Updated on 09/17/2011 9:42AM

Keeneland July may be '03 scratch

In the last 10 years, the gross for the Keeneland September sale has more than doubled, while the gross for the July sale has actually fallen by about $7 million.

LEXINGTON, Ky. - Keeneland officials are considering whether to cancel the July selected yearling sale this year for the first time since the sale's inception in 1943.

The Keeneland Association has been polling consignors and buyers since Christmas week and is expected to announce a decision about the sale - at least for 2003 - by the end of the month, according to one Keeneland official.

Keeneland's director of sales, Geoffrey Russell, had no comment Monday on the possibility of canceling the sale, other than to confirm that Keeneland has been polling consignors and buyers.

Two years ago, the July auction set a record average of $710,247, and it still holds the world record for a yearling at auction, $13.1 million for Seattle Dancer in 1985.

But equine disease, declining fortunes in the boutique yearling market, and the growth of Keeneland's September auction have eroded Keeneland July's position as the world's pre-eminent yearling sale.

The July sale's future has been in question before. In the late 1980's and early 1990's, consignors and buyers questioned the auction's viability in the wake of a collapsing market for bloodstock, but the sale stayed on the calendar with reduced catalogs.

Holding a smaller 2003 July sale is also among the options that Keeneland officials are considering, as is incorporating the July boutique in September's two select sessions.

Early fetal losses caused by the mare reproductive loss syndrome in 2001 are key to discussions about the July sale's future. Breeders and consignors in particular are concerned that the projected loss of between 20 percent and 30 percent of the 2002 foal crop, pregnancies lost in 2001 that otherwise would have matured into yearlings this year, will take a heavy toll on the boutique July auction, which sold a record low 87 yearlings last year.

On Monday, Russell acknowledged that he is "very concerned" about the effects of MRLS.

"MRLS will have a huge effect on the yearling sale this year," Russell said, adding that the disease had a disproportionate effect on mares bred in January and February, the mares whose early foals become many of the yearlings Keeneland selects for its July sale.

The sale also has been affected by other factors. A general decline at the top of the yearling market last year, which saw 30 percent financial declines at nearly every select sale, hit Keeneland July especially hard: the 2002 July sale's gross and average sank by 33 percent and 46 percent, median dropped 42 percent, and buybacks climbed from 30 percent to 40 percent. And, Keeneland's own success in September has stolen some of the July sale's thunder. The September sale's two-day select portion has become the company's premier yearling sale in recent years, with results good enough to entice even perennial July leading seller Lane's End, whose owner Will Farish opted in 2000 to sell in September instead of July. Farish now sells in July and September.

"The success of the September sale has put pressure on July," Russell admitted. "The September select days are considered now to be the auction place in the Thoroughbred market.

"But," he added, "the July sale also has been a successful niche in the marketplace."

Two years ago, when the July auction set the record for average, no fewer than 16 lots sold for $1 million or more. That was before the economic downturn and before MRLS, the two issues cited most often by consignors interviewed about the July sale's viability this year. Most favored giving the sale a one-year break. Even those like Keeneland director John T.L. Jones Jr., who prefer to conduct a sale in 2003, acknowledge it will be hard to overcome MRLS's effect.

"I'd say they should have it," Jones said. "It's been here forever. Why stop something just because it's had a hiccup? I think we should have a three-day sale with enough horses to really bring people here.

"But MRLS took out those early foals that would have been July horses, and that will have a bearing on it."

"I think it will be very hard for them to have it this year," said Duncan Taylor, another Keeneland director and a principal in his family's Taylor Made Sales agency. "I think we need the July sale, but with MRLS it will be very hard to get enough horses for it to keep people interested in coming to the sale.

"It's a great sale, we need it," he said. "It gives us selling options and breeders need that option, but with 30 percent of the foal crop lost, and I guess about 45 percent to 60 percent of the July group lost out of that, it's going to be tough."

Keeneland officials heard comments like these as it surveyed Keeneland sellers and buyers, said Keeneland's assistant sales director, Tom Thornbury.

"Our concerns are, faced with the 2003 July sale after the downturn in the July market last year, how did that downturn come about?" Thornbury said. "Was it simply economic factors? Were the horses not as good as individuals in the past? With the downturn in the premier stallion ranks, have the next major sires not presented themselves yet? Have we lost too many top-end buyers to support a small, boutique market? And with the problems caused by MRLS, will we have enough horses to make a sale?

"Anything and everything is up for grabs," Thornbury said. "We're looking to our buyers and consignors to dictate what all the Keeneland sales look like in the future. All we can do is set the stage, and the buyers and sellers put on the show."