02/06/2009 12:00AM

Sales braced for pain, but optimistic

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LEXINGTON, Ky. - The 2008 select juvenile sale season took place amid concerns of global recession. A year later, the feared recession has become bleak reality and bitten horse sales hard, cutting auction prices by 40 percent to 50 percent since last fall. The select juvenile season opens Feb. 17 with the OBS February auction, and this time executives at major sale companies are bracing for downturns. But they point to two potential bright spots: Race-ready horses have been in relatively strong demand so far in the recession, and lower prices overall could attract bidders in a buyer's market.

Last year's select sale results at OBS, Fasig-Tipton, Barretts, and Keeneland were a mixed bag. Several auctions managed to hit some high points. The Ocala Breeders' Sales Co.'s pair of select auctions in February and March enjoyed record-breaking runs, and Fasig-Tipton's Calder sale had a $2.1 million sale topper in Desert Party.

But median prices fell at every auction except the two at OBS, and sale-topping prices also were generally lower in a sign that even upper-market players were less willing to spend.

By the end of 2008, the juvenile sale results looked comparatively buoyant, and yearling-to-juvenile resellers were likely breathing a sigh of relief, as they watched fall yearling and breeding stock prices tumble 40 percent to 50opercent, that the worst of the market turn had come after their spring selling season. The question now is whether juvenile sellers will see downturns that steep in 2009.

Most sale officials are hopeful they won't.

"My gut impression is that we'll feel some of the pain, but not as significant or dramatic as it has been in the mixed sales," said Tom Ventura, OBS's general manager. "It's a different group of buyers, in comparison to the other sales. And the purses at many places have gone up."

Ventura points to increased purses in Pennsylvania, Louisiana, and Canada - as well as renewed optimism for slots coming to New York - as a draw to racehorse buyers looking for quick action on their investments. The fact that 2-year-olds in training are closer to a race than their yearling counterparts also helps.

"There's some indication that the closer to the races you are, there continues to be an active and vibrant market," said Fasig-Tipton CEO Boyd Browning. "There's still demand for quality horses, and the closer they are to the races, the more insulation there seems to be in terms of their market valuations."

The Barretts March sale in Pomona, Calif., had double-digit losses across the board last year in what could have been the leading edge of the market's downturn. This year, the company will respond to the market with a smaller sale catalog, vice president Bill Baker said. One reason: The large population of Florida-based sellers is being highly selective about which horses they will pay to ship across the country in a down market.

"But I would guess that the demand's going to be a little softer," Baker said. "Anyone thinking otherwise has got to be fooling themselves. We've tried to lower the supply and protect the market. We did that for our January [mixed] sale, and it held up pretty well. I think the top end will be strong, but it will be tough sledding for a lot of horses."

The major sale companies have redoubled their buyer recruitment efforts, sending additional staff to talk to potential attendees face to face at racetracks and contacting racehorse owners here and abroad who might be persuaded to try the U.S. juvenile market for the first time. They're sending the message that the 2-year-old auctions offer attractive racing prospects and probably at better prices - from a buyer's standpoint - than in recent years.

They're also heavily emphasizing the juvenile sales' strong records for producing such runners as champions Stardom Bound, Big Brown, and Forever Together, and 2008 Grade 1 winners Backseat Rhythm, Court Vision, and Sky Diva, to name some recent successes.

"It's always been a high-risk, high-reward part of our game," said Keeneland sales director Geoffrey Russell. "I think the 2-year-old consignors have done a very good job buying their yearlings well. If they had to compromise, they compromised on pedigree instead of physicals, and they just bought fewer horses."

That could translate into reasonable reserve prices.

"But you're always concerned that you have enough buyers," Russell said. "I think the lower end of the 2-year-old sales will be difficult. I think the top end will come down from last year. There will be polarization, because that's the nature of the beast: the horses that perform well on the track, people want."

First of final Storm Cat foals arrive

The first member of Storm Cat's final crop has arrived. The bay filly out of Earle I. Mack's mare Western Princess was born Feb. 3 at Denali Stud in Paris, Ky.

Western Princess, a stakes-placed Gone West mare, is one of only three mares pronounced in foal to Storm Cat last year. Overbrook Farm, which stood Storm Cat until his retirement last May due to declining fertility, declined to reveal the names or owners of the other mares because it did not have authorization to do so.

"She's a very leggy filly, and both she and the mare appear in good health," Denali manager Gary Bush said. "We called Mr. Mack with the good news, and he is very pleased. We're excited to have them on the farm and expect many of our visitors will want to see this filly."

* A Virginia Senate bill designed to prevent undisclosed dual agency and increase transparency in horse sales has died in committee. The legislation, Senate Bill 967, had been referred to a subcommittee of the Senate Courts of Justice Committee. After a hearing on Thursday, the bill failed to advance on a 3-3 tie vote.

* The Thoroughbred Owners of California has appointed Arnold Zetcher, retired chair of Talbots women's clothing stores and a racehorse owner since 2000, to fill a vacancy on its board.