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Updated on 09/16/2011 8:49AM
Slight recovery can't stop crash
LEXINGTON, Ky. - For about 10 minutes on Tuesday night, it looked like a glorious night at the Keeneland July selected yearling sale. There was a sleek Storm Cat colt turning around in the auction ring. Bids were flying between Coolmore agent Demi O'Byrne inside the pavilion and Sheikh Mohammed al Maktoum's representative John Ferguson in his usual spot behind the auctioneer's stand.
The bidding finally halted at $3.1 million and the sale-topping colt was hammered down to Coolmore's account. But even the redoubtable Storm Cat and his progeny - including the $2.8 million top filly bought by Eugene Melnyk - could not prevent the sale's revenues from collapsing. Coming off a horrific Monday opener in which 47 percent of the yearlings went unsold and average fell 35 percent, the final session Tuesday fared better and produced seven million-dollar lots. But the auction still closed with overall drops of 33 percent in gross, 31 percent in average, and 30 percent in median.
Overall, the auction sold 87 yearlings for $42,385,000, down from last year when 89 brought $63,212,000. Average, a record last year at $710,247, plummeted to $487,184, and median fell from $427,000 last year to $300,000. The buyback rate climbed from 30 percent to 40 percent.
The poor results prompted widespread speculation that the Keeneland July auction would be dropped from the calendar or fundamentally altered in its format. The sale has suffered attrition of quality as consignors have sent more outstanding lots to the burgeoning Keeneland September sale. Keeneland director of sales Geoffrey Russell said the auction house "is committed to July" but left the door open to a format change or cancellation.
"We are as committed to it as our consignors are," he said. "I think times have changed. Everything is on the table. We are committed to July, but it's clear September has become the marketplace, and July has lost some of its luster because of that."
Sharply criticized by buyers for a lack of physical quality, the Keeneland yearlings were dismissed one after another by buyers who refused to meet sellers' reserves.
Buyer rejection of the catalog extended even to the powerful Lane's End consignment, which scratched its six Tuesday lots rather than take a battering in the auction ring.
Lane's End, returning to Keeneland July after leading sellers for two years at Keeneland September, sold the opening session's only two millionaires, a $2 million Belong to Me-Tomisue's Delight filly to Ferguson and a $1,350,000 Gone West-Primedex filly to Overbrook Farm and Bob and Beverly Lewis. But Bill Farish, who is heading the farm's operation while his father, Lane's End owner Will Farish, serves as ambassador to Great Britain, noted that many of the farm's remaining lots had had few pre-sale veterinary exams. That was an ominous sign that buyers were not interested. On Tuesday afternoon, Farish sent written notice to Russell that he was pulling the remainder of the consignment.
By that point, Russell's office was inundated with such notices. From an initial catalog of 200 lots, only 145 actually went through the ring. Among the yearlings with stellar pedigrees that defected from the sale were champion juvenile filly Countess Diana's first foal, a colt by Victory Gallop, and a much talked-about Unbridled's Song-Roll Over Baby colt that had sold for $1.1 million as a weanling in January.
The withdrawals also irritated bidders, who called on vendors to commit high-quality stock to the July sale.
"This is an important sale that has a high-profile identity and needs to be protected, and everybody needs to put their best energies forward to do that," said California-based bloodstock agent Rollin Baugh. "I still think it can work. We certainly have enough examples that when you lead the right horse in there, there's more than sufficient money for it. I'd hate to see this sale lost."
Tale of two successes
Two consignors who had exactly what the buyers wanted were the Taylor family's Taylor Made Sales Agency and David and Ginger Mullins's Doninga Farm.
The two operations and their clients could hardly have been more different. Taylor Made cataloged 33 horses to the sale, while Doninga brought just one, its first Keeneland July yearling. But both ended up at the top of buyers' lists with yearlings by Storm Cat.
Taylor Made played a fashionable card with Hip No. 186, a colt bred by Kenny Troutt and Bill Casner's WinStar Farm that combined the most popular bloodline combination available: Storm Cat and a Mr. Prospector mare. The dark bay colt is out of Tacha, a daughter of Grade 2 winner Savannah Dancer and full sister to Sha Tha, herself the dam of a French champion.
The colt proved irresistible to O'Byrne, who got the receipt after Ferguson, shaking his head, turned his back on the bid-spotter on the final bid of $3.1 million. O'Byrne bought the colt for the partnership of Michael Tabor and Coolmore boss John Magnier. It was a prudent business move in at least one way: Coolmore owns a number of lifetime breeding rights to Storm Cat and benefits when high auction prices cause a clamor for Storm Cat seasons.
Earlier in the night, the one-horse Doninga consignment caused a stir with another Storm Cat, a racy chestnut filly out of Canadian broodmare of the year Amelia Bearheart. The filly, a half-sister to turf champion Chief Bearheart, was too much to resist for Canadian pharmaceutical executive Eugene Melnyk. Represented by veterinarian Robert McMartin, Melnyk beat back opposition from trainer D. Wayne Lukas before landing the filly for $2.8 million.
Back at Barn 23, the filly's connections popped a cork on some Moet and Chandon and clinked their Waterford glasses in a toast to the one man who had made it all possible: the late bloodstock agent Bob Falk.
Falk, who died of a heart attack five years ago, bought Amelia Bearheart for breeders Dick and Bonnie Maynard more than a decade ago. He also sold David and Ginger Mullins their farm 10 years ago.
"The omens were there," David Mullins said. "Today is the 10th anniversary of our buying the farm from Bob."
Doninga sits next to the Maynards' farm, where the Storm Cat filly was foaled last April - just missing the wave of mare reproductive loss syndrome that killed several thousand foals and fetuses starting in early May.
"We were relieved," said Dr. Steve Conboy, who oversees the Maynards' operation with farm manager Denise Dillon. "She was a nice, correct individual from the start.
"Dick has always said he'd never sell one of Amelia Bearheart's fillies. Fortunately, they've been sort of like rabbits. They've come along frequently. He's got several of them, and it came time to pay some of these significant stud fees. We always knew this one was valuable."
She also was valuable as a message that small, hands-on consignors can get a big job done, even in a market where buyers are feeling stingy. Champagne was rare around Keeneland this July, but the Maynards and the Mullinses were among those few who faced the market and came out with something to celebrate.