When Dubai-based Synergy Investments purchased Fasig-Tipton Co. in April 2008, many Thoroughbred industry insiders openly wondered how the new, deep-pocketed ownership would alter the sales landscape.
Sure enough, the auction arena has become an entirely different place during the past year-and-a-half. However, the main culprit is a more drastic change that has affected every aspect of the industry.
Ever since the global financial downturn descended with full force upon the Thoroughbred marketplace last season, auction houses have been faced with the huge challenge of trying to maintain and lure buyers at a time when discretionary income is increasingly rare.
At the forefront of such efforts are Keeneland and Fasig-Tipton, North America's most prominent sales companies — though the two neighboring powerhouses have taken different approaches.
Since being purchased by a close associate of Dubai ruler Sheikh Mohammed bin Rashid al-Maktoum, the cash-infused Fasig-Tipton has made numerous upgrades to its facilities in Kentucky, Florida, New York, Maryland and Texas, often while offering its customers such amenities as gourmet food and entertainment.
Keeneland, which underwent its own multimillion dollar renovation to its sales pavilion nearly five years ago, has focused heavily on overseas recruiting via its emerging markets program while also lowering its commission on horses that fail to meet their reserves.
Though neither effort has been able to halt the declines that have struck the majority of auctions this season, many think the companies' initiatives have helped lay the groundwork for a better long-term sales landscape when and if the current hardships dissipate.
"At Fasig-Tipton, they are trying to be very innovative and get new players involved, and Keeneland is trying to do the same thing." said Mark Taylor of leading consignor Taylor Made Sales. "Fasig is trying a lot of things, but I think they're more targeting just the very top end where Keeneland has been working on solving the problem of overproduction ... and now they're working on the top end more aggressively.
"They're both working on parallel paths; they're just taking a little bit different approach."
Efforts at Saratoga pay off
One sale that bucked the downturn was Fasig-Tipton's Saratoga Select Yearling auction that took place in August.
Backed by what was widely considered its strongest catalog in years — and the first appearance by Sheikh Mohammed at the sale in nearly two decades — the boutique auction saw its gross soar by more than 45 percent.
John Ferguson, principle bloodstock agent for Sheikh Mohammed and the perennial leading buyer at the Saratoga auction, shopped harder than he had in years, purchasing 12 horses for $11,850,000 to account for more than 20 percent of the overall gross.
"(The horses) were better at Saratoga than I had ever seen," said Hall of Fame trainer D. Wayne Lukas. "The quality of the conformation and the athletic horses at Saratoga were excellent."
Fasig-Tipton's diligent recruiting efforts undoubtedly allowed it to snag several top horses that could have otherwise gone in Keeneland's two select sessions.
Any notion the company had monopolized key buyers at the expense of Keeneland, however, was dismissed when an influx of major players — including Coolmore Stud principle John Magnier — showed up on the grounds of Keeneland's September sale.
"Did Fasig-Tipton suck up all the top-end buyers? Absolutely not," said Kerry Cauthen of Four Star Sales. "You're looking at the broad marketplace (at Keeneland), and everybody that is a player is here. They're just in a position where there isn't as much money and they inherently think 'I have a point of which I'll move onto the next one' because there are next ones."
Although the results at Saratoga in August provided the marketplace with a much-needed bright spot, the boutique nature of its catalog and theatrical atmosphere surrounding it has most believing it was an aberration in the current economy rather than a sign of things to come.
"When it comes to the overall picture at the end of the year when you're evaluating sales, I think you have to take Saratoga out," said Martin O'Dowd, vice president of Runnymede Farm. "That was a little bit different."
The Sheikh's influence
No buyer in the world is more scrutinized than Sheikh Mohammed, and in the aftermath of the Saratoga sale, there were rumblings the ruler of Dubai was simply supporting his own — both in terms of his stallions and his associate's sales company.
As powerful as his presence was at Saratoga, Sheikh Mohammed arguably made an even more vital statement at Keeneland's September sale, with Ferguson purchasing 31 horses on his behalf the first two days of the sale and 34 total through Wednesday. The sale ends Monday.
"Sheikh Mohammed, he loves horse racing, and I don't think he has any agenda to do anything other than help the horse industry," Taylor said. "Keeneland is part of the horse industry, and I think he wants Keeneland to do everything they can to grow the horse industry, and he wants Fasig-Tipton to do everything they can to grow. I think by nature he is a supporter, not a destroyer.
"I think he wants what is best for the industry and the demise of Keeneland isn't good for the industry."
Without question, Sheikh Mohammed has heavily invested in offspring by stallions from his global breeding operation, Darley — most notably Bernardini and Medaglia d'Oro. However, some see his recent buying spree as an attempt to prop up the industry at a time when many others are pulling back.
"I think he's being very nice to people here and supporting the farms that he knows are in trouble," O'Dowd said. "He did something very similar in England last year where he came to Tattersalls and bought a large percentage of the horses. I think he did it solely to help out the breeders.
"I say thank God for Sheikh Mohammed. He's been a savior."
Still, not even Sheikh Mohammed's massive bankroll can single-handedly reverse the effects the economic downturn has had on the Thoroughbred marketplace.
"You can't beat people over the head with a stick and make them buy horses," said international bloodstock agent Lincoln Collins.
But the same economic climate that has forced some buyers out could be the main factor that helps the sales companies lure new participants in.
As a result of the soft market, high-end horses once attainable only by the richest buyers are now selling at prices closer to middle-market levels.
"We've had people saying, 'Look at the market, let's jump in,' and I love that because we have to have players in this market," said Florida-based consignor Barbara Vanlangendonck.