Horses

Key indicators decline as buyback rate soars at Fasig-Tipton July yearling sale

Herald-Leader

The Thoroughbred marketplace is an arena that craves stability. In that respect, talk of polarization amongst its participants has been one of the most consistent aspects of any sale over the last couple seasons regardless of the product offered.

Quality is rewarded and anything that falls outside of that struggles. And while the Fasig-Tipton July yearling sale certainly had its areas of strength, what resonated loudest during the first major yearling auction of the year was just how staunchly selective the marketplace remains as it readies itself for the crucial boutique and bellwether exercises in the coming months.

Among the mantras buyers have stuck to over the seasons in that the good money will show up for the best offerings. The expectations some sellers set proved more than what the current market could support, however, as the single-day Fasig-Tipton July yearling sale concluded with across-the-board declines most heavily marked by a hefty buyback rate of 37.5 percent, up from 29 percent in 2015.

While the top end of the Thoroughbred market has been well supported over the last 18 months, buyers have been notoriously unforgiving with those horses that have any holes in them be it lack of pedigree, vet issues or physical shortcomings. The middle market has been especially susceptible to such whims and, with the July sale being primarily that, many shoppers had a hard and fast price ceiling they were not willing to surpass.

Where 16 horses sold for $250,000 or more at last year’s sale, only seven reached that level during Tuesday’s exercise. And where 183 head sold, 110 failed to meet their reserve.

“I think the results were pretty indicative of the trends we’ve seen throughout 2016 and what we saw emerging in 2014, 2015,” said Boyd Browning Jr., president of Fasig-Tipton. “There is tremendous competition on the horses they perceive as the best offerings and certainly less competition on the horses they perceive as not highly desirable.

“The buyers were saying, ‘We had a hard time getting the horses bought we wanted,’ and the sellers were saying, ‘We had a hard time selling as many horses as we would have liked.’ There is selectively in the market and … buyers have discipline. They pick a number and they may bid once or twice beyond that number, but then they stop.”

One of the driving factors behind the success or lack thereof for the July auction is the activity of yearling-to-juvenile resellers looking to restock after the 2-year-old sales. Given the spotty results of this season’s juvenile market, many resellers don’t have the capital they did a year ago to reinvest and, in turn, are being more risk-averse with what they do purchase.

Even with more end-users jumping in, the cumulative gross of $15,756,500 was down 21.2 percent from the $20,005,000 generated by 205 sold in 2015 while the average ($86,101) and median ($60,000) fell off by 11.8 and 22.1 percent, respectively.

“You better have the horse, period,” said Clark Shepherd of Allied Bloodstock after they sold a More Than Ready colt privately for $235,000 after that one failed to meet his reserve with a final bid of $240,000 in the ring. “That’s why (the More Than Ready colt) was here, we felt we had the horse. It’s proven that way and it’s gotten more polarized for sure. I know you hear that word a lot, but it’s the truth — it’s the reality of (the market).”

The combination of proven sire power combined with a top physical presence is one that usually overcomes any frailties in the marketplace. To that end, a chestnut son of Curlin that is a half-sibling to two stakes winners topped all offerings Tuesday when he sold to Randy Hartley and Dean DeRenzo for $475,000.

Consigned by St. George Sales, the Curlin colt is out of the Stormin Fever mare Franscat. Purchased in partnership with Mike Hall’s Breeze Easy Stables, Hartley said they would look to resell their new purchase next year but would be equally happy to race him should that avenue not work out.

“He just has got the whole package,” Hartley said. “We’ll see what happens. We’re going to try and pinhook him, and if it doesn’t pan out, we’ve got other plans for him as well. But the goal is to make him a $2 million horse as a 2-year-old. He’s got the walk, he’s got the mind and really he is the whole package. If he can expand to that as a 2-year-old I think we’ll be perfect.”

With the boutique Fasig-Tipton Selected Saratoga yearling sale coming up on Aug. 8-9 and the Keeneland September yearling sale looming, sales participants expect the “new reality” of the market to remain steadfast — for better or worse.

“There is a legitimate, solid marketplace, but it’s not easy,” Browning said. “It’s not simple. There are not bunches of consignors doing backflips right now saying, ‘We had the greatest day of our life.’ But certainly, there was a lot of competition and a lot of interest on what (buyers) perceive as the top-end offerings. If you have the pedigrees and physicals and vetting line up, there wasn’t one person bidding against the reserve, there were 10 people bidding.”

Alicia Wincze Hughes: 859-231-1676, @horseracinghl

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