08/04/2010 8:05AM

A single seven-figure horse reflects "new reality"

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Barbara Livingston
This A.P. Indy-Maryfield colt brought $1.2 million at Fasig-Tipton Saratoga

SARATOGA SPRINGS, N.Y. - Fasig-Tipton's Saratoga select yearling sale ended Tuesday with declines in gross and average and a single seven-figure yearling that reaffirmed what sales executives and sellers are now in the habit of calling "the new reality."

The auction's lone millionaire was the first horse through the ring on Tuesday, an A. P. Indy colt who is the first foal out of champion sprinter Maryfield. Consigned by Bluewater Sales agency, he bucked up sellers' spirits when he brought $1.2 million from trainer Todd Pletcher. The name Pletcher printed on the sale receipt also presented cause for optimism. He made the purchase on behalf of a relatively new buyer, Benjamin Leon's Besilu Stables. Leon, a Paso Fino breeder in Micanopy, Fla., jumped into the Thoroughbred business for the first time at last year's Saratoga select sale when he purchased a $650,000 Storm Cat-Get Lucky colt through agent Chris Baccari.

The continuing recession, combined with a decline in purses and uncertainty over racing's future in major jurisdictions, including New York, has made racing a harder sell to prospective Thoroughbred buyers, bloodstock agents and auction executives say. And while slumping bloodstock prices can be a selling point for new investors, they also have driven out some marginal owners who went from owning racehorse to breeding them only to suffer when yearling prices collapsed starting in 2008.

After signing for the A. P. Indy colt, Pletcher also gave a sunny update on one of Besliu's flashy purchases from last year, an $875,000 Keeneland September graduate now named Unbridled Ocean. The 2-year-old colt by Unbridled's Song was due to breeze from the gate Wednesday and could make a start at the current Saratoga meet, said Pletcher.

Last year, Leon also privately purchased the blueblooded Phipps-bred A. P. Indy mare With Flying Colors, a half-sister to champion juvenile filly Storm Flag Flying.

"He's very interested in accumulating top-class pedigrees," Pletcher said. "As a son of A. P. Indy out of a champion mare, this colt is the kind of horse we're looking for."

Besilu's apparent commitment to the game gave sellers something to cheer about, but it soon became clear that the $1.2 million sale was going to be a one-off as yearling buyers continued to hold their fire.

Tuesday's session, which closed out the two-night auction in Fasig-Tipton's completely renovated Humprhey S. Finney pavilion, grossed $17,665,000 for 59 yearlings. That was down 31 percent from last season, when 75 horses brought $25,760,000. The second session's average price of $299,407 was 13 percent lower than last season's $343,467, and the 2010 median lost 4 percent, falling from $260,000 last year to $250,000. The buyback rate increased from 23 percent to 30 percent.

The two sessions combined sold 117 yearlings for $32,415,000, resulting in an average price of $277,051 and a $250,000 median. Gross fell 38 percent from last year, when a larger catalog sold 160 yearlings. Average price was down 16 percent this year, and buybacks increased substantially, from 22 percent in 2009 to 29 percent this season. The lone bright spot was the cumulative median, which held level with last year at $250,000.

Fasig-Tipton also reported seven additional private sales following Monday's opening session. Those sales, which were included in the auction's final numbers above, improved Monday night's buyback rate from 35 percent to 26 percent, as compared to the 20 percent buyback rate at last year's opening session.

"We had one horse for $1 million, and if we'd had a couple more, it would have been very similar to last year," Fasig-Tipton chairman Walt Robertson said following the sale. "I think what the world's got to realize is that $500,000 is a lot of money for a horse. It's where we're living today."

In 2009, the auction sold five yearlings for $1 million or more, including the $2.8 million sale-topping Storm Cat colt.

Sheikh Mohammed al-Maktoum, represented by his chief bloodstock agent John Ferguson, was again the auction's leading buyer. Ferguson signed for 14 yearlings totaling $6,095,000 at the 2010 auction, but his expenditures were down from last year's figure of nearly $12 million.
Maktoum accompanied Ferguson on Monday night but was not seen Tuesday night on the sale grounds.

"The market is very fair for what is perceived to be the best-quality stock," said Michael Levy of Bluewater Sales, which sold the sale-topping A. P. Indy colt. "And if you fall anywhere short of that, you better be extremely realistic on what your horse is worth if you want to trade it. We're very pleased, although we'd have liked to have gotten some more money Monday night for some of our clients, but it is what it is.
"There's still a disconnect this year between what it cost to produce these horses and what they're worth, just like in the housing market. Why should we be different? It really is about the buyer's threshold level. They're willing to pay for what they believe are the best horses, but there's zero fluff in the market. There used to be a lot of fluff. And the buying bench is greatly reduced."

There was long drop from the $1.2 million topper to the sale's second-highest-priced yearling, also sold Tuesday. That was Hip No. 194, an $875,000 Distorted Humor half-sister to 2001 Horse of the Year Point Given which Robert and Lawana Low bought from Woodford Thoroughbreds. Rounding out Tuesday night's five highest prices were for Hip No. 142, a $750,000 Afleet Alex half-brother to juvenile champion and recent Haskell winner Lookin At Lucky which Ferguson purchased from the Gainesway agency; Hip No. 178, a $750,000 Smart Strike-Sluice colt which Ferguson bought from Denali Stud, agent; Hip Nos. 119 and 187, the Lane's End agency's Street Cry-My Boston Gal colt and the Taylor Made agency's Distorted Humor-Summerly colt, respectively, which Ferguson bought for $650,000 each; and a pair of $500,000 colts bought by agent Donato Lanni. Lanni's purchases were Hip No. 171, the Hill 'n' Dale agency's Tiznow-Sensual Moment colt, and Hip No. 186, the Gainesway agency's Indian Charlie-Strike Rate colt.

Another returning buyer was Ahmed Zayat, whose Zayat Stables recently settled mutual lawsuits with Fifth Third Bank. The bank had sued the stable, alleging default on more than $34 million in loans, and Zayat countersued and put his stable into Chapter 11 bankruptcy in response. At Saratoga, Zayat bought a pair of yearlings: a $350,000 Awesome Again-Milagra colt sold by Gainesway, agent, and a $200,000 Unbridled's Song-Resplendency colt consigned by Taylor Made, agent.

Brian Graves of Gainesway confided that "I might have been a little bit disappointed" in the price for Lookin At Lucky's half-brother but acknowledged that the boutique yearling market so far is about what he had expected. In a word, bearish.

"I think the people that got him got a really good deal," Graves said. "I think he's gonna be a racehorse. But that's the way the market is right now."

"We have to accept the fact that there are bound to be adjustments," said Ferguson. "The horse racing industry in the United States is inevitably linked to the economy. Therefore, these slight dips - and it's early days - are inevitable. There are some very nice horses here, and on the whole they've sold well. But, inevitably, the market is very selective.

"At the end of the day, there are not hundreds of big American buyers wanting to buy yearlings at the top end. I don't believe that's a horse racing issue; it's an economic issue."