New record set at Keeneland’s two-week auction of young thoroughbreds
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- Keeneland’s yearling sale set a record with $531.5M in total horse sales.
- Top bloodlines drove demand; 25% of sales came from four elite sires.
- Federal tax incentives, especially bonus depreciation, boosted buyer activity.
The Keeneland September Yearling Sale, a two-week thoroughbred auction ending Sept. 20, broke its sales record by more than $100 million.
In 12 sessions, 3,070 horses sold for a combined $531.5 million, signaling the strength of the industry and confidence in the sport among established, top buyers of young horses from just a few pricey bloodlines.
“The results of this sale reflect a shared achievement for the industry and a powerful source of optimism for the future of racing and breeding,” said Keeneland Vice President of Sales Tony Lacy. “Many factors contributed to these record-setting results beyond the exceptional quality of horses on offer.
“Strong purses, favorable tax legislation, growing confidence in the sport and broader national visibility through broadcast, streaming and influencers all point to a brighter future for our industry,” he said in a statement attached to the racetrack and horse auction company’s announcement it had broken its own record.
Sales this year were almost 24% higher than last year’s, led by Mike Repole’s Repole Stable acquiring 33 horses for more than $14 million.
A contingent of M.V. Magnier, Peter Brant’s White Birch Farm and Ron Winchell’s Winchell Thoroughbreds purchased a son of 12-year-old Gun Runner for $3.3 million. The horse was a leading contender in the 2016 Kentucky Derby and went on to win the 2017 Stephen Foster Stakes, Whitney Stakes, Woodward Stakes and Breeders’ Cup Classic. Gun Runner was named the 2017 Horse of the Year.
Sierra Leone, a son of Gun Runner, finished second in the 2024 Derby.
A sire, the father of a horse, with commercially desirable offspring can increase an auction’s average and median prices. Buyers gravitate toward decorated sires in the hopes purchasing one of their yearlings may give them a higher success rate and return on investment in the winner’s circle.
About a quarter of this year’s sales were made on yearlings from the following four horses, indicating need and preference while the market signals it might shift to consolidation:
- 55 yearlings from Not This Time sold for nearly $40 million, 14 of them for $1 million or more;
- 40 from Gun Runner sold for more than $35 million, 12 of them for $1 million or more;
- 44 yearlings from Flightline sold for $30.5 million, eight of them for $1 million or more;
- 41 yearlings from Into Mischief sold for nearly $27 million, six of them for $1 million or more.
“Keeneland having a big sale just puts more money into purses, more money into a world-class experience when you come race in Central Kentucky,” said Nicholasville-based stallion operation Taylor Made’s President and CEO Mark Taylor in Keeneland’s announcement. “These things are so positive and gives us a lot of optimism for the future. It is one ecosystem, and when those parts are healthy and they all come together great things happen.”
The average horse sale price increased for the fifth year in a row to $175,807. The median price also rose as did the per session average and median.
At auction this year, 18 buyers spent $5 million or more, compared to 14 last year, and 120 buyers spent $1 million or more, compared to 96 last year. Fifty-six seven-figure horses sold to a record 34 unique buyers.
Keeneland Senior Director of Sales Operations Cormac Breathnach said those metrics are exciting and show “the depth and breadth of this entire two week period.
“But ultimately, it comes down to the median and the RNA rate (which stands for reserve not attained, or a horse that didn’t sell because bidding didn’t reach the seller’s minimum) when you really look at the health of a sale top to bottom because a median is the middle market,” Breathnach said. “... If you have a healthy median or an improving medium, like we did this year, and an equal or better clearance rate, that’s as good of an indicator of the health of the market as any other.”
‘Favorable tax legislation’
Strong results from the auction can partly be attributed to the extension and reinstatement of a tax incentive for qualifying property passed in the federal tax and spending bill July 4.
As part of the ‘One Big, Beautiful Bill,’ bonus depreciation was dialed back up to the 100% deduction threshold like it was in the Tax Cuts and Jobs Act of 2017.
The incentive allows businesses to deduct the cost of assets immediately instead of over time. Qualifying assets can be new or used machinery and equipment, computer software, land improvements and racehorses, as long as they are new to the taxpayer.
Utilizing the incentive lowers one’s tax liability because it reduces taxable income. If bonus depreciation creates a net operating loss for the year, it can be carried forward to offset future income, which is a way to “average” profitability over time for tax reasons.
The incentive starts to get complicated, especially for those in the horse industry, because it’s available only for business operators, not hobbyists.
The IRS, responsible for collecting federal taxes, pays incredibly close attention to things that report losses to determine if they are legitimate businesses or hobbies. Horseracing notoriously and for a long time has consistently posted losses because expenses are often more than winnings.
Lexington law firm Stoll Keenon Ogden’s Douglas Romaine said bonus depreciation policy is meant to stimulate the economy.
“It does that by giving people an incentive to go out and spend money and acquire these assets to be used for their business,” said Romaine, who practices in the law firm’s equine transactional practice. The firm represented thoroughbred farms in 1935 to create the Keeneland Association, the nonprofit organization that later established the famed Central Kentucky race course and horse auction complex that’s now the world’s largest.
Former University of Kentucky J. David Rosenberg College of Law Associate Dean Jennifer Bird Pollan, an expert in federal income tax law and now a professor at Wayne State University in Michigan, said some form of bonus depreciation policy is passed when the economy struggles as a way to bring it back to life.
But Bird Pollan said the incentive as a way to stimulate the economy distorts decisions people may otherwise make if there wasn’t a tax benefit.
“If we knew that people would just buy the things that they needed for their business in order to (get the benefits of bonus depreciation), they replace machinery earlier than they otherwise would have and that falls in line with the goal of stimulation, whatever. But that’s not what we always see happen,” she said.
“What we see happen is that people adjust their spending in order to maximize their tax incentives and we end up motivating people to borrow.”
The tax policy, she said, asks a more fundamental question over what kinds of businesses are people interested in supporting. Historically, tax code has helped some maintain their lifestyle, it’s helped businesses that are big employers, including horseracing in Central Kentucky, Bird Pollan said.
“But there’s also a sense in which if you can end up producing a bunch of tax losses out of something that you’re calling a business, but for you is really kind of a hobby, then we’re sort of failing as a system, too,” she said.
Racing resumes at Keeneland for the 17-day Fall Meet Oct. 3 with a track record $10.85 million in stakes purses.
This story was originally published September 25, 2025 at 5:46 PM.
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