Experts optimistic about Keeneland's September sales

awincze@herald-leader.comSeptember 8, 2013 

Even the stiffest of tests can be aced with the right setup and preparation. With the 12-day Keeneland September yearling sale — the flagship indicator of the Thoroughbred marketplace — set to commence on Monday, the health of the sales arena appears to be angling steeply upward.

The results of the juvenile sales and initial yearling auctions have demonstrated the surge in buyer confidence.

Perhaps the most pleasant surprise along the way, however, has been how much of that strength is home grown.

While participation from international shoppers remains a crux of the market's health, domestic-based buyers have become the driving force in recent years, especially this season.

Beginning with the 2010 auction, domestic buyers have accounted for 77 percent, 78 percent, and 76 percent of the September yearling sales gross, respectively, according to Keeneland, with newer players like Canadian businessman Nat Rea, Ben Leon, and Lane Seliger becoming decidedly more active.

Those numbers reflect a slight increase from the peak of the market in 2006 and 2007, when domestic buyers accounted for roughly 70 percent of the September receipts, meaning that more have jumped into the fray since the market bottomed out in 2008.

"It's amazing there seems to be such a strong domestic market," said Randy Gullatt, a managing partner of Twin Creeks Racing. "In the years past it seems like we needed so much help from the foreign big buyers and now it seems we're holding our own without the help of these big guys.

"I never saw that coming to be honest with you. I was that skeptic thinking 'Oh as soon as (Dubai ruler) Sheikh Mohammed and some of these big players stepped away from the market, what was going to happen?' Now ... it seems like the market is doing fine without them."

Buyers from about 50 countries were still represented at last year's September sale with Sheikh Hamdan's Shadwell Estate Co. leading all buyers with 17 horses purchased for $8.25 million. Still, there is a sense some of the pullback that has happened from the likes of Sheikh Mohammed, whose bloodstock agent John Ferguson has been the leading buyer at Keeneland September 11 times since 1999, is partially due to the fact they are seeking out bloodlines more geared toward the turf-focused racing overseas.

"We all know the stallion base has shifted to Europe and they have a much stronger stallion base than they had 20 years ago," said Craig Bandoroff of Denali Sales. "There are less horses on pedigree here that interest them, so it doesn't surprise me."

John Sikura of Hill 'n' Dale Sales added: "They either want to see a turf pedigree or for some reason have focused their shopping in Australia or England or France or Ireland. I'm not sure the reason for that. But it should bode well for the customers here, knowing that if you find a horse you like, you're probably bidding against domestic money and probably have a better chance to buy the horse with some of that competition not here."

The depth of the domestic market is indeed cause for celebration. Also, yearling-to-juvenile resellers got their pockets filled and need their inventory restocked in the wake of a juvenile sales season which saw nearly every major auction post gains.

Fasig-Tipton's July yearling sale and select Saratoga auction both maintained that momentum, with the former posting double-digit gains in average and median. The rate of unsold horses has declined at those sales, and the decreased foal crop is increasing supply and demand in favor of sellers.

"I think (the market) follows the economy and the economy, I wouldn't say it is super strong but there is confidence at the moment," said Garrett O'Rourke, manager of Juddmonte Farms' U.S. operation. "I would say enough of the people who play at this level of the game probably have plenty of cash they were sitting on but didn't spend when the economy was shaky. Now they're back into it again.

"I think last year was a confidence builder and I would expect this year to be a very strong year."

This year's Keeneland September sale has 3,908 yearlings cataloged and will boast a new format with the select Book 1 portion now spread over four days instead of two. Just over 200 head are slated to sell each day this Monday through Thursday before the Book 2 sessions commence following the traditional dark day on Friday.

Even with strong domestic participation, how much of a gain the September exercise could have over its 2012 numbers will still likely hinge on the activity by international representatives.

"For years we thought what is going to happen when Sheikh Mohammed stops buying horses, and to see that there is health in the market and that it hasn't completely fallen apart is an encouraging thing," said Case Clay, president of Three Chimneys. "It's not healthy for a market to rely on 1 or 2 or 3 people. It's much healthier to rely on many people."

Alicia Wincze Hughes: (859) 231-1676. Blog: Twitter: @horseracinghl.

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