Can Keeneland Buck the Sales Trend?

If success on the racetrack transcends into success in the sales ring, Keeneland is well-poised to have a successful marathon September yearling sale that could end the downward spiral experienced by previous sales this year.

Ponder these statistics: Keeneland September sale graduates have won more than 290 stakes this year, led by 38 grade/group I winners that include the winners of all three North American classics—Kentucky Derby Presented by Yum! Brands (gr. I) winner Nyquist, Expressbet.com Preakness Stakes (gr. I) winner Exaggerator, and Belmont Stakes (gr. I) winner Creator—as well as Travers Stakes winner Arrogate (gr. I).

Among those sold at last year’s sale were recent 2-year-old grade I winners Pretty City Dancer (in a dead heat in the Spinaway Stakes), Practical Joke (Hopeful Stakes), and Union Strike (Del Mar Debutante).

With 4,479 yearlings cataloged this year, resulting in an additional day of selling, it stands to reason the world’s largest yearling auction would produce the greatest number of horses competing at the highest level. However, the recent success of September sales horses transcends most expectations.

“The September sale alone is producing more graded stakes winners than all other sales combined, which is a pretty impressive statistic,” Keeneland sales director Geoffrey Russell says with a certain amount of pride. “While it is the largest yearling sale in the world, considering it is taking on all the other North American sales companies and producing more stakes winners than all of them combined is still pretty impressive.

“Our consignors bring us their best horses who go on to be put into the best hands to perform at the highest level and hopefully that means the buyers will come back to do it again.”

“Keeneland’s September sale sets the gold standard for the industry globally,” said Bob Elliston, Keeneland’s vice president of racing and sales. “No other sale consistently provides more winners and more participants on racing’s biggest stage than the September sale.”

In addition to the success of horses sold at the auction, this year’s Sept. 12-25 sale (with Thursday, Sept. 15 a dark day) includes full or half siblings to Horse of the Year Rachel Alexandra, Horse of the Year Havre de Grace, champions Beholder, Uncle Mo  , Shanghai Bobby  , Runhappy, Shared Belief, and Halfbridled, and recent Travers winner Arrogate.

Of course, the sale has offspring by the world’s leading sires, including North America’s super stud Tapit  , who is well represented in the sale, with 53 yearlings. Others among the leading sires who have yearlings throughout the sale are Candy Ride  , 64; Medaglia d'Oro  , with 57; Bernardini  , 50; Curlin  , 49; War Front  , 33; and City Zip  , 31; and deceased Scat Daddy  , 84. Uncle Mo  , champion freshman sire and leading second-crop sire whose first crop included classic winner Nyquist, has 59 entered in the sale, and Coolmore’s international-leading sire Galileo is represented by eight.

Keeneland is coming off a 12-day sale in 2015 that grossed $281,496,100 for the 2,745 yearlings that changed hands, surpassing the $279,960,500 figure for the 2,819 sold in 2014. The cumulative average increased 3.26%, from $99,312 to $102,549 and the median remained unchanged from the record $50,000 posted in 2013 and 2014.

The 2015 sale-topper was a colt (now named Tapit High) by Tapit purchased for $2.1 million by Mandy Pope’s Whisper Hill Farm. He was one of 11 yearlings that commanded $1 million or more during the auction.

Considering the success of the September horses at the highest levels of racing and the trends over the past two years in which there has been greater polarization between the top and bottom of the market, all signs point toward continued strong competition for the best offerings. But even at that level, there could be some softening of demand.

“At the top of the market, good horses always sell well, but even there I think there is a leveling off and ceiling we have not seen in the last three or four years and certainly saw in the 2-year-old and yearling sales earlier this year,” said buyer Pete Bradley.

With market malaise in the lower to middle price ranges in the previous 2016 yearling sales to date, there is concern about whether the September sale will have sufficient depth during the latter days of the auction.

“The question remains for the latter half of the sale is whether there are enough people that want to buy the lower to mid-priced range horses,” Bradley said. “Keeneland does such a good job of bringing buyers from all over the world, but I think we are still going to see a downturn in the latter part of the market and the moderately priced horses. I hope we have a market that is static with last year.”

Russell, who does not make pre-sale predictions (“We are always optimistic going into a sale.”), acknowledged some concern about the lack of market depth.

As a result, Keeneland has stepped up its North American marketing, particularly taking aim at regional markets where the potential buyer base would be active in the price ranges that have been the weakest.

Keeneland added Jesse Ullery, an Oklahoman who is one of its sale announcers, on a full-time basis to help especially in the Southwest, according to Russell.

“The middle to lower end of the market is a concern and we have seen that so far this year,” he said. “Our people are going through Louisiana, Oklahoma, Texas, New Mexico, and other regional markets identified where our graduates have done well to come up here to buy.”

One consignor who believes if any sale is resilient to the down market it is Keeneland’s fall sale, is Bret Jones, who handles bloodstock services for Airdrie Stud.

“Every potential yearling buyer in America should be on the sales grounds and Keeneland has always done a fantastic job of reaching out to the international racing community,” Jones said, adding there is a good possibility some buyers stayed away from earlier sales because they were waiting for the deep group of offerings at Keeneland.

“The obvious hope is that the deeper roster of buyers will help with those perceived bottom horses that have been such a struggle,” Jones said. “I definitely think there will be a greater safety net.”