009, respectively, using the number sold in 2007. The average price of FT July’s 12 AGS winners of 2009 was $141,500 and the median was $150,000. FT Saratoga select has produced 10 AGS winners of 2009; their average sale price was $431,000 and median was $330,000.

The Keeneland November breeding stock sale has had 12 of its graduates (10 weanlings, two horses of racing age) win AGS races in 2009. Their average was $415,083, buoyed by the world record price $1.7-million weanling, Mi Sueno (winner of the Grade 1 Darley Debutante last week), and the $2.4 million Mushka, who sold as a 3-year-old at last year’s Keeneland November sale. The median price of the 12 AGS winners sold at Keeneland November was $79,500.

Rounding out the auctions that have produced the most 2009 AGS winners are a pair of 2-year-old sales, Fasig-Tipton’s Midlantic May sale and the OBS March sale, with eight each. FT Midlantic’s eight AGS winners sold for an average price of $130,125 and median of $92,500, and the eight OBS March AGS winners sold for an average of $256,875 and median of $260,000. Using the number of 2-year-olds sold at their 2007 sales, the FT Midlantic AGS winners represent 2.3% of the number sold and the OBS March winners 3.2%.

 

After all the problems Santa Anita experienced with its Cushion Track synthetic surface this past season, why did track management decide not to go back to a conventional dirt track and instead commit to installing a synthetic surface manufactured by the Australian company Pro-Ride? Aside from the fact the California Horse Racing Board has mandated all major California racetracks use synthetics instead of dirt for their main surface, Santa Anita was merely following the wishes of horsemen who were asked which type of surface they preferred.

The decision by Santa Anita management took on added significance because the Breeders’ Cup world championships will be contested there in both 2008 and 2009, marking the first time the former dirt races will be held over a synthetic racetrack.

In March of this year, Ed Halpern, the executive director of the California Thoroughbred Trainers, sent a letter to Magna executive Frank Stronach and Ron Charles detailing the results of a survey conducted among Santa Anita-based trainers. The Paulick Report obtained a copy of that letter.

The letter begins: “The board of directors of the California Thoroughbred Trainers has asked that I write to request that you take whatever action may be necessary to retain a synthetic surface at Santa Anita. One only needs to look at the facts to support this conclusion. Since the introduction of synthetic surfaces in California, barn areas are now filled, trainers have moved to California from across the country, field size has grown dramatically, injuries are down, and horses are racing more often. Those facts speak loudly and are irrefutable.”

Halpern then outlined the survey, which asked trainers to rate their surface preference five different ways:
-Strongly favor dirt
-Favor dirt
-Neutral
-Favor synthetics
-Strongly favor synthetics

Trainers were contacted personally and could sign their name or respond anonymously. Ninety-two of 115 trainers with horses in training at Santa Anita responded.

To quote further from Halpern’s letter:

“Of all those responding who strongly favored dirt or strongly favored synthetics, 70% strongly favored synthetics.

“Of all those responding who indicated that they either strong favored or just favored dirt or synthetics, 70% favored synthetics.”

Eleven trainers were neutral.

Trainers representing 90% of the horses in training at Santa Anita favor synthetics, according to Halpern. “Hence, there is is overwhelming support for synthetics from trainers who have trained at Santa Anita,” Halpern wrote. “That support exists in spite of the problems that were encountered due to the failure of the Cushion Track product. Trainers favoring synthetics cited numerous reasons for their support. They indicated that their support was based on a significant decrease in injuries, the ability to continue to train and run on a safe and non-sealed surface, even during periods of rain, and the ability to train horses through minor injuries. The latter benefit means significant and substantial savings for owners who no longer need to turn out horses for months before resuming training.”

One month later, the CTT sent a second letter to Stronach and Charles with the results of a survey of trainers based at the Northern California racetrack, Golden Gate Fields, also owned by Magna Entertainment. Golden Gate has a Tapeta Footings synthetic surface.

Here is how those 53 trainers responded:
-Strongly prefer dirt…2
-Prefer dirt…3
-No preference…3
-Favor synthetic…17
-Strongly favor synthetic…28

The opinions of California trainers seem to be supported by statistics obtained by the Paulick Report. At every California track where synthetic surfaces have been installed, the number of fatalities per 1,000 has declined, as follows:

Hollywood Park
Before synthetics, 2.87 per 1,000; after synthetics, 0.97 per 1,000
Del Mar
Before synthetics, 2.47 per 1,000; after synthetics, 0.81
Santa Anita
Before synthetics, 2.81; after synthetics, 1.71
Golden Gate Fields
Before synthetics, 3.90; after synthetics, 2.50
Bay Meadows (did not convert to synthetics)
Conventional dirt, 3.19

Aggregate
Before synthetics, 3.19; after synthetics, 1.37

A national survey of races charting horses that did not finish (DNF) a race due to various factors shows the following percentages on different surfaces:

-Dirt DNFs, 1.10%
-Turf DNFs, 0.94%
-Synthetic DNFs, 0.61%

Numerous training centers have now added synthetic surfaces, as has the OBS sale company in Ocala, Fla.

By Ray Paulick

Copyright ©2008, The Paulick Report