Thursday, March 2, 2017

The Gulfstream 2YO Sale: What Does It Mean?

The first of this year’s two-year-old sales, the Fasig-Tipton Florida sale at Gulfstream, is in the books. Do the results tell us anything about the state of the overall thoroughbred market? (For complete results of the sale, see here; for a thoroughgoing report, focusing on the top sellers, see here.)

First, the aggregate results. From a slightly expanded catalog of 162 horses, 74 (45.7%) were reported as sold, including one RNA that was sold before leaving the sales grounds. Although there were only 13 RNAs (horses that failed to meet their sellers’ reserves), or 14.9% of all the horses that actually went through the ring, there were a very high number of scratches, many of them at the last minute as the shape of the sale became apparent. In all, 75 of the 162 horses were scratched (46.3% of the catalog).

Looked at as a whole, the sale was broadly consistent with the pattern of the last two years. The 45.7% “clearance rate,” or horses sold as a percentage of the total catalog, fits in between the 42.9% sold last year and 50.9% in 2015, when the sale recovered from a disastrous 2014 that sold less than 30% of its catalog. And yesterday’s median price, $270,000, represents an increase from the $250,000 recorded last year.

The sale was given a lift, as often happens, by a new buyer with deep pockets. Boston investor Lawrence Best, who makes his money running an investment fund (he was previously CFO of Boston Scientific) just started in racing at least year’s yearling sales and added to his very select stable yesterday with the sale topper, paying $1.5 million for an Uncle Mo filly that consigner Cary Frommer had bought as a yearling for $250,000. Frommer also had a million-dollar horse in last year’s Gulfstream sale. Not bad for a woman in what’s generally seen as a man’s business.

Buyer Best, who debuted with a $750,000 purchase at Keeneland September last year, gave Frommer another million-dollar sale when he stuck around to the end of the sale and went to $1.1 million for Hip 156, a More Than Ready colt from a War Front mare with a stakes-laden pedigree. That’s a lot of money to spend for a buyer who appeared to be working alone, without a well-known trainer or bloodstock agent, although he did have a vet review his choices.

More accustomed to spending big bucks were the usual suspects of Coolmore and Sheikh Mohammed, each of which bought two horses at the sale. Coolmore, of $16 million The Green Monkey fame, went to $1.45 million for a Bernardini colt out of the family of the wonderful mare Personal Ensign. It also spent $700,000 for a Pioneer of the Nile colt out of the stakes-winning Storm Cat mare Katz Me If You Can. Both purchases reflect Coolmore’s ongoing and successful strategy – buy a bunch of well pedigreed colts and hope one or two a year turn into successful stallions.

Sheikh Mohammed’s Goldolphin operation, through its usual agent John Ferguson, was less extravagant, paying $550,000 for Hip 54, an Exchange Rate colt whose family includes perennial New York favorite Boom Towner, winner of 29 races over a career that lasted until he was 10 years old. Ferguson also made the winning bid of $335,000 on Hip 133, an Eskendereya colt out of an unraced Pulpit mare. It looks like both Coolmore and the Godolphin team have learned the lesson of The Green Monkey – don’t spend $16 million for a horse that runs fast in a rotary gallop. In fact, at this year’s sale, Hip 35, a Spring At Last colt that had the co-fastest work of the sale, a furlong in 10.0 seconds, looked to me to be in a rotary gallop most of the way and sold for a “mere” $100,000. Lesson learned; no matter how fast a horse goes in a rotary gallop, that won’t be sustainable over racing distances.

The well-known racing partnerships were relatively quiet at the Gulfstream sale. The principal exception: West Point Thoroughbreds bought two for $300,000 each, Hip 62, a Broken Vow filly, and Hip 65, an Animal Kingdom colt from the family of Canadian horse of the Year Peaks and Valleys. At West Point's usual mark-up of 150%, that means a 10% share of either of those will be on offer for a mere $75,000. Also of note, frequent West Point co-owner Vinnie Viola, who recently dropped out of consideration for Secretary of the Army, returned to the sales when his St. Elias Stable bought Hip 103, an Irish-bred Declaration of War colt from a successful European family, for only $200,000. To me, it looked like this colt was the best turf prospect in the sale, and, by high-end-sales standards, a bargain.

So, to sum up: stiff competition, though not insane, for the best of the catalog, and not much demand if there was anything at all wrong, whether in the horse’s breeze or in the vet reports. For the third year in a row, only half the catalog, or less, actually sold. A few home runs and a lot of strikeouts.

Does the Gulfstream sale portend anything for the rest of the 2YO sale season? Probably not much. The upcoming OBS sales in Ocala and the Fasig-Tipton Timonium sale are all much bigger, and we can expect that the scratch rate will be lower, as sellers get closer to the point where a failure to sell means they have to take the horse home and keep feeding it. We’ll see a better test of the market at the upcoming OBS March sale, where 677 horses are in the catalog, not all of them superstars.

No comments: