02/20/2009 1:00AM

Buyers seek value within their budget


LEXINGTON, Ky. - Auction sellers and company officials never like to see double-digit downturns, but after the Ocala Breeders' Sales Company's February select juvenile sale last Tuesday they were glad things weren't worse.

Worldwide economic turmoil and deep uncertainty about this country's financial future affected the market, helping to drive figures down between 28 and 35 percent from last year's record-breaking results. But that was better than the 40- to 50-percent losses last fall's mixed sales endured, and OBS sellers found both lessons to learn and positive signs in the season's first major 2-year-old auction.

One of the auction's most striking features was a sharp upturn in buybacks, from 28 percent in 2008 to 38 percent this year. At recent mixed sales, even as prices plummeted, buyback rates often improved as sellers sought to reduce their inventory. Why the difference at the select 2-year-old auction? Some consignors acknowledged that they had been, as one put it, "caught napping" by a market that turned out to be more conservative than sellers had expected.

"It's a different world," said consignor Ciaran Dunne of Wavertree Stables, the auction's leading seller with nine sold for $1,212,000. "It's like everybody has a budget now. The lesson is that buyers are really conservative now. They're being a lot more disciplined and businesslike than probably we're used to. It used to be that people would pay whatever it took to get a horse they liked, but now they're much more careful and thinking about what they really think that horse is worth."

On a positive note, consignors said the post-auction private market was active and fair for horses that failed to reach their reserves. Dunne sold two more horses privately, bringing his total to 11 sold from 14 offered, a result he considered very good in today's financial climate.

"We made just enough to call it profitable," he said. "The great positive is the buyers are getting horses at realistic, fair values, better than maybe they would have three or four years ago."

More good news, sellers and sale officials say, is that buyers were numerous and interested, even though they spent less.

"They were shopping a little scared," said Eddie Woods, consignor of the sale-topping $340,000 Graeme Hall filly. "All the right people were there, and we showed as much if not more than we did last year."

Woods said two of his four buybacks later sold privately to buyers that had vetted them.

"The buyers realize that they have the edge right now," said OBS general manager Tom Ventura.

The purchasers' list included big names, such as Sheikh Mohammed al-Maktoum's representative John Ferguson, Coolmore agent Demi O'Byrne, Roy and Gretchen Jackson's Lael Stables, and the Sanan family's Padua Stables. Racing syndicates also were highly active: West Point Thoroughbreds led all buyers with six purchases totaling $1,260,000, including the $340,000 sale-topper. And there were also new faces, like Scott Ford's Westrock Stable, which bought four juveniles for $595,000.

Still, the market's new austerity will make it harder for sellers to profit. If that continues, today's juvenile consignors probably will be more cost-conscious, too, when they become buyers at the 2009 yearling auctions.

"If this economic package Obama just signed looks to people like it might do some good to help the recession, maybe these sales will pick up over the next couple of months," Woods said.

In case it doesn't, Dunne said he's already tightening up his yearling budget. "We're going to have to be way, way more conservative," he said.

Five fines for whip violations

OBS general manager Tom Ventura said the company logged five violations of its new whip rules, which prohibit striking a horse in the last eighth-mile of a breeze. Each of the violations, which Ventura termed "minor," will cost the offending rider's employer $500. At the end of the 2-year-old sale season, OBS will donate the fines it collects to a Thoroughbred-related charity. Ventura said the company hasn't decided the recipient yet.

"There wasn't any flagrant misuse of the whip," he said, "and there certainly was nothing abusive. There's just a little learning period where the riders will adapt to the new rules."

Ventura declined to name either the riders or the consignors.

Ventura also said buyers made steroid-test requests for four horses, down from 21 requests last year. All the tests came back negative, he said.

Second surgery for Sky Mesa

Sky Mesa, last year's leading second-crop sire, underwent a second surgery on Thursday at Rood and Riddle Equine Hospital, the farm confirmed Friday. But the farm reports that the 9-year-old Sky Mesa is doing well.

Sky Mesa initially underwent colic surgery on Feb. 15.

"Sky Mesa had an impaction post-operatively yesterday afternoon and the surgeons at Rood and Riddle thought it best to correct it surgically," Three Chimneys president Case Clay said Friday. "The impaction was corrected, and he has recovered well from the procedure. Again, we expect a full recovery."

Clay added that the target date for returning Sky Mesa to breeding has been slightly adjusted from March 15 to March 20.

Clay described Sky Mesa as "bright and alert" on Friday morning.