09/26/2007 12:00AM

Late gains almost erase sale's early drop

EmailLEXINGTON, Ky. - For many consignors, the two-week Keeneland September yearling sale that ended on Tuesday afternoon might be more memorable for its last open day rather than for its early select sessions.

The auction opened Sept. 10 with a record catalog of 5,553 horses, an increase that prompted fears that the sale's final sessions would sink due to oversupply.

But the correction that took place at the top of the yearling market during the opening two select sessions did not seem to reflect any depression in the overall market. In fact, the last few sessions - usually fairly sleepy affairs - fired off dramatic gains that had tail-end consignors smiling. And they provided convincing evidence that the Keeneland September sale's 2007 edition was healthier than last year's version, even though the final cumulative figures were down across the board.

In 15 sessions, Keeneland sold 3,799 horses for $385,018,600, a decline of 4 percent from last year's total for 3,556 horses. Average price dropped 10 percent, from $112,427 to $101,347, and median fell 7 percent, from $45,000 to $42,000. But the buy-back rate stayed essentially the same as last year, rising slightly from 22 percent to 22.5 percent. Just under 12 percent of the original catalog, or 652 horses, scratched either before or at the sale.

"We were confident that the middle market would be very strong, especially when you factor in the weakness of the dollar, because that encouraged international people to step up and spend more," said Keeneland sale director Geoffrey Russell. "But the last five or six days were especially rewarding. We had a record sale last year, and yet we still had gains for 13 of the 15 sessions this year. That speaks volumes."

In addition to a better foreign exchange rate, Russell credited slots revenue and new tracks like Presque Isle Downs for increasing interest in the game.

It is a measure of Darley and Coolmore's importance to the market that decreased activity by those two players accounted for much of the decline in the sale's opening two select sessions. Last year, frequent select-session clashes between Darley principal Sheikh Mohammed al-Maktoum and longtime rival John Magnier of Coolmore Stud sent prices as high as $11.7 million, the amount Maktoum paid for Meydan City. They bought eight horses costing $2.8 million or more, paying a total of $48.6 million for them. Not surprisingly, such extravagance made 2006 a record-breaking year for the Keeneland September sale. Those numbers were bound to be hard to match in 2007, especially now that Maktoum and Magnier apparently have little interest in bidding against each other.

This year, when Magnier walked away with the top-priced yearling, an Unbridled's Song-Secret Status colt, it cost him relatively little at $3.7 million. Such "bargains" on days one and two caused the cumulative gross and average to decline, but the cumulative buy-back rate of 22.5 percent and repeatedly strong daily medians told a more positive tale: that consignors who sent their yearlings through the ring generally found market prices acceptable.

Keeneland's Russell still worries about long-term oversupply in the Thoroughbred yearling market, but for now, things look pretty good to commercial breeders. Just ask Oscar Penn, who owns the Penn Farm sales agency with his brother Sam. The pair started selling yearlings on Day 10 and finished at the final session. They sold seven of their yearlings for prices ranging from $2,000 to $26,000. Their cousins, Frank and John Penn of Penn Sales, sold earlier in the auction and hit one of the sale's notable home runs on Day 3 when they sold a $575,000 El Corredor colt conceived on a $20,000 stud fee.

Oscar and Sam could have been forgiven for expecting all the money to be gone by the time their own consignment came to auction, but it wasn't.

"We basically felt it was way up for us," Penn said. "It far exceeded our expectations. When our first filly at the last session went through for $22,000 and we had a $7,500 reserve on her, you can imagine we thought, 'Whoa, this is doing fine.' "

The market could be spotty, Penn acknowledged, pointing out that the first yearling he and his brother sold Thursday, a Yankee Gentleman filly that was their pick of the consignment, brought $10,000 when they had expected $25,000. That prompted a comment that consignors probably never thought they'd hear from anyone who used to think the last session of September was, as one called it, "the kiss of death."

"In the end, I kind of wish she'd have sold on the last day," Penn said.