02/27/2003 12:00AM

Barretts mix keeps sale healthy


LEXINGTON, Ky. - There is optimism in the California marketplace this year as sellers of 2-year-olds prepare for the March 4 Barretts select juvenile sale in Pomona, Calif.

The state's most important 2-year-old sale, previously thought to be in danger of cancellation, rebounded dramatically last year. Gross receipts rose 9 percent to nearly $11 million, the average price climbed 6 percent, and the median shot up by 14 percent. The sale topper, Atlantic Ocean, put the icing on the cake by setting a record juvenile filly sale price of $1.9 million.

One of the factors in Barretts's recent success is the increasing demand for both California-breds and horses bred out of state to race for California's healthy purses. By maintaining a good mix of Cal-bred and out-of-staters, the Barretts sale has kept its market wide. That's good for the state's breeding program in general.

The prestigious Barretts sale draws horses from all over the country, most notably through resellers, called pinhookers, who operate in Kentucky, Florida, and California. That mix helps bring a varied crowd of buyers, too. And though the auction's sale toppers often are horses bred in Kentucky or Florida, Cal-breds increasingly are hitting home runs. Those successes have given a boost to the California Thoroughbred market in general and to the Barretts sale in specific.

California's foal crop and active broodmare population boomed as the national sale market did in the 1980's, then dwindled with the market slump in the early 1990's. But now those fundamental figures are improving again, a fact that gives breeders and sellers confidence in the future. So even as national doubts gather over the country's economic forecast and the increasing likelihood of war with Iraq, Californians are maintaining steady growth in their state's Thoroughbred business.

"Our numbers are up significantly over the last three or four years," said Doug Burge, executive vice president and general manager of the California Thoroughbred Breeders Association. "In 1998, we had about 3,500 foals. Last year, we had close to 4,000, of which roughly 3,800 will be registered."

Burge and many others credit strong purses and changes in the California's statebred awards program for prompting the growth.

"In the mid-'90s, we made legislative changes whereby awards, which had been paid in both open and restricted race, now are paid only in open races," Burge said. "The first major change we made was to revamp the owners' awards to stress quality, and now we guarantee bonuses at 30 percent. We also got license fee relief in the mid- to late-'90s, and that gave about $40 million back to the industry. That allowed purses and incentive awards to increase, and now we pay out about $14 million a year in breeder and stallion awards."

The state's open purses generally are strong, and the statebred bonus added to those open purses adds incentive for owners to buy the local stock. In addition, the state's restricted race program for Cal-breds includes about 60 stakes races worth a total of $60 million. New programs like Sunshine Millions and the Great State Challenge also provide big purses and national publicity for Cal-breds.

At the same time, an influx of well-bred stallions like Dumaani and Joyeux Danseur from Kentucky has kept California-bred quality on the rise.

Not surprisingly, breeders are seeing a greater demand for Cal-breds. And that has strengthened the state's total market, from weanling sales to breeding stock.

Resale value picking up

Jerry McMahon, president and general manager of Barretts, has seen the trend at the company's Fairplex auction venue.

"We are starting to see people buying weanlings to pinhook into the yearling sales and buying yearlings to pinhook to our March sale," he said. "It's something we're just starting to see, and it's an important part of our market that's developing. It's quite a jump from where we've been in the past."

Sky-high land and labor costs have kept many Californians from getting into the commercial breeding game in the past. But the state's purses and awards program have made it a popular destination for racing stables, a fact that translates into demand from wealthy racehorse buyers.

Where there's demand, pinhookers will soon follow. And since many of these professional resellers have their own training facilities in Florida, they can buy horses from California yearling sales, break them in Florida, and ship them back to the Golden State's juvenile auctions. That helps both the CTBA's flagship Del Mar yearling sale and the Barretts March sale, Burge and McMahon said. This year, 22 CTBA graduates are cataloged to Barretts, according to Burge.

"We're aware of the need to have California-breds in our catalog because a lot of people want to buy them," McMahon said. "First, we need Cal-breds to fill in the spaces in the market, and, second, the purse structure and the California-bred stakes races have increased in the last five years, which has helped make Cal-breds attractive to own. Our bread and butter are the California owners and trainers."

Burge of the CTBA said, "The average price for Cal-breds has increased at the March sale, as have the numbers in the catalog. I think right now the Cal-breds are starting to drive the market here in California. They're making up a larger percentage of the fields than they used to, and there's more demand for them. We've seen major national pinhookers from Florida taking advantage of the potential in the California program, and they've done very well pinhooking horses out of our Del Mar sale into the Barretts March sale. We're also seeing more California-based participants at the 2-year-old sales."

One of those California-based agents is Andy Havens, whose Barretts consignment this year includes a healthy mix of Kentucky-, Florida-, and California-breds designed to appeal to a wide variety of horsemen's racing needs.

"I think the strength of Cal-breds right now has made this a more viable, attractive market to buyers and sellers," Havens said. "A lot of the bigger pinhooking operations have trimmed down their operations, so there are fewer half-million-dollar Danzigs in the 2-year-old sales. That's opened up opportunities for quality local horses.

"The interesting thing is the number of out-of-state pinhookers who sell in California and now want to add a couple more Cal-breds to their programs. There's a real demand for those horses, and that naturally makes the sale stronger. As the desirability of Cal-breds increases, they provide a solid backbone for Barretts, Del Mar, and other markets."

Looks trump breeding

McMahon said that the number of California-breds at Barretts March has risen slightly in recent years, but he emphasized that the sale company can not rely only on Cal-breds or any other single type of horse if it expects to remain viable. But there is one common feature Barretts entrants all must have in today's market: athleticism.

"We try to take horses that we think fit the market," McMahon said. "Frankly, there are never enough of the very good ones to go around. It used to be that big pedigrees attracted a lot of buyers. But horses like Atlantic Ocean and a lot of other horses at that level didn't come here with the biggest pedigrees - they were athletes."

Havens agrees that regardless of where a horse is bred, buyers will pay the biggest premium of all for a good-looking racehorse.

"Barretts has focused on keeping the quality level of the individuals up, even if they haven't got fancy, upper-level pedigrees," he said. "Last year's sale surprised outsiders because it didn't look that good in the catalog, but the sale turned out great because those horses were good horses.

"Barretts has been smart about finding ways to accommodate changes in the 2-year-old market, and that's helped them."

McMahon hopes that will be enough this year, given the national economic climate and cautious mood.

"With this economy and the war environment, I'm concerned that the importance of all those outside factors could have a negative effect," he said. "Our entertainment economy here in California is pretty strong, and it's a dynamic economy. But all those national economic factors and the international crisis that's looming have to be a concern. But our consignors are here, and they've got good horses, and that's our strength."