WINTER MIXED SALES: HOW POLARIZATION LOOKS
Date: February 18th, 2018
This article originally appeared in BloodHorse Daily.
Polarization: it’s a word we’ve heard constantly for the last six months to describe the North American and European auction marketplace. Here is what it looks like.
Fuelled by the Grade II-winning $1.6-million filly Mrs MacDougall and a $1-million American Pharoah short yearling half-brother to top sprinter Caravaggio at Keeneland January, and 1.9-million guineas (almost $2.8-million) for the seriously promising 3-year-old colt, Willie John (Dansili) at Tattersalls, plus others from the Marcus Jooste dispersal, the five major January and February Mixed sales in Kentucky and Europe registered gains of nearly $10-million (+19%) over last year's corresponding sales. But the high prices distort the stark realities at the lower levels of the NA/EU commercial auction marketplace: for example, of the 1004 foals of 2017 (short yearlings in 2018) which have sold in all 2018 mixed sales, over 500 of them sold below the 2018 mixed sale median for 2017 foals, calculated by the Blood-Horse as $9,138 (converting the European sales to US$). The big seven-figure sales get the headlines, but more than half of the more than 1,000 foals of 2017 which have been listed sales this year did not even bring $10,000. Nobody's making money on those.
In the context of the calendar year, the five major January and February mixed sales (Keeneland January and Fasig-Tipton February in North America; Tattersalls, Goffs, and Arqana February sales in Europe) constitute less than 5% of the annual gross in the North American and European auction marketplace. But really these five sales are a continuation of what my team classifies as "second-half calendar year mixed sales" from 2017 - the same five sales companies' November and December sales, plus smaller regional mixed sales. Both sets of sales include foals of 2017 and mares in foal to 2017 coverings. My team calculates last year's NA-EU mixed sales (October-December) grossed $506-million. The five January-February mixed sales grossed $62-million, or 11% of the combined total for the mixed sales we've counted (our $62-million total does not include Barretts and OBS mixed sales in 2018). So, in the context of foals produced in 2017, and mares covered in 2017 and sold by one of the five major auction houses between October and February, these five Winter Mixed sales should be a continuation of the trends we saw in the fourth quarter of 2017, as well as being a bridge to the NA/EU 2-Year-Old sales.
Let's begin with the European sales this month: Tattersalls in Newmarket Feb 1-2, Goffs in Kildare Feb 6-8, and Arqana, in Deauville Feb 13-14. The dispersal of horses owned in partnership by Marcus Jooste dominated the two sales, Tattersalls and Arqana, in which they were entered. Seven fillies or mares at Tatts' brought more than 200,000 guineas, of which five were from the Jooste dispersal; the other two were Thetis (550,000 gns), the final filly from the Ballymacoll dispersal, and Longing (220,000 gns), from Juddmonte. The five top Jooste horses brought 3,720,000 gns, and the sale total grossed 8,037,150 gns, up 40% from last year (and almost triple the gross of two years ago, by the way). Just those five Jooste partnership horses, however, did constitute 46% of the sale's gross.
At Arqana, three horses brought €200,000 or more, two of them Jooste partnership horses. Combined, 912 horses sold in the three sales (converting Tattersalls to €) grossed €17,053,000 (a 21% gain over 2017) and averaged €18,698 (+24%). Eleven horses sold for 200,000 or more, seven of them Jooste partnership horses, which grossed €4,874,720 among them. If those hadn't been in the sales, 905 horses would have grossed €12,178,220 (down 13% from 2017) and averaged €13,456 (down 10%). There's a measurement of the impact seven top sellers can have on a market in which 912 horses have sold.
The situation in the U.S. is different in one very important respect: America is a bigger and broader marketplace. There were 2,157 horses catalogued between Keeneland January and Fasig-Tipton February, of which 1,273 sold (59%); at the three European sales there were 1,431 catalogued, and 912 sold (62%) - so there were roughly 50% more horses catalogued in Kentucky than in the three European sales combined. Whereas 11 horses brought 200+ (whichever currency) in Europe, 36 brought $200k+ at the two American sales - more than three times as many, and it would have been nine times as many without the Jooste horses.
But here's what the numbers don't broadcast, not unless you dig around and look. We asked Blood-Horse tech whiz Courtney Bearse to calculate the median price for all foals of 2017 ('short yearlings') at all 2018 sales, which was the five we've mentioned plus Barretts January and the OBS January Mixed Sale. A total of 1,430 short yearlings went through the rings at these seven sales; of those, 1,004 sold, for a total of $25,439,180 and an average of $25,337 (including the $1-million American Pharoah colt). But barely 25% of them sold above the $25,337 average, and the median, for the 1,004 short yearlings sold, was $9,138. That's 502 yearlings sold for under $9,138. Ten times as many short yearlings sold for under $9,138 as all horses - yearlings, fillies, and mares - brought 200+. Overall, the highest median for any of the five sales was Keeneland January ($12,000). Others: Fasig - $10,500; Tattersalls - 7,000 gns.; Goffs - €6,650; Arqana - €4,000. A total of 2,185 horses sold in the five sales; that means at least 1,042 of them sold for $12,000 or under.
We called this column "In My Opinion"; well, in my opinion, the results of the 2018 Winter Mixed sales make pretty uncomfortable reading and shows why, for breeders as well as for racehorse owners, you need to hit home runs to survive.