09/13/2011 2:19PM

Pope seizes a buying opportunity at Keeneland sale

Photos by Z/Keeneland
Whisper Hill Farm owner Mandy Pope paid $1 million for an Unbridled’s Song filly on Tuesday at Keeneland.

LEXINGTON, Ky. – Whisper Hill Farm owner Mandy Pope had just signed the auction receipt for her first $1 million horse: an immature but poised Unbridled’s Song filly who is a half-sister to Roman Ruler and El Corredor. The gray or roan filly, with white socks and a broad blaze, represented Pope’s single biggest investment in the Thoroughbred market, and a long-term one. After racing, the filly will join Pope’s broodmare band in Florida and will, Pope said, have a home for life.

Until she bought this filly – one of three to bring seven figures from the Keeneland September sale’s select Book 1, followed by another sold for $1.2 million at the first Book 2 session Tuesday – Pope’s high-water mark was the $600,000 she spent on the 2-year-old Giant’s Causeway filly Dreamingly in 2009. Now, Pope was stepping up her budget at a time when other buyers, affected by concerns about the larger economy, were backing away from such expensive and fragile purchases as Thoroughbred yearlings. Discussing this move, Pope and her fiancé , veterinarian Michael Chovanes, echoed the competing impulses that affected the September select sessions’ buying ranks and contributed to a market that was thin and selective. Keeneland’s two-night select portion ended with modest gains overall, after gains Sunday night were narrowed by losses Monday night.

“If you can afford to do this, now is a good time to do it,” said Pope, breeder of millionaire Tizway. “You have less competition to try and buy the horses, and trying to sit and save the money right now with the economy where it is isn’t really that beneficial. You’re afraid to put it in the stock market, you don’t know where to put it. So I’ll put some of it in horses.”

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

“But the costs are so high to race a horse, and first-time owners valiantly try to support and pay the tremendous bills to race horses, but the economics are against you,” Dr. Chovanes added. “That’s still the prevalent factor in the market and the bottleneck in why yearlings are not sold. The bottleneck is that there aren’t enough owners, because they can’t make enough money racing a horse. The rewards aren’t enough.”

The Keeneland September yearling sale’s select sessions sent a similarly mixed message to Thoroughbred sellers, but ended with cumulative increases as a smaller yearling supply narrowed the gap with buyer demand.

The 13-day auction’s two select sessions, which wrapped up late Monday night in Lexington, eked out a 1 percent gain in average price and a 5 percent uptick in median. Gross sales also advanced 3 percent. The sale put 129 select yearlings through the ring Sunday and Monday nights, and they grossed $45,600,000, for a $353,488 average and a $300,000 median. Buybacks edged up slightly, from 31 percent to 33 percent.

The select sessions yielded three seven-figure horses. They were the Hill ‘n’ Dale agency’s $1.4 million A.P. Indy-Malka colt bought by a partnership including John Amerman and Shel Evans, a $1.2 million Street Cry-Forest Music colt that George Bolton bought from Stonestreet Stables (Gainesway, agent), and Pope’s $1 million filly, also consigned by Hill ‘n’ Dale.

The cumulative figures lent credibility to the idea that the Thoroughbred market is stabilizing, stability being the new goal after two years of steep slides in bloodstock prices. But the noticeable climate change between the Sunday and Monday sessions suggested that stability doesn’t mean overall strength yet. Sunday’s session saw bigger gains as average rose 9 percent and median soared by a better-than-expected 40 percent as compared to last year’s opening session. Two of the select session’s three million-dollar horses, the sale-topping $1.4 million A.P. Indy-Malka colt and a $1.2 million Street Cry-Forest Music colt, sold Sunday night. But the buyback percentage sounded a warning note: the rate at which yearlings failed to reach their sellers’ reserves jumped to 32 percent from last year’s 26 percent.

The sale hit a speed bump Monday night, even after selling the $1 million Unbridled’s Song-Silvery Swan filly to Pope. Average fell 7 percent and median lost 4 percent after a rocky stint during which buybacks at one point were running near 40 percent. That figure soon adjusted as sellers realized they were in choppier water, and the session’s reserve-not-attained rate improved in the end, falling from last year’s 37 percent to 33 percent; there were 13 withdrawals from the session.

Still, Monday’s $328,065 average and $300,000 median were heady prices for a highly perishable luxury item, and that revealed a continuing truth about selling yearlings today: high-end buyers are willing to spend handsomely for horses that meet to their ideal, but there appear to be fewer such buyers and their ceiling has hardened considerably in the wake of the recession. The biggest of those spenders, though, say they’re making long commitments to the sport, despite economic woes, falling handle, and racing’s internecine strife.

“The industry is a result of the economy,” said Besilu Stables Benjamin Leon, the select sessions’ second-leading buyer by gross after spending $4,575,000 for seven yearlings, behind Sheikh Hamdan al-Maktoum’s 13-horse total of $5,180,000. “When the economy improves – which it will, it’s just a matter of time – the prices and the values of Thoroughbreds are going to change back up, maybe not to 100 percent of where they were at one point, but they certainly are going to go back up a lot from where they are today.”

In the meantime, sellers and buyers alike are banking on quality.

“We’ve had very special horses with significant pedigrees, and they’ve been well received,” Hill ‘n’ Dale owner John Sikura said. “I think it’s a very selective market, and we’ve been investing for many years to acquire significant mares with world-class pedigrees. You have to offer good yearlings out of those kinds of mares.”

That message resounded again Tuesday as Book 1 buyers extended their stays and continued to fire for richly pedigreed yearlings. About halfway through the session, Leon purchased the auction’s fourth millionaire, Valkyre Stud’s $1.2 million Bernardini filly, a half-sister to Breeders’ Cup winner Shared Account. The dark bay is out of Silk N’ Sapphire, by Smart Strike.

“She was right up there with the very best,” Leon said.