Fasig-Tipton's management team deserves a great deal of credit for the remarkable two-night yearling sale that concluded Tuesday night at the Humphrey S. Finney pavilion in Saratoga Springs, N.Y. They delivered on several fronts: attracting a higher number of top-end horses to the sale than in recent years; bringing in buyers from around the world and treating them right; and presenting the auction in a much-improved facility.
The end result was an amazing turnaround from all recent trends in the Thoroughbred auction market: gross receipts were up a whopping 45.6%, average price increased by 11.1%, and median was up by 9.9%. A few years ago, these results would have been predictable if you knew going in there were better horses and more buyers. But this is 2009, when the worldwide economy has been in the tank, and the American racing industry is in decline.
As a result, beginning last September when the sub-prime mortgage crisis hit, sending international financial markets into a tailspin, auction prices have been down anywhere from 15-40%, and breeders and consignors were braced for a brutal 2009 yearling sale season. Fasig-Tipton's Kentucky yearling sale in July saw the average price fall 15.8%, which some felt was better than expected. Despite the buzz that the Saratoga catalog was vastly improved, few people predicted the kind of increase that was realized over Monday and Tuesday night.
A good part of the increase came from a contingent of international buyers that Fasig-Tipton recruited. That group was led by Sheikh Mohammed, who is associated with the new Dubai-based owner of Fasig-Tipton. It's obviously in his best interests for this sale to prosper, and he was the leading buyer, through his agent, John Ferguson, purchasing a dozen yearlings for $11,850,000. But there were several others who, along with Ferguson, accounted for nearly 43.1% of the sale's proceeds and 46 of the 160 yearlings sold, according to Thoroughbred Times. That's more than double the share foreign buyers accounted for at the 2008 sale.
The totals for the two nights: 160 yearlings sold for $52,549,500, an average price of $328,434 and median of $250,000. The percentage of horses not sold was 22%. All those numbers compare favorably to 2008, when 122 sold for $36,080,000, an average of $295,738 and median of $227,500. Last year's buyback rate was 25.6%.
The million-dollar question is whether this momentum will carry over into the big September yearling sale at Keeneland. The logical answer is probably not: we'll likely see a return to the 15-25% overall market decline.
For starters, a number of the horses that were in the Saratoga catalog might have normally gone into the first four days of the Keeneland sale, which will hurt the select session numbers. Once those first few sessions are over, the September sale relies very heavily on American buyers, which means the state of the racing industry in the U.S. will have a significant impact. And that industry, despite a few bright spots, is in decline, as measured by pari-mutuel handle and purses.
On the plus side, the economy is beginning to show signs of recovery, and the markets have rallied in recent months, though they are still nowhere near their highs of 2007 and 2008. Some racing circuits have gained (notably, those with slot machines to enhance purses), and Keeneland's auction team has responded in kind to Fasig-Tipton's more aggressive strategy by enhancing its marketing efforts and making the recent move to reduce commissions consignors pay for horses that go unsold.
But a win is a win, and the Saratoga yearling sale snapped a long losing streak for breeders and consignors. Under its new ownership, which invested in bricks and mortar along with a creative marketing program, Fasig-Tipton has sent a strong message to the industry that it intends to be a serious competitor at the top end of the yearling market.
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