Posts Tagged ‘shadwell’

Investors haven’t been wild about Churchill Downs stock (CHDN), which closed at $46.45 Friday and hasn’t seen $50 a share since May 1. It’s 52-week high, $57.55, was achieved last December.

CEO Bob Evans and the TrackNet Media Group that was formed with Magna Entertainment to broker simulcast deals has refused to talk seriously with the Thoroughbred Horsemen’s Group, which is negotiating account wagering contracts with racetracks on behalf of local horsemen’s groups such as the Kentucky or Florida Horsemen’s Benevolent and Protective Associations. In fact, Churchill has filed anti-trust lawsuits against the organizations. Evans may be hoping that the longer he puts off dealing with the THG, the less resolve the horsemen will have to stick together in attempting to forge a better contract on account wagering.

That strategy doesn’t appear to be working. To the contrary, it looks more like Churchill Downs’ partner in TrackNet Media is bailing. Frank Stronach, the chairman and acting CEO of Magna Entertainment, sent out a press release a couple of weeks ago saying that Magna recognizes the THG as a beneficial national organization and is negotiating with THG.

SPEAKING OF WAGERING, hats off to Bloodhorse editor Dan Liebman for calling out the Jockey Club after it capitulated to Evans and to Churchill Downs’ biggest shareholder, Dick Duchossois, and decided to no longer provide the trade magazine with meet ending pari-mutuel handle figures. Churchill tracks under Evans and Duchossois have said that handle is no longer a meaningful statistic. Oh, really?

The decision by the Jockey Club to no longer provide this key economic indicator was disgraceful, but I wouldn’t hold out any hope the poobahs there will change their mind.

Two years ago, leading buyer John Ferguson bought 25 yearlings during the two select sessions of the Keeneland September yearling sale for $56,885,000, an average price of $2,275,400. This year, Sheikh Mohammed’s chief bloodstock adviser signed tickets for 19 yearlings, but only spent $15,655,000, an average price of $823,947.

Sheikh Mohammed’s commitment to buying what he and his advisers think are the best yearlings hasn’t changed in two years. The competition has changed, however, leaving a very short list of people to bid against the sheikh once yearling prices get to a certain point, with $1 million seemingly the magic mark. As a result of the absence of high-pitched battles that drive prices sky-high, gross receipts and average declined during Monday and Tuesday’s select sessions, but the middle-market median price has remained the same. The high-end bubble burst also created a spike in horses bought back by consignors who seem to be clinging to the expectations set two or three years ago at this sale.

Absent from those high-pitched battles was Demi O’B yrne, representing Ireland’s Coolmore operation, which two years ago spent $8,825,000 for eight yearlings and in 2007 bought 11 for $16,850,000. Coolmore did more watching than bidding this year during the select sessions, buying only five yearlings for $2,865,000. But that might be more a product of the perceived quality of the high-end yearlings that were invited into the select session by a Keeneland inspection team that some buyers have quietly said is not doing as good a job as it used to do. We’ll see how active Coolmore is over the next two days during the Wednesday and Thursday sessions that historically have proven to provide good value to buyers and a high percentage of stakes winners that rivals the select sessions.

There were 300 horses sold Monday and Tuesday for $113,357,000, an average price of $377,857 and median of $300,000. In 2007, there were 337 yearlings sold for $145,377,000, an average of $431,386 and the same $300,000 median. Thus, the gross dropped by 22% in one year, and the average declined by 12.4%. There were 132 horses through the ring that failed to sell, a buy-back rate of 30.6%, an all-time high for the Keeneland September select sessions.

This year’s select sale gross is the lowest since the $100,576,000 achieved in 2002 and the second-worst since 1999. That’s especially bad news for breeders whose product is produced for the high-end buyer in the Thoroughbred market. But it’s also bad news for Keeneland, a sale company that has had a dominant market share position on its chief rival, Fasig-Tipton, which was purchased earlier this year by an associate of Dubai’s ruler, Sheikh Mohammed.

The purchase of Fasig-Tipton, combined with a commitment by its new owner to recapitalize the company and turn loose its newly crafted management team will pose a serious challenge to Keeneland moving forward, and begs the question: Can anyone teach the elephant to dance?

Tuesday’s sessions yielded more $1-million yearlings than Monday’s (11 to 5, as reported by the sale company), but the total is far below the 30 sold last year. The session totals were: 146 sold for $57,310,000, an average of $392,534 and median of $300,000. The Tuesday session in 2007 sold 166 for $77,982,000, an average of $469,771.

Over the first two sessions, Ferguson, representing Sheikh Mohammed, and Rick Nichols, buying in the name of Sheikh Hamdan’s Shadwell Estate Co. Ltd., combined to spend more money in 2008 than they did in 2007: $25,375,000 vs. $22,380,000. Their combined purchases accounted for 22.4% of the select session gross receipts.

The 2008 declines would have been far worse were it not for a new operation, Legends Racing, a partnership formed by Gaines-Gentry Thoroughbreds, that was the third leading buyer behind Ferguson and Shadwell with 10 yearlings bought for $6,655,000. Another significant domestic buyer was Peter Wittmann’s Maverick Racing, which spent $3,100,000 on five yearlings to rank fourth among select session buyers.

The top-price of the select sessions was the $3.1 million Storm Cat filly sold Monday and purchased by Ferguson for Sheikh Mohammed.

Though Storm Cat produced the top price, A.P. Indy was the leading sire by average, with 21 sold for an average of $647,142. Here is Keeneland’s list of leading sires.

Taylor Made Sales Agency was the leading consignor by gross revenue, with 74 yearlings bringing $25,690,000, followed by Lane’s End, which sold 24 for $14,520,000. Here is Keeneland’s list of leading consignors by gross and by average.

One horse Lane’s End didn’t sell was a colt by Storm Cat out of the multiple Grade 1 winner Tranquility Lake, who produced Grade 1-winning grass star After Market for breeders Marty and Pam Wygod. The colt was part of the Lane’s End consignment and was widely believed to be a potential sale topper when it was announced he had been withdrawn about an hour before he was scheduled to be sold on Tuesday.

As the action was winding down late Tuesday afternoon, Marty Wygod and Russell Drake, farm manager for the Wygods, were puffing on what looked like victory cigars behind the Keeneland sale pavilion. After seeing the results of the first two days, Wygod said he was happy with the decision to keep the Storm Cat colt and race him rather than offer him in a shaky market, saying: “There’s just not enough money out there right now for this kind of horse.”

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(Keeneland did not report the number or percentage of RNAs in results sheets handed out after Monday’s session.)

One of those RNAs, an A.P. Indy colt out of Horse of the Year Azeri, was the talk of the sale when he was bought back by Michael Paulson for $7.7 million, which set a new record price for a buy-back. The previous record of $7.5 million was established in 1985 at the now-defunct Keeneland July selected yearling sale that also resulted in a $13.1 million world record price for a yearling sold. The 1985 buyback was for a Northern Dancer colt, Ajdal, who became England’s champion sprinter.

Paulson told Bloodhorse he is looking for partners with whom to race the colt.

The A.P. Indy-Azeri colt was consigned by Hill ‘n’ Dale Sales Agency, agent, which also was listed as the seller and buyer of a $1.2 million Storm Cat filly out of Starrer. That yearling was listed as a sale but was a buy-back by breeder George Krikorian, according to an adviser to Krikorian. That filly was one of five Keeneland listed at prices of $1 million or higher, a decline from the 11 seven-figure yearlings sold on day one last September.

The Darley and Shadwell operations of Dubai’s Sheikh Mohammed and Sheikh Hamdan, respectively, bought 21 yearlings for $15,045,000, which represents 27% of the first day’s gross receipts. John Ferguson, Sheikh Mohammed’s chief bloodstock adviser, signed the tickets on nine yearlings for $8,825,000 (another bought for $160,000 was listed in the name of Darley Stud), with Shadwell purchasing 12 for $6,220,000.

Among those purchased by Ferguson was an A.P. Indy filly out of Chimichurri that he went to $3.1 million to buy from Gainesway, agent for Jess Jackson’s Stonestreet Thoroughbred Holdings. The filly was the highest price among yearlings sold on Monday.

Legends Racing, a new partnership organized this year by Gaines-Gentry Thoroughbreds, was the leading domestic buyer with five purchases totaling $2,005,000. Two American buyers went to seven figures for yearlings: Jon Kelly bought an Empire Maker filly out of Aurora for $1.7 million and Briggs and Cromartie Bloodstock Inc, as agent, bought a Giant’s Causeway colt out of Voodoo Dancer for $1 million.

Demi O’Byrne bought two yearlings for $1,375,000 on behalf of John Magnier’s Coolmore operation.

Taylor Made Sales Agency sold 40 yearlings for $13,065,000 to be the day’s leading consignor by gross, with Eaton Sales next with 19 sold for $7,810,000 and Gainesway third with seven sold for $5,090,000.

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