09/16/2016 1:40PM

Keeneland: When seven figures isn't enough

Benoit & Associates
Take Control, by A. P. Indy out of Azeri, was bought back for $7.7 million in 2008.

What in the world were they thinking?

That’s the first thought that comes to mind for anyone when they learn that a yearling who had reached a final bid of seven figures was bought back by his consignor.

How could anyone turn down a million dollars for a horse who is untested and untried, at least a year away from the races, and still facing all the potential pitfalls in getting to the races, let alone winning? The chances that a seven-figure yearling purchase would earn back his final hammer price are very slim, though there are exceptions, such as A.P. Indy, a $2.9 million yearling who became the 1992 Horse of the Year and a champion sire.

The issue of buybacks came to mind when it was reported that Mandy Pope had bought back a colt by War Front out of 2011 Horse of the Year Havre de Grace for $1.9 million on the second day of the Keeneland September yearling sale.

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While Pope after the non-sale was apologetic for a mix-up in the reserve, saying the horse should have sold based on what she had wanted the reserve to be ($1.19 million), the placement of reserves leaves room for error.

While no consignor wants to let go of his horse for a price he considers to be below the proper value – based on sentiment or money invested – once a consignor places a reserve on a horse, there is a good chance the horse will go home unsold. For the three select sessions of the Keeneland September yearling sale, when demand for superior stock is very strong, the buyback rate was a high 31 percent.

So, Pope was not alone when she had to take her sales yearling home, though her buyback was the high-profile event at this year’s sale.

But Pope’s RNA (reserve not attained) was nowhere near a record, if that makes her feel any better.

The record price for an RNA is $7.7 million for a colt by A.P. Indy out of 2002 Horse of the Year Azeri at the 2008 Keeneland September yearling sale. You read that number right.

The colt was bred by the Allen Paulson Living Trust and offered as part of his estate. Paulson died in 2000. His son Michael was in charge of the estate and set the reserve.

The head-scratching decision becomes even more puzzling when you consider what was going on in the world at the time – world markets were crashing, with the Great Recession already under way (it officially started in December 2007) and Lehman Brothers going under exactly one week later .

Up to that point, there were only five horses based and raced in North America who had earned more than $7.7 million in their careers – Cigar, Skip Away, Fantastic Light, Invasor, and Pleasantly Perfect.

So, what in the world was Michael Paulson thinking?

Right after the non-sale, Paulson said he thought the colt would be the next superhorse.

Paulson had a change of heart – buyback buyer’s remorse – and decided that the next superhorse should find a new home the following spring. The colt, later named Take Control, was sold for $1.9 million to Kaleem Shah at the 2009 Keeneland April sale of 2-year-olds in training.

Take Control, trained by Bob Baffert, won his debut later that year but was injured and did not race again for two years. At 4, he won one of two starts. He ran off the board in a Grade 1 stakes in his lone start at 6, broke down in a workout at Santa Anita later that year, and was euthanized.

The previous record buyback had a slightly happier ending.

Ajdal, a son of Northern Dancer out of Native Partner, by Raise a Native, was bought back for $7.5 million at the 1985 Keeneland July yearling sale, where Sheikh Mohammed stopped bidding after realizing he was bidding against only the colt’s breeder, Ralph Wilson. Later, Sheikh Mohammed purchased the colt privately.

Trained by Michael Stoute and campaigned in Europe, Ajdal won seven of 11 starts and was named champion sprinter in England in 1987. His stud career was short-lived, as he died after one season at stud. Ajdal sired just one Group 1 winner, Cezanne, but did far better as a broodmare sire.

Over the years, there have been numerous seven-figure buybacks at auctions in North America – 15 at Keeneland and Fasig-Tipton Saratoga in the past 15 years – so the event is not as uncommon as it may or should seem.

RNAs are part of the sales process, with upward of 25 percent of all horses being put into the sale ring annually going home unsold.

But this double-edged sword cuts both ways, and there are countless stories of buybacks who became great racehorses and champions.

Three decades ago, buyers had a chance to purchase a Halo colt out of Wishing Well at the 1987 Keeneland July sale, but he went home on a bid of $17,000. The following year, he went home on a bid of $32,000, failing to meet his reserve at a juvenile sale in California. The colt, Sunday Silence, went on to be one of the best racehorses of the past 30 years and a record-breaking sire in Japan (when no one in America wanted him as a stallion prospect).

Three years ago, buyers had a chance to purchase a colt by Pioneerof the Nile out of Littleprincessemma at the Saratoga yearling sale, but the colt went home with his breeder, Zayat Stables, on a final bid of $300,000.

American Pharoah went on to become one of racing’s greats.