Friday, March 31, 2017

Barrett's March Sale -- No News Is, Well, No News

The third of the three "select" two-year-old sales, this one at Barrett's in California, is now in the books. (My comments on the previous 2017 select sales, Fasig-Tipton at Gulfstream and Ocala Breeders Sales, are here and here, respectively.) The only surprise is that there were no surprises; the Barrett's sale was a mirror image of the same auction last year.

If you look at Barrett's sales summary, it appears there were 128 horses catalogued for the sale, adding up the numbers of those sold, scratched, and who failed to meet their reserve (i.e., RNA). But the catalog itself had 135 horses listed. So let's stick with that number and adjust the other totals. (I really hate it when I have to go through the catalog page by page to do this; next time, maybe Barrett's could do some fact-checking.)

So my totals, which differ slightly from those published by Barrett's, are: 135 in the catalog, 45 (33.3%) sold, 19 (14%) RNA, and 71(53%) scratched. Using the traditional, if misleading, measure of a sale's success, only 19 (30%) of the 64 horses that actually went through the auction ring were RNAs. But what of all those other horses in the catalog? If they were scratched after traveling to the sale, that's a significant expense for their owners and consignors. Even if they were scratched earlier, at least some expense went into getting them far enough along to be in the catalog.

The median price for the horses that actually sold was $100,000, exactly the same as it has been at Barrett's March since 2015. The sale topper, by a considerable margin, was a Malibu Moon colt that was bought jointly by West Point Thoroughbreds and Spendthrift Farm for $675,000. Of the 45 horses sold, 12 of them went for more than $200,000. On the other hand, 15 sold for less than $50,000, including one of West Point's other purchases, a $35,000 colt by Creative Cause (West Point also paid $140,000 for a Jimmy Creed colt). Totally unsolicited advice for prospective West Point "investors": the $35,000 colt is the one you probably want a piece of. High-end purchases hardly ever pay back their buyers.

In addition to West Point, a couple of other public partnerships were active at the sale. My friends at Dare to Dream Stables paid $50,000 for a Smiling Tiger filly, and Eclipse Thoroughbred Partners paid $85,000 each for fillies by Animal Kingdom and Exchange Rate.The rest of us are still waiting for Ocala in April and Timonium in May.

And Art Sherman, who took a no-pedigree horse named California Chrome and did pretty well with him, went to all of $20,000 (yes, that's the right number of zeros) for a colt by Unusual Heat that's a full brother to two stakes winners and two other horses with six-figure lifetime earnings. I don't know what the physical issues were that let this horse get away so cheaply, but I'd be looking for him later this year at Art's home base, Los Alamitos.

So, what, if anything, to make of all this? The small number of horses sold, and the relatively modest median price at the Barrett's March sale make it a tough choice for consignors, mostly based in Ocala, to pay for the shipping and showing costs involved. Barrett's is already responding to consignors' worries about costs by suggesting that next year it will combine the March sale with its larger May sale (which tends to have more Cal-breds and a much lower median, around $30,000). That will ease the burden on consignors, but the auction house and the consignors will still need to figure out how to get the better horses seen by the richer buyers. After all, who would want to hang around Del Mar for a three-day sale? (Well, almost anyone, so I guess that's not such a big consideration after all.)

A more serious concern is that, for many years, Barrett's had a near-lock on Asian buyers, especially those from Japan. But those buyers, supplemented by new money from China, South Korea and Russia, now appear at all the sales. To the extent that Barrett's once had a competitive advantage in its superior access to Asian buyers, Fasig-Tipton and OBS have definitely closed the gap.

Next, we leave the "select" category and head for the big sales: OBS, April 25-28, with a catalog of 1,200 or so, and Fast-Tipton Timonium, May 22-23, with more than 500 likely in the catalog. Happy shopping!

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