Keeneland November sale shows promise despite numbers

LEXINGTON, Ky. - The Keeneland November breeding stock sale concluded its nearly two-week run Friday afternoon with declines in key economic indicators compared to its 2017 edition - but those declines don't tell the whole story.

One decade after the recession that rocked the Thoroughbred industry, the mixed auction showed signs of a buoyant middle market, and the robust demand for broodmares and weanlings by major operations, representing long-term investments, indicated optimism for the health of the industry in the near future.

"We are seeing people buying in, and buying more mares, but again, it's back to the perceived quality," Keeneland's director of sales Geoffrey Russell said.

"Everyone is looking for that certain type of weanling or certain type of mare. Everyone is talking about 'the Saturday horse.' They're looking for the producer of the Saturday horse. They're cutting down their numbers, but they're increasing their quality."

The 12-day Keeneland auction finished with 2,538 horses sold for gross receipts of $188,508,300, led by the popular champion Lady Eli, who sold for $4.2 million. The revenues were down 7 percent from last year's figure of $202,021,700 from 2,424 horses sold.

This year's cumulative average closed at $74,274, down 11 percent from $83,342 in 2017. The median finished with an 18 percent decline to $25,000. Last year's median checked in at $30,500, the third-highest in this auction's history.

While the sale's overall average price closed down, the figures in the upper to middle markets showed gains compared to the similar portions of the 2017 sale. The average price for the single-session Book 1 finished at $470,242, a 13 percent gain compared to $417,891 for the two-session Book 1 of 2017.

The two sessions of Book 2 averaged $151,684, compared to $130,939, a 16 percent spike, and Book 3 averaged $62,878, compared to $58,989, rising 7 percent.

The cumulative buyback rate finished at 27 percent, compared to 25 percent in 2017. The buyback rate was steady compared to last year's sale at an even 24 percent, until coming to the lower-end Book 7 market in the final two days of the sale, when it rose.

"I think it is, in many respects, a continuation of what last year's November sale looked like," Bob Elliston, Keeneland's vice president of racing and sales, said.

"We had fewer big ones up front, and so we're gonna end up a little bit off in terms of gross sales. But when you look past that Book 1 number, generally, it's been very much like November of 2018. Our clearance rates are almost identical. I think you'll see the average and median down a little bit, and that's because we sold more horses, but they're in [the second] week. So that'll probably take the numbers down a little bit, but we're very pleased with the strength of the broodmare market, the appetite for these American-bred horses, domestically and internationally."

The Keeneland sale was climbing an uphill battle before horses even came to the ring because of a high number of pre-sale withdrawals. Eighty-one horses were withdrawn from Book 1, representing 32 percent of that session’s catalog. A total of 202 horses scratched from the following two days of the sale, representing 24 percent of Book 2.

Part of those figures is due to the unpredictable nature of selling mares still actively racing. For example, unbeaten Grade 1 winner Dream Tree was expected to be one of the standout offerings of Book 1, but was withdrawn after coming out of what would have been her final work for the Breeders' Cup Filly and Mare Sprint with an entrapped epiglottis that required surgical correction. She will remain in training for her current owners in 2019.

Keeneland may also have been a victim of its own success with the September yearling sale, which finished with a record average, the fourth-highest gross in its history, and a median tied for second-best all-time.

"It cuts both ways," Elliston said. "If you're in both segments of the market, if you're selling yearlings, and then you've got breeding stock, oftentimes, if you do exceptionally well, it gives you the latitude or discretion to say, maybe I'm gonna hang on to that weanling or that mare, I don't have to have these resources [from a sale] to fund the operation."

At the top of the market, eight horses sold for seven figures, led by Eclipse Award champion Lady Eli, who captivated the racing world with her firey personality and her triumph over laminitis to return to racing at the top level. After bringing the hammer down for $4.2 million during the Book 1 session on Nov. 5, the 6-year-old daughter of Divine Park headed home to Hill 'n' Dale Farm, which is familiar territory.

Hill 'n' Dale has been boarding Lady Eli for the last year, since her retirement from the racetrack following the 2017 Breeders' Cup, and consigned her on behalf of the Sheep Pond Partners of Jay Hanley and Sol Kumin, who do not have a breeding operation. Hill 'n' Dale's John Sikura ultimately decided to add Lady Eli to his broodmare band. She is carrying her first foal, which is believed to be a colt, to the cover of successful international sire War Front.

"We're thrilled to add her to our broodmare band," Sikura said. "We try to keep adding elite-quality mares and keep upping the competition and looking to the future, and she's a mare who really is everything that one could ask for. Courage, heart, class, ability, physicality, in foal to a great horse, carrying a colt. It's a lot of money for a horse, but it's extremely good value, and we're thrilled to own her."

Lady Eli won the first six starts of her career, including the 2014 Breeders’ Cup Juvenile Fillies Turf and 2015 Belmont Oaks. But heading back to the barn after the latter race, she sustained a hoof injury that developed into laminitis. Lady Eli successfully beat back that dreaded disease and returned to the races 14 months later, winning the Grade 1 Flower Bowl Invitational and finishing a narrow second in the Breeders’ Cup Filly and Mare Turf in a brief 2016 campaign. The following season, she captured three graded stakes, including the Grade 1 Gamely and Grade 1 Diana.

However, in the 2017 Breeders’ Cup Filly and Mare Turf, which was scheduled to be her final start, she endured a rough break from the starting gate and sustained lacerations to her hind legs early in the race, losing a shoe and eventually finishing seventh, the only unplaced effort of her career. Ultimately, she finished her career with a record of 10-3-0 from 14 starts, earnings of more than $2.9 million, and the 2017 divisional Eclipse Award.

“I can’t say enough about this horse,” said Chad Brown, who trained Lady Eli throughout her career. “She is the best turf horse I have ever trained. She has the heart of a champion. She is equine perfection. She is the personification of world-class talent, courage, precocity, soundness, and, above all, the will to win. Lady Eli always brought her best game. She didn’t need a racetrack, a condition, a position in the race, or a distance, and she certainly never needed an excuse. It’s unlikely I will ever have another one like her.”

Lady Eli is out of the winning Saint Ballado mare Sacre Coeur, making her a half-sister to multiple Grade 3 winner Bizzy Caroline.

Later in Book 1, bloodstock agent Steven Young, bidding on behalf of an undisclosed client, went to $4 million for My Miss Sophia, who was consigned as agent by Lane's End. The Unbridled's Song mare was consigned carrying her second foal, also to the cover of War Front.

Young said his familiarity with My Miss Sophia, as well as her Grade 1-winning half-brother Materiality, helped encourage him to pull the trigger on this high-ticket purchase.

"I was around her through most of her career," Young said. "She ran second in the Kentucky Oaks, and two weeks later I bought Materiality in Maryland [at the Fasig-Tipton Midlantic sale of 2-year-olds in training]. I didn't buy him because of her, but she emboldened us to buy him."

My Miss Sophia won the Grade 2 Gazelle Stakes in the spring of her 3-year-old year, and finished second to champion Untapable in the Kentucky Oaks several weeks later. Later in her career, she moved to the turf, and was multiple graded-stakes placed, including a third in the Grade 1 First Lady Stakes behind champion Tepin.

My Miss Sophia is out of the Grade 2-placed stakes winner Wildwood Flower, making her a half-sister to Materiality, winner of the Florida Derby. Wildwood Flower is a half-sister to several stakes horses, including Expanse, the dam of Grade 1 winners Afleet Express and Embellish the Lace.

The other mares sold for seven figures were $2.2 million Tiffany's Honour to Katsumi Yoshida, $1.75 million Key To My Heart for Summer Wind Farm, $1.5 million Stays in Vegas to Claiborne Farm, $1.25 million Zipessa to Shadai Farm, $1.125 million Pretty Perfect to Town and Country Farm, and $1 million Galileo's Song to Shimokobe Farm. International powerhouse Galileo enjoyed a stellar run at the top of the market, as Key To My Heart, Pretty Perfect, and Galileo's Song are all by the Coolmore sire. Stays in Vegas and Zipessa are both by the late City Zip.

Like Lady Eli and My Miss Sophia, Key To My Heart, Stays In Vegas, and Pretty Perfect were all offered in foal to War Front, who finished as Keeneland November's leading covering sire by gross after leading the stallion standings at Keeneland September. The Claiborne Farm stallion finished with six mares in foal sold for $13,025,000, an average of $2,170,883. Tiffany's Honour and Zipessa were both offered in foal to Medaglia d'Oro, continuing the Darley stallion's solid commercial season.

The top first-year covering sire by gross was Claiborne's Mastery, with 27 mares in foal sold for a total of $4.8 million. Leading the group by average was Juddmonte's champion Arrogate, with seven mares in foal averaging $366,429. Horse of the Year Gun Runner followed him, with his seven mares averaging $310,000.

The two highest-priced weanlings of Keeneland November were both fillies by Gainesway's perennial leading sire Tapit.

Mandy Pope's Whisper Hill Farm and Three Chimneys Farm partnered on an $800,000 filly out of champion female sprinter La Verdad. The New York-bred filly was consigned by Eaton Sales, as agent.

La Verdad, a Yes It's True mare, earned more than $1.5 million. She won 11 stakes, highlighted by two wins in the Grade 2 Distaff Handicap, a win in the Grade 2 Gallant Bloom, and the Grade 3 Vagrancy Handicap. She is a half-sister to Grade 3 winner Hot City Girl.

A Tapit filly who is a half-sister to Arrogate lit up the bid board at $750,000. The filly was consigned by Hill 'n' Dale, which co-owns her dam, Bubbler, with Clearsky Farm, which bred Arrogate. Clearsky bought out its original partners in this filly via the auction ring, along with Rac 04 Racing.

Bubbler, a Grade 3-placed stakes winner by Distorted Humor, is also the dam of Osare, winner of the Dueling Grounds Oaks at Kentucky Downs this year. Bubbler is a half-sister to stakes winner Unbridled Femme, and their granddam is Eclipse Award champion Meadow Star. It is the family of multiple Grade 1 winner Belle Gallantey.

In both cases, the weanlings were purchased by 'end users,' or those who intend to follow through on their racing and potentially breeding careers, as opposed to pinhookers.

"It seems like the weanling trade is very strong," WinStar Farm executive Elliott Walden said. "I've seen a lot of trainers looking at weanlings, which is a little unusual - Todd Pletcher, Chad Brown. It's very competitive."

The competitive weanling market led to some frustration for pinhookers.

"A lot of times, [the weanling market leaders are] the pinhookers, looking to be able to turn them back in September," Elliston said. "But we're seeing a lot of end users buying weanlings, because they probably understand how hard they are to get bought in the September market. So they're trying to get in here."

Among first-crop weanling sires, champion sprinter Runhappy, standing at Claiborne, led his class by gross, with 14 weanlings sold for $2.095 million. Champion and Kentucky Derby winner Nyquist, who stands at Darley, led the group by average. His three weanlings, led by a $600,000 filly, averaged $335,000. Two-time Horse of the Year and Taylor Made stallion California Chrome finished with an average of $109,500 from six sold.

Beyond the mares and weanlings traditionally offered at mixed auctions, a major component of Keeneland November's market has become its horses-of-racing-age section. The second week of the sale features a selection of racing prospects, racing or stallion prospects, and even active stallions. The market has grown in prominence as a source of talent, with recent graduates including Grade 1 winners Diversify and Long On Value. The stallion prospects provide regional markets, as well as international markets, an opportunity to improve their stock.

"It does give the sale a boost, as the quality changes," Russell said. "The second week, the quality of mares does drop off a little bit, so it's nice to have these horses of racing age to raise everything up."

Federal Case, a debut winner last month, sold for $650,000 to power this year's offerings in the category. Bloodstock agent Jacob West landed the 2-year-old Gemologist colt on behalf of owners Robert and Lawana Low.

Federal Case was consigned by WinStar Farm, which had purchased him, in partnership with China Horse Club and SF Racing, as a Keeneland September yearling. The colt won his debut by a half-length on Oct. 19 at Keeneland for trainer Rodolphe Brisset, and has breezed twice at Keeneland since then.

“It was hard to part with him because he won so well first time out, but all the smart guys were on him,” Walden said. “We put him in this sale in August. We hate scratching horses, so we felt like we should bring him."

West said the colt will transfer to trainer Todd Pletcher to continue his career.

“You’ve gotta tip your cap to WinStar because they brought a horse here to sell that obviously has ability and talent,” West said. “When everybody got to see him, they all started dreaming of the first Saturday in May – that’s what he reminded us of. Mr. and Mrs. Low obviously have a history with Todd, winning the Arkansas Derby with Magnum Moon. We hope we just bought the Arkansas Derby winner.”

Federal Case is out of the winning Elusive Quality mare Delilahjane, a half-sister to Grade 1-placed Fast Falcon. It is the immediate family of Grade 1 winner Pool Land, and other prominent performers appearing on the catalog page include Breeders' Cup Sprint winner Very Subtle.

Perennial leading consignor Taylor Made Sales again led all Keeneland November consignors by gross sales, with 258 horses sold for $23,958,400. Among consignors with three or more horses sold, New York-based Sequel Bloodstock led the way by average, at $262,500.

Bloodstock agent Young's purchase of My Miss Sophia helped make him the auction's leading buyer by gross, as he finished with six horses purchased for $4,985,000. Among buyers who landed three or more horses, Yoshida led the way, as his four purchases at the top of the market averaged $1,118,750.

For hip-by-hip results from Keeneland November, sorted by session, click here:
http://flex.keeneland.com/summaries/summaries.html