11/03/2008 12:00AM

Record $14M price comes with a twist

Matt Goins
Better Than Honour's $14 million price soared past the previous record of $10.5 million.

LEXINGTON, Ky. - Fasig-Tipton Kentucky started the 2008 November mixed sales with a world-record broodmare price of $14 million for 2007 Broodmare of the Year Better Than Honour. That price and the sale of 18 other seven-figure horses, including $5.7 million Stardom Bound, Sunday night lifted the auction to double-digit gains. But the unusual circumstances of the auction made it difficult to consider the sale a definitive indicator of the breeding stock market.

Southern Equine Stables purchased Better Than Honour to buy out its partnership with Hill 'n' Dale Farm owner John Sikura, raising its ownership stake from 70 percent to 100 percent in an electrifying bidding performance that lasted just under two minutes.

But the spectacle did not qualm breeders' and sellers' concerns over the economy, and market deflation, even at the Fasig-Tipton auction's airy heights, was evident in the buyback rate, which jumped from 26 percent to 39 percent.

Among the more startling buybacks were Backseat Rhythm, bought back at $2.5 million, and Miraculous Miss, who failed to reach her reserve on a $1.1 million bid.

Better Than Honour's record price and the sale of 18 other million-dollar horses Sunday night lifted the auction's bottom line significantly. The single session sold 91 horses for $70,279,000, up 35 percent from last year's gross for 107 horses. Average price leaped 59 percent, from $486,318 to $772,297, and median climbed 39 percent, from $180,000 to $250,000.

Several of the more noteworthy sales came when Southern Equine bought out Sikura's interests to dissolve their partnership, a situation that meant the winning partner would only pay a fraction of the final hammer price. When Southern Equine bid $14 million for Better Than Honour, for example, it actually was only paying for Sikura's 30-percent interest; as co-seller with Sikura, they received 70 percent of the money they bid, minus any commission for Fasig-Tipton, as proceeds from the sale. In effect, it paid $4.2 million for Better Than Honour. So when Sikura bid $3.1 million to buy out Southern Equine's interest in Madcap Escapade, and when Southern Equine bid a total of $9,375,000 to dissolve the partnership on six other horses, the actual dollars spent were significantly lower, depending on the percentage of the horse they were purchasing.

Those high-dollar sales, while exciting to watch, were what one Fasig-Tipton consignor dubbed "a money swap, a good show but not a real sale."

Still, Better Than Honour's $14 million hammer price goes into the books. The official price soared past the previous record of $10.5 million that Darley Stud paid for Playful Act at the 2007 Keeneland November sale. Like Playful Act, Better Than Honour was not in foal at time of sale.

Better Than Honour entered the auction ring as the last horse of the sale and amid expectations that she would shatter the world record. As the only mare ever to produce consecutive Belmont Stakes winners - Jazil in 2006 and Rags to Riches in 2007 - she was a unique commodity. The bay Deputy Minister mare also is the dam of Peter Pan Stakes winner and Japanese star Casino Drive. She has, apparently, only one flaw.

"I have only one thing to say, and I think we can forgive her," auction announcer Terence Collier said before bidding opened. "She is a cribber."

That clearly didn't matter. Auctioneer Walt Robertson cheekily asked for $20 million, but bidding opened at a more sedate $1 million before skyrocketing to $10 million. That was Sikura's final bid, put up as a statement as much as a serious offer.

"I bid to $10 million because I thought she was deserving of the world record," he said. "I guess if they came to me with the ticket for $10 million, I would have stammered a little bit, but I would've signed it. But for me it was really a statement that I thought she should eclipse the record."

Asked what his bidding strategy was, Southern Equine principal Mike Moreno said, "Take her home. She's the best mare in the world. We're in this thing for the long term, and you can't build a long-term operation without blue hen mares. She's it. She's a Picasso. You can't sell a mare like this."

Better Than Honour's stratospheric price put everything else in the shade. But three other horses sold for $3 million or more. One of those was recent Breeders' Cup Juvenile Fillies winner Stardom Bound, who brought $5.7 million from IEAH Stables, the owner of Kentucky Derby winner Big Brown.

Underbidders included her former owner, Charles Cono, who was on hand with wife Karen and Stardom Bound's trainer, Chris Paasch. He went to $4 million before letting his filly go.

The bidding quickly settled into a battle between Michael Iavarone of IEAH inside the pavilion and a representative for Frank Stronach, in the back walking ring.

After a lengthy bidding duel, Iavarone was ready to fold at $5.6 million and shook his head. But before the hammer fell, Iavarone turned to look at trainer Rick Dutrow seated in the row behind him, then turned back to the auctioneer's stand and gave one more nod.

"Rick wouldn't let me say no," Iavarone said. "She's got plenty of residual value, so I see a couple million dollars of risk here. We've taken more risk than that before."

IEAH plans to race the filly at 3, but she will not be part of the hedge fund-style group that IEAH launched during the Triple Crown.

"We've got some celebs in this group," Iavarone said, coyly refusing to identify them despite Dutrow's best efforts to get him to spill the names.

For Cono, the sale marked the beginning of the end of his racing stable. Both he and Paasch will get out of the game after gradually dispersing the Conos' horses over the next few months.

"I hate to lose the horse, but there comes a time in your life when you fish or cut bait," Cono said. "We had eight years of good fun and a lot of good horses. If I had to do it over again, I'd do the same thing.

"I got three companies I own, so I'm busy all the time. I've got a full plate already."

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