09/14/2012 3:22PM

Keeneland September sale's first week displays strong signs

Photo by Z/Keeneland
This son of Empire Maker sold for $1.1 million on Thursday.

LEXINGTON, Ky. – As it prepared to enter its second week Saturday, Keeneland’s September yearling sale could look back on some comforting figures from Week 1. The 11-day auction, which has a 20 percent smaller catalog and cut back its select sessions from two to one this year, ended its first week Thursday with more million-dollar yearlings, a higher average, and a median equal to last year’s. That was with scant participation from 2011’s upper-market kingpins, Darley owner Sheikh Mohammed al Maktoum and Besilu Stables principal Benjamin Leon Jr.

Through Thursday, the 2012 auction’s Book 1 and Book 2 sessions grossed $132,853,000 for 655 yearlings, down 9 percent on an overall smaller catalog versus last year’s Book 1 and Book 2, including the additional select session that was dropped this season. But average gained 5 percent, from $192,851 last year to $202,829, and median reached parity with last year’s cumulative Book 1 and Book 2 median at $150,000. There have been seven million-dollar horses so far, including Shadwell’s $1.65 million sale-leader, a Distorted Humor-Mushka colt. Last year, six million-dollar horses sold overall.

Cumulative buybacks increased slightly, from 27 percent to 29 percent. There were 129 yearlings scratched during Book 1 and Book 2.

Japanese buyers, in particular, provided a sturdy base for Week 1’s market.

Through Friday, Japanese toy manufacturer K.K. Eishindo was one of the auction’s most prolific buyers after spending $3,260,000 for 10 horses, led by a $675,000 colt from the first crop by Sea the Stars out of the Awesome Again winner Ice Mint. Big Red Farm, which recently added Kentucky Derby and Preakness victor I’ll Have Another to its stallion ranks, started the week mildly with a $191,000 Arch colt out of German stakes winner Prianca. But farm owner Shigeyuki Okada came back in splashy style at Thursday’s final Book 2 session when he bested bidders, including Maverick Racing, to buy Lu Ravi’s Empire Maker colt for a session-topping $1.1 million. Another Japanese concern, J.S. Company, picked up three colts for $1,010,000, including a $600,000 Medaglia d’Oro son of Weekend Whim, a half-sister to Haskell winner (and current Darley stallion) Any Given Saturday.

Japanese horsemen weren’t only on the buying side of Keeneland’s first week. Big Red Farm owner Okada bought Thursday’s $1.1 million topper, an Empire Maker-Lu Ravi colt from fellow Japanese breeder Nagako Fujita.

At last year’s Keeneland auction, Fujita sold this yearling’s Indian Charlie half-sister to Benjamin Leon Jr.’s Besilu Stables for $775,000, and burst into tears as she shook Leon’s hand. Fujita’s connection to Lu Ravi is deeply emotional: her husband Yoshio, who died several years ago, campaigned the filly and then kept her as a broodmare. Since Yoshio’s death, Nagako Fujita has reduced the couple’s bloodstock holdings to just a handful of mares, including Lu Ravi and a few others at O’Callaghan’s Woods Edge Farm in Lexington. Fujita lives in Tokyo and races mainly in Japan, but the decision to maintain her husband’s previous presence in the U.S. bloodstock market is a way to honor his memory.

“Her husband decided Lu Ravi is an American horse and an American dream,” Fujita said, translated by bloodstock adviser Toriumi Takashi. “So he wanted to keep horses in the U.S. That’s why she didn’t take her to Japan and just kept her here.”

The Empire Maker colt’s sale probably will lead to more Japanese spending. Asked whether she intended to reinvest the profit in more horses, Fujita smiled and pointed to the man sitting next to her, trainer Takahisa Tezuka.

“That’s why her trainer is here,” said Takashi, “to look for yearlings to bring to Japan. They’ll probably be looking for some yearlings to take home.”

Taylor Made plans RNA party

Week 1’s number were up, but many consignors described the market as “spotty” and revealed throughout the week that horses just below each session’s “big horses” were often only scraping past their reserves. But horses marked RNA – reserve not attained –on the results sheet often got a second chance in private post-sale transactions.

“Yes, we’re getting them sold,” said Woods Edge farm’s Peter O’Callaghan, who consigned Thursday’s $1.1 million session-topper. “In fairness, all the ones we’ve not sold in the ring we’ve sold after the fact, bar one, I think. But it’s a messy business trying to sell them after the fact, and we’d rather sell them in the ring when possible. You can never ask for more than you RNA’d them for in the ring, and you’re lucky if you get that. You generally get discounted prices, maybe 60 to 80 percent of what you RNA’d them for.”

Taylor Made Farm plans to hurry that process along. On Friday morning the Nicholasville, Ky., farm announced it will host an “RNA party” at the farm’s yearling complex on Tuesday from 5:30 until 9 p.m. Unsold yearlings will be available for inspection and purchase, and there will be refreshments.

Statistics expert explains the numbers

If you were confused by the sale’s median early on, you weren’t alone. The auction’s first two sessions posted gains in median as compared with last year, but the cumulative median of $180,000 was 10 percent lower than the $200,000 cumulative median for last year for Book 1 and Book 2, Day 1. So how did the cumulative median reverse the gains? Keeneland’s explanation was that last year’s cumulative median was buoyed by two select sessions – essentially, a bigger group of horses selling at generally higher prices – and that 2012’s cumulative median was likely to “catch up” to last year’s figure by week’s end (the median did catch up and ended level).

“What Keeneland is saying isn’t wrong,” said Arnold Stromberg, chair of the University of Kentucky’s statistics department, who reviewed results from Book 1 and the first Book 2 session for 2011 and 2012.

But Stromberg said the effect isn’t so much due to fewer high-priced 2012 horses; it’s that more horses this year sold in the $150,000 to $200,000 range, particularly in session two, the first Book 2 session.

“It looks like there are more horses this year selling in that range,” he said. “Those horses are below the overall median, but they’re above the median for 2012’s second session. The phenomenon is created by a little bit of a hump in the $150,000 to $200,000 range, but the overall distributions are very similar between the two years.”

That could be a result of more erstwhile select yearlings filtering into Book 2, he said.

“That makes sense from a horse-buying perspective, too,” he said. “You want the horse you want, and if it happens to be on the ‘wrong’ day, that shouldn’t stop you from going after that horse. More than one person has figured that out, and they’re bidding against each other.”

Stromberg’s take on the numbers is that the market for 2012’s Book 1 and first Book 2 sessions was, statistically, similar to last year’s.

“I would not say, ‘Oh, it’s a big deal that the overall median is down when the distributions are as similar as they are,” Stromberg said. “You would think Keeneland would pay a penalty for losing one select day, but they didn’t.”