by Joe Nevills | 09.23.2018
There was plenty to be excited about in advance of this year’s Keeneland September Yearling Sale, but it was the surprises that helped propel the bellwether auction from a strong edition into the kind not seen since the economic crash of the mid-2000s.
A combination of factors – from a favorable economic climate, to the first crop from a Triple Crown winner, to a somewhat unexpected appearance from Sheikh Mohammed bin Rashid Al Maktoum of the Godolphin operation – came together to produce one of the strongest renewals of the Keeneland September sale in its history. At the end of 13 sessions, the auction finished with a record average sale price, the second-highest all-time median price, and the fourth-highest gross.
A total of 2,916 yearlings changed hands at this year’s sale for $377,130,400, up 23 percent from last year’s 12-day auction, when 2,555 horses brought $307,845,400. The gross surpassed last year’s final total during the seventh session, and it finished as the highest since 2007, the last full sale before the market crash, when 5,553 horses sold for $385,018,600.
The average sale price settled at a record $129,331, up seven percent from $120,487 in 2017, and surpassing the previous record of $112,427 set in 2006. The median was down 12 percent to $50,000 from a record $57,000, but it entered a four-way tie for the second-highest ever, joining a three-sale run from 2013 to 2015. The final buyback rate of 24 percent marked a small improvement from 25 percent last year.
At the top of the market, 27 horses sold for seven figures, more than the last two Keeneland September sales combined, and the most since 2007. It was the fifth-most horses sold for $1 million or more in the sale’s history.
“I think the gross is so high because the top end is as strong as it’s ever been,” said consignor Scott Mallory. “You start adding million-dollar horses on there, it gets the gross up pretty quick. I think there’s a shortage of good horses. I hear trainers tell us all the time there’s a shortage of good horses.”
While there are plenty of pieces that go into making a sale of this caliber, Keeneland’s director of sales operations Geoffrey Russell said none of the figures would have been possible if the quality of horseflesh in the ring did not match the demand.
“It has to be the horse, and this is what we come back to,” Russell said. “This is a very good crop of horses. Yes, all the other external factors of depreciation, new tax laws, stock market, all the other factors, have helped raise the bar, but If those horses aren’t top quality, they’re not going to give you extra money just because they have it in their pockets. The credit goes to the breeders and consignors that have had an exceptional crop this year.”
Suzi Shoemaker of Lantern Hill Farm put more stock in the economy’s effect on buyer activity – particularly the Tax Cuts and Jobs Act of 2017, which dramatically increased the tax benefits for yearling buyers. However, Shoemaker also noted that the sport’s efforts to shine up its image could be slowly reaching the people with money to spend.
“I think the tax cuts have had a huge effect on everyone’s emotional landscape,” she said. “People just feel like they can have some fun with their money. A lot of these people have corporations or big businesses and I feel like they can use their cash for more discretionary items like racehorses.
“We’ve made a lot of progress in our industry with bringing people in, and taking care of our racehorses when their careers are over,” Shoemaker continued. “Drugs are still a problem, but I think it’s being addressed. My feeling is we’re moving forward on these things. Yes, I know we still have a lot of problems, but I think we’re addressing them and we’ve got a solid core of people. We may or may not be growing it, but we’re keeping who we’ve got.”
Sheikh Mohammed Ups The Ante
The story of the 2018 Keeneland September sale, and especially its select Book 1, cannot be told without making reference to the presence of Sheikh Mohammed, who appeared at the sale in person for the first time in several years.
With the head of the operation in attendance, Godolphin more than doubled its spending at the September sale, going from 17 purchases totaling $8,065,000 last year to 27 yearlings for $19,960,000. It was the biggest performance by a single buying entity since 2006, when Godolphin landed 34 horses for $59,945,000 including the $11.7-million Meydan City, whose sale price is still the highest ever for a yearling at auction.
The operation of Sheikh Mohammed signed tickets under the name of both Godolphin and Godolphin Japan, shoehorning certain horses for his Asian interests.
Sheikh Mohammed’s arrival was a welcome surprise for the Keeneland staff. The ruler of Dubai also spent time looking over his horses at his U.S. base of operations at the former Jonabell Farm in Lexington, Ky., and he left the sale to attend the World Equestrian Games in Tryon, N.C.
“You never know,” said Bob Elliston, Keeneland’s vice president of racing and sales. “ Every year, we hope, and every year I think there’s probably hope on their end that he’s coming as well, but things get in the way. As soon as we see that big plane with that flag on the tail, we know then.”
While Sheikh Mohammed was gone by the sale’s traditional “dark day” on the first Friday of selling, Airdrie Stud general manager Ben Henley speculated that his strong buying had a ripple effect on the sessions that followed.
“People are getting outbid on those horses early and getting pushed back a book,” Henley said. “It kind of keeps happing all way down and it’s a domino effect on the whole marketplace.”
With the figures reaching heights not seen since the mid-2000s, Sheikh Mohammed’s presence also brought with it the return of the classic bidding slugfests between Godolphin and the Coolmore partnership. Though the prices did not reach the delirious heights they did in the previous decade, the competition was fierce between the two entities.
Godolphin accounted for seven of the auction’s million-dollar horses, while Coolmore took home a trio of seven-figure yearlings, including the sale-topper.
Coolmore’s reverence to Claiborne Farm sire War Front continued to be on display at the September sale when it landed Hip 458, a $2.4-million colt out of the Grade 1-winning Smart Strike mare Streaming. The colt’s third dam is Broodmare of the Year Better Than Honour, putting him in the family of champion Rags to Riches, Belmont Stakes winner Jazil, and Breeders’ Cup Marathon winner Man of Iron, among others.
Hill ‘n’ Dale Sales Agency consigned the colt, as agent.
New Catalog Format Draws Mixed Reviews
For the third straight year, the Keeneland September sale introduced a new format for the first week of its sale. After last year’s renewal started with a single ultra-select Book 1 and finished the week with three sessions of Book 2, the 2018 edition expanded Book 1 into four sessions and pushed Book 2 into the weekend.
Elliston said the quality of this year’s total catalog had a strong influence in blowing out the first book. Horses were spread out to nearly every barn from one to 49 on the Keeneland backstretch for Book 1, which was designed to give each horse space to properly show themselves without being too crowded.
Any logistical issues that might have stemmed from the spread-out nature of the Book 1 horses were inadvertently quelled when washout rains on the Sunday before the opening session led Keeneland officials to delay the start times for all four Book 1 sessions by two hours, giving prospective buyers an extra eight hours to inspect the horses.
“Every year, the inspection team looks at the depth of the crop that’s there, and we tailor it to that,” Elliston said. “People make a lot of the format, but really, we’re the only ones that have to deal with format because we’re the only people that sell the numbers that we do. That’s a responsibility that we take very seriously, to create an environment conducive to buyers and sellers getting the most they can.”
While the high returns are hard to deny, expanding the Book 1 offerings did create a tough draw for some horses that might have been placed in Book 2 in prior catalog configurations. Instead of benefitting from a “big fish, small pond” effect, some sellers were concerned their horses at the level below the very elite might have gotten lost in the shuffle while more suitable buyers waited until the later sessions to arrive at the ale.
“It’s going to be hard for them to adjust the format when the sale’s been so high, but it’s been kind of tough on the consignments,” Mallory said. “I had some in Book 1 where I sold horses in Book 2 that weren’t nearly as good for a lot more money just because of the way the format was. They’ll work it out, though. It’s hard to please everybody, and when you’re trying to get 4,500 head through the sale, you’re not going to get everything where it needs to be.”
The first week of the sale might have had some placement casualties, but sellers were generally pleased with how their slots shook out in the middle sessions. Shopping activity, both in terms of inspecting horses and buying them, remained robust well into the later books.
“Most of these horses that we have here, the consignors are so on top of it, on top of knowing what we have and where they belong,” said Carrie Brogden of Select Sales. “Placement is incredible to me. Too far early can really hurt you, but too far back, they can still find you.”
Uncle Mo, War Front, American Pharoah Drive Sire Power
Uncle Mo, a resident of Ashford Stud, led all sires by gross for the first time, with 65 yearlings sold for $22,392,000. It was the highest gross produced by a sire at a Keeneland September sale since Storm Cat put 24 through the ring for $30,485,000 in 2006.
The top sire by average sale price was War Front, whose 18 horses sold brought an average of $782,500. It was War Front’s second time leading the sale, after achieving the same feat in 2015.
As expected, the auction was a coming out party for Triple Crown winner American Pharoah, whose first yearlings had a big impact on the final figures. In total, the member of the Ashford Stud roster had 47 yearlings sell for a combined $19,585,000 (third-highest) and an average of $416,702 (fifth-highest among those with three or more sold).
American Pharoah finished with three horses past the seven-figure mark, led by the auction’s second-highest price, Hip 91, a $2.2-million colt out of the Grade 2-placed stakes-winning Indian Charlie mare Kindle, who sold to the Godolphin operation. Woods Edge Farm consigned the colt, as agent.
To view the sale’s full results, click here.