03/02/2018 11:40AM

As high end thrives, middle market for juveniles begs attention

Barbara D. Livingston
The Fasig-Tipton Gulfstream sale has been moved to Florida Derby week this year.

By the metrics, the 2017 juvenile season was an unmitigated success.

All seven of the sales hosted by major North American auction houses last year finished with a higher average sale price than in 2016, while six saw a lower buyback rate and improved or unchanged medians. Records fell at multiple sales, from cumulative figures to individual high-priced offerings, and pinhook buyers came back strong later that year with their purchases in the yearling market.

Despite the record returns, some in the juvenile segment of the marketplace still felt pensive about the health of the middle market, with buyers having gotten more discriminating and sellers having gotten more creative in placing their charges at sales where they will best show themselves and draw the most money.

With the top of the market humming along at an all-time pace, growing the buying base for the mid-range horses has become an object of focus to help maintain those high-end figures.

“I think we were probably the first to see it in the 2-year-old market, the division between the haves and the have-nots,” said consignor Ciaran Dunne of Wavertree Stables. “We’ve been dealing with that a little bit longer. If they’re perceived to jump through the hoops, the sky’s the limit. Where our greatest concern would probably be is in the middle. The top is the top and the bottom is the bottom, but the bread and butter is the middle. We need more guys in the middle that want to buy horses.”

Compared with the longer-term investments of weanlings, yearlings, and broodmares, 2-year-olds hold a special urgency to sell, because they are on the cusp of their racing careers. If a juvenile is not sold in the auction ring or moved along privately, owners may keep the horse to race themselves or to sell once the horse has proven himself.

Becky Thomas of Sequel Bloodstock noted that the cost of taking a horse from the training track to the racetrack can be prohibitive for some sellers of 2-year-olds. This, she theorized, could drive out those looking to buy yearlings and sell juveniles on the middle or lower end of the market, where finding a profitable transaction, and more importantly getting the horse off the books, has become trickier.

“I think you’re going to see a continued contraction of the market because most people can’t afford to race,” she said. “Most people doing what we do in terms of training, once you start there, that’s where you incur the biggest amount of expenses. I think we’ve got a situation where until we broaden our racing base, there’s no need for more racehorses if we don’t have the owners.”

Another prominent arc for the upcoming season is the growing focus on putting horses in the ring later in the year. The juvenile season kicks off with the Ocala Breeders’ Sales Co. March sale of 2-year-olds in training on March 13-14, making it the latest major kickoff sale in recent memory.

In the early 1980s, the Florida Thoroughbred Breeders select sale of 2-year-olds in training started the season in late January. For many years, the leadoff slot belonged to the OBS February select 2-year-olds in training sale, which was often held in the first week of the month, but it was moved to mid-February before the auction was folded following its 2010 edition.

Early March sales have been the typical starting point since the turn of the decade, but this year’s OBS March sale brings the beginning past the first week of the month for the first time.

This year marks the fifth time a new sale has kicked off the major juvenile calendar since 2010, when the OBS February sale was held for the last time. The Fasig-Tipton Florida select sale took over the mantle for a year in 2011, followed by the Barretts select sale from 2012 to 2015.

Fasig-Tipton’s Florida sale, since moved to Gulfstream Park, was the leadoff sale in 2016 and 2017 and will take place this year on March 28, just before the track’s Florida Derby on March 31.

“I really like the Fasig sale coming after OBS, because the horses that we send there are more two-turn kind of horses, and an extra month will really be to their benefit,” Dunne said. “I think the more time we can give them, the better. It can only be a positive for both the horses and the buyers.”

Boutique auctions early in the year, geared toward fast starters, have become less common over the past decade, and much of the market’s growth has sprung from auctions that previously made up the open market. This was evidenced last year by the across-the-board record returns in the bellwether OBS spring sale of 2-year-olds in training and an all-time-high-priced offering at the Fasig-Tipton Midlantic 2-year-olds in training sale.

Consignor Eddie Woods said the move to start later in the season also can be attributed to fewer horses being offered and, as a result, fewer sales. Sales were folded into each other, often to the benefit of the later sale.

”The foal crop is down, and while there are still a lot of horses getting produced, it’s not like it was,” Woods said. The schedule is “more catered to the numbers that are out there than anything else. The only thing I’ve noticed change is when you don’t have a good horse, nobody wants to buy it.”

While the leadoff position has seen some back and forth over the past half-decade, the most significant shifts on the calendar for 2018 come from the West Coast, where Barretts has changed its schedule, both out of necessity and with the hopes of bolstering its catalogs.

The California-based auction company previously hosted a select juvenile sale in early March, then came back with an open sale in May. This year, Barretts will combine its two sales into a single auction in April, while expanding its paddock sale for race-ready horses in July to include more 2-year-olds.

Barretts general manager Kim Lloyd said a change had been on the horizon for the 2-year-old schedule since the auction company moved its base from Pomona, Calif., to Del Mar in 2015. The May sale created logistical issues with the Del Mar National Horse Show, held on the same property at about the same time, while the catalog size dipped.

Combining the select sale with the open May sale produced a catalog of 159 entries for this year’s new spring sale. Lloyd said he was pleased with the diversity of horses, drawing nicely from both the national-level feel of the March sale and the local ties of the open sale.

“I didn’t know how our local, regional people would respond, but they’re here in force this year,” Lloyd said. “We’re really looking forward to having a bigger catalog. We’re looking for quite a change in the sales here.”

Barretts has been in the midst of a soft launch for its paddock sale as a venue for juveniles for a couple years, growing the number of 2-year-olds presented alongside the racing-age offerings with each renewal.

The paddock sale expands the 2-year-old auction season into mid-summer, which Lloyd said posed its share of advantages. Among them, sellers would have one more chance to develop or redirect a young horse to the auction ring, and buyers could have the opportunity to quickly recoup their spending at a major summer meet instead of waiting through the spring.

“We had 21 [juveniles] preview last year, and they sold well,” Lloyd said. “With that confidence, we felt like we could take 50 or 60 horses if we had to in the paddock sale and preview them. It just opens doors for opportunity for everybody, from back East and also our local people. If there’s a hiccup, they can give a young horse plenty of time and we’ll have a terrific outlet for them in the paddock sale.”