09/12/2011 11:02PM

Keeneland September: Sale maintains slight gain after second session dips


DRF's Glenye Cain Oakford on the sale's two select sessions. Complete coverage »

LEXINGTON, Ky. – The second session of the Keeneland September sale didn’t produce much in the way of fireworks, but in an industry as beleaguered as the Thoroughbred market, it was enough just to stay above water.

Despite a lack of blockbuster sales – only one horse, an Unbridled's Song filly, brought a bid of $1 million – the results of the second session were only slightly down compared to the numbers for the comparable session last year, with cumulative totals for the first two days of the sale running slightly ahead of last year’s cumulative figures. With bloodstock prices still mired in a slump brought on by the recession, lingering economic uncertainty, volatility in the stock markets, and still-tight credit markets, officials of Keeneland cited the cumulative increases in sounding a cautiously optimistic note at the close of selling on Monday night, the second of the sale’s two select sessions.

KEENELAND SEPTEMBER: Video reports, live sale updates from Lexington »

“With everything that is going on, the fact that this market is consistent with last year, with the numbers slightly down tonight, is very positive for the industry,” said Geoffrey Russell, Keeneland’s director of sales.

By the end of Monday’s night session, average for the two days was $353,488 for 129 horses sold, a 1.33 percent increase over average of last year, while median was up 5.3 percent, from $285,000 through the first two days last year to $300,000 this year. Gross proceeds were up 2.92 percent to $45,600,000.

The figures from the second day’s session were down, however, when compared to the second day results of last year, and they were far weaker than the numbers posted on the first day of the sale. However, those second-day figures were rescued by much stronger bidding during the latter half of the session, following an extended period when horses were failing to meet their reserves at a rate of 40 percent and the only sign of strength was the $1 million session topper.

By the time the second session ended, buybacks had declined to 32.6 percent of the horses that went through the ring on Monday night, a figure that was 11.8 percent lower than the buyback rate at the second session last year. More importantly, far more horses began attracting bids in the $300,000 to $400,000 range, a level where breeders are virtually assured of making a return on their investment.

The sale-topper, a daughter of Unbridled’s Song, was bought by Mandy Pope, the breeder of Tizway, a current leader in the handicap division this year on the strength of wins in the Grade 1 Metropolitan Mile and Whitney Stakes. A May foal, the filly presented a small profile in the sales ring compared to more mature yearlings on offer. But she had a pedigree that gave her an outsized appearance on the catalog page – out of Silver Swan, she is a half-sister to two multiple graded stakes winners, Roman Ruler and El Corredor.

The $1 million sale brought the number of horses sold for $1 million or more to three through the first two days of the session, an increase of one over the number of horses sold for $1 million or more through the first two days last year.

Midway through the Monday night session, the pavilion filled in anticipation of the arrival of hip 147, a Street Cry colt that is the first foal out of the mare Balance, a multiple graded stakes winner who is a half-sister to Zenyatta, the 2010 Horse of the Year. A large chestnut, the colt was rapidly bid up to half a million dollars, but bidding then proceeded in fits and starts and finally settled at $750,000, with John McCormack, agent, signing the ticket on behalf of Nobutaka Tada, who had already purchased two other horses earlier in the night. Tada ended up purchasing five horses for a total of $1.91 million.

The leading buyer at the sale was Sheikh Hamdan al Maktoum’s Shadwell Estate Company, which purchased 13 horses for total spending of $5,180,000, approximately 11 percent of the total spending at the sale’s first two sessions.

With little to celebrate but very little to bemoan, Russell said that the results of the first two sessions provided further evidence that the bloodstock market has now reached a new equilibrium, one that is far removed from the heady days prior to the recession. And, unless the worldwide economic climate improves measurably, there may be little to budge that equilibrium out of balance.

“Let’s face it, 2008 changed the whole world,” Russell said. “It changed the value of a horse just the way it changed the value of a house. … A million-dollar horse is now a $500,000 horse. That’s the reality.”