When the first colt out of multiple Eclipse champion Havre de Grace failed to sell this week for a final bid of $1.9 million at Keeneland September due to an erroneous reserve, many observers wondered where in the sale process such a costly error might have occurred. Breeder Mandy Pope told media on Tuesday that she had brought the son of War Front to Keeneland with every intention of selling him, and had informed buyers what his reserve would be as the horse was shown in the days leading up to the sale. When the hammer dropped at $1.9 million, Pope thought the horse had sold, but it turned out the reserve price Keeneland had on file was higher than the one she had intended, and the colt was an RNA.
Pope declined to name the responsible party when she spoke to the press about the incident, but it appears Keeneland's process for recording and handling reserve prices is one designed to prevent mix-ups on the part of the sale company.
Geoffrey Russell, director of sales for Keeneland, said there is a system of checks and balances in place to prevent human error when entering or transposing numbers. Consignors come to the sales office and provide staff with the reserve price they want to set. That number is entered in the company's computer system, and a form is printed with the consignor's name, the horse's hip number, and the reserve price, and the consignor is required to sign off on the information before it becomes final. That information is distributed to auctioneers when the horse comes through the ring, and they are required to check a box on their screen to acknowledge they have seen the figure, and then write it down in their books.
“Everybody gets busy. In fact, I'm dyslexic; I could say 452 when I meant 542, so we have this fallback. When you get the form to sign, you're meant to acknowledge, 'Yes that's me, that's my hip number, that's my reserve,'” said Russell.
This is also the time when consignors may give staff a heads-up about how much interest they expect a horse to get, and which buyers they expect to put in a bid, allowing auctioneers and bidspotters to keep an eye out for the right people at the right time.
Russell said consignors may enter or revise a horse's reserve until 30 minutes prior to their horse's sale or ten hips away.
“Some people do it in the morning before the sale starts or as the sale starts,” Russell said. “Some people wait until the horse is in the back walking ring. It all depends on who you are.”
There are also two different types of reserves available to consignors, each with different commissions. One type is called live money only, and requires auctioneers to bid only against live bids (those coming from buyers) up to the reserve price. The other is an 'all the way reserve,' which requires auctioneers to bid up to the reserve price, whether there are also live bids in play or not. The commission for Keeneland's purposes is based on the final bid, whether it's a live bid or not.
Russell said the requirement for consignors to sign off on the reserve amount works well to eliminate errors and miscommunications on the part of the sales agency.
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