Tag: Cormac Breathnach

The Keeneland September Yearling Sale, launched last week with a Bluegrass band, mimosas, and a boutique Book 1 section, continued its momentum straight through to the end of its 11th session, concluding with a sales record average, median and buy-back rate. The gross, which was over $300,000,000 for three straight years before falling to $248,978,700 during the pre-vaccination pandemic in 2020, rebounded to $352,823,000 by the time the last hip went through the ring Friday evening. It was the auction's sixth highest gross in history.

“The hope was that we would return to previous levels, essentially like last year never happened,” said Keeneland director of sales operations Cormac Breathnach. “Last year was a good sale for the time we were living in, but this year is a massive return to a vibrant market.”

The sale average of $132,045 was up 30% from the 2020 figure and bettered the previous mark of $129,331 set in 2018. The median of $65,000 was up 75.68% from a year ago and broke the previous record figure of $57,000 set in 2017.

“If you look at the median, the median is just consistently very strong, which is an important indicator for the health of the market in general,” said Keeneland's vice president of sales Tony Lacy. “It's not crazy spikes where we are getting one horse selling for multiple millions and every other horse selling for below that. The median is the most important number for us as we look at the health of the industry.”

The record clearance rate of 19.01% improved on the figure of 19.2% set in 2012 and far surpassed the 2020 figure of 29.29%.

“When we see the clearance rate the way it is–we are breaking records almost on a daily basis for the number of horses sold through the ring–I think it was 325 sold through the ring Wednesday. That's just a remarkable number,” said Lacy. “The clearance rate is a very clear indicator of the strength of where we are at.”

Fueled by colt-buying partnerships, the September sale returned to its pre-pandemic levels, surpassing its total 12-session 2020 gross after just six of 11 sessions this year.

The New York-based partnership of Mike Repole and Vinnie Viola, represented by bloodstock agent Jacob West, led all buyers with 43 yearlings purchased for $16,045,000 and was followed by the Southern California-based team of SF Bloodstock, Starlight Racing and Madaket Stables, represented by Donato Lanni, which purchased 24 head for $10,590,000. Also making a big impact on the result sheets was the BSW/Crow Colts Group, which purchased 20 yearlings for $6,805,000.

West Point Thoroughbreds partnered up to purchase the auction's top three lots, teaming with Woodford Racing and Mike Talla to acquire the sale-topping $1.7-million son of City of Light; with Woodford Racing on a $1.6-million son of Quality Road; and with Talla on a $1.55-million colt by Triple Crown winner Justify.

Through various partnerships, West Point purchased 25 yearlings for $11,315,000.

Partnerships to the Fore

Sheikh Mohammed's Godolphin operation and the Shadwell Estate Company of his late brother Sheikh Hamdan were the leading buyers at both the 2018 and 2019 auctions, but with those entities largely absent the last two years, American-based partnerships have filled the gap.

In 2019, Godolphin purchased 10 yearlings for $16 million and Shadwell purchased 18 head for $11,070,000. With Godolphin not appearing on the results sheets and Shadwell coming in as the fourth-leading buyer in 2020, the SF Bloodstock/SF/Madaket partnership led the standings a year ago with 28 bought for $11,250,000, while Repole and Viola were the auction's second-leading buyer with 15 purchased for $6,380,000.

The Repole/Viola axis came out on top in 2021, purchasing 43 yearlings for $16,045,000.

“We didn't necessarily have a plan in a sense of price ranges or numbers outside of just a certain type of horse we wanted to buy,” bloodstock agent Jacob West said. “The idea was just to buy as many two-turn Classic-distance type horses as we could. And I think that's pretty evident in the results when you go through and look at what we bought. There were a handful of horses, we bought one Karakontie colt and a couple of other ones and those were just athletes that we liked and we ran by Vinnie and Mike and they got on board with them. But the majority of the horses we bought were two-turn dirt horses, hopefully.”

Of the group's total haul from the September sale, West admitted, “I think if you held a gun to Mike and Vinnie's heads early on and asked if they were going to buy 43 horses, I don't think they would have said yes. But we never discussed a number and we never discussed a budget, to be quite honest. I know that doesn't make for good reading material, but we just went in there with the idea of trying to identify the best horses we could and secure the best horses we could.”

As partnerships among top buyers began to grow several years ago, there appeared to be some concern that the teaming up of people who had previously competed against each other in the sales pavilion would keep prices down, but as more and more partnerships form, the opposite seems to be happening.

“I think now you are seeing more and more partnerships all targeting the same thing,” West said. “And with the demand up for those horses, the prices in turn go up. And then there is a trickle down effect because that gives other people that wouldn't be targeting those horses the opportunity to buy horses that we may have passed on for whatever reason. It's kind of one of those rising tides rise all boats theory. When there are guys willing to spend more money, I think it opens up more opportunities for buyers.”

Consignor Peter O'Callaghan of Woods Edge Farm agreed the proliferation of partnerships was a plus for sellers.

“There is a lot of money pooling together in different groups and they are bidding for the good horses,” O'Callaghan said. “I think there is no question that they are helping now. There was a period where you felt like they were teaming up a bit, but I think there is a depth of partnerships now. Different money is pooling together in different groups and they are all bidding against each other. It's a new sort of competition. Long may it continue and I hope they all have success.”

Of the impact that partnerships had on the sale results, Keeneland's vice president of sales Tony Lacy said, “They are extremely important. I know that Jacob West is buying into Book 4 for the same partnership and Donato is doing the same thing. It's a recognition that people want nice horses and they are supporting every level of the market. And I think that's very encouraging. I think as you look, it's great what you find from syndicates like MyRacehorse all the way through to a partnership of two people. I think you see that the spreading of risk, but buying a large number of horses is incredibly healthy. And it allows people to have fun in a way that is probably more affordable and more viable for the long-term health of our industry. I would love to see more of it because the more people who get involved, the more fans, the more followers, that organically creates a fan base. And if we can encourage and incentivize more people to get involved that way, I think it's also an incubator for people who want to do it for themselves. I applaud it and welcome it strongly.”

A Little Less Top Heavy

There were 15 seven-figure yearlings sold at the 2021 September sale–led by a $1.7-million son of City of Light– matching the number from the 2020 sale which was topped by a $2-million colt by Tapit. In 2019, 22 yearlings sold for a million dollars or more, with seven over $2 million, including an $8.2-million filly and a $4.1-million colt.

With major buyers from years past on the sidelines, the top of the market may have been a little less top, but that may make for a healthier marketplace, according to Keeneland's director of sales operatioins Cormac Breathnach.

“We view that as a positive, to be honest,” Breathnach said of his view of the top of the market. “For some years, the middle was suffering, but the upper market, the top 1% or 2% of horses were selling well. So averages looked good, but sometimes the median suffered and the RNA rates were higher. The spread of that equity and that response to the horses the breeders are supplying us with is very strong. It's very positive for the market and for the players in the industry that are hopefully getting a good pay day here at the sales. So I think, as much as we would like to see the continued participation in the multi-million dollar level–there is nothing wrong with that at all–but it's probably more valuable to have the really healthy middle market with plenty of million-dollar horses up top.”

Consignors found plenty of strength in the middle market, which many had found soft in years past.

“I thought [the sale] would pick up steam as the books went, and it did,” said Gainesway's Brian Graves. “The middle market has been the strongest part of the market for horses all year long, and [the September Sale] just proved that there's a lot of people in the middle. There's a good stable, solid domestic market out there right now, and that's good for all of us.”

While the cumulative buy-back rate for the entire auction was a sparkling 19.01%, the Book 1 buy-back rate was 34.2%.

That figure wasn't a concern for Keeneland's Tony Lacy, who attributed it to high-end breeders who were happy to race their yearlings.

“If you look at Book 1 and 2, a lot of people were very active in there,” Lacy said. “If you speak to the vets, the vets have never been busier. I spoke to one vet who vetted almost every horse in Book 1 just for clients that he had. I think you'll find that some people who were selling were protecting their horses quite heavily and that was their right. That they are wanting to race if they don't get a certain valuation is showing the strength of the support and belief they have in their horse.

Lacy continued, “If you look at the median and averages for Book 1, it's pretty much double Book 2. So the quality was there–there were certainly a number of outs that were never on the grounds for whatever reason. I think we have to look at it in a more holistic way rather than just the final number. Because I think you'll find there is more to the story when you have buyers who are very diligent in their selection process. And it's not just a raw figure, 'Well, they didn't like them.' I think every horse got heavy traffic and was strongly considered. I think we want to try to build the market for horses in that price range. I think as you get some of those partnerships coming together, you want to build that model for a greater number of horses at that price level.”

Buy-Back Rate a Positive

The back walking ring at Keeneland remained crowded right to the end of the 11th session Friday and trade was conducted at record levels. At the close of business, the buy-back rate was just 19.01%, bettering the previous mark of 19.2% set in 2012. It was 29.29% in 2020 and 24.24% in 2019.

Records were twice set for number of horses sold through the ring during a single session: 319 in session seven followed by 325 in session nine.

“I think that the biggest positive along the lines of maybe being a surprise is the clearance rate,” Keeneland's Cormac Breathnach said Thursday. “The clearance rate is outstanding. We are running at 8% or 9% buy-backs the last two days. That's rare in any market. There are a lot of happy sellers and happy breeders out there and that's a great sign for the industry.”

He continued, “And overall, the post-sale RNA market is extremely strong. We have about 110 published RNAs to sale already, but there are others that didn't get in the published results, so we have a very strong market in the RNA to sale area as well. And that's going to continue. It's only going to grow in the next day or so.”

Economics Make Sense for End-Users

Strong purse structures across the country, plus racing's increased exposure to new players, created a September buying bench dominated by domestic end-users.

“One of the most encouraging things from the sale has been the activity of domestic end-users and for a very long time that has been something that we wanted more of,” Keeneland's Cormac Breathnach said. “With purses being up, the energy around the sport and increased exposure at a time when other sports were shut down feels like it is paying off in a tangible way here at the sales. There was a lot of new money. The sale itself has been so strong despite the lack of participation from some very wealthy supporters in years past. So that has been very encouraging. The international market is not taken lightly and it's really stepped up, but the domestic end-users market I think is what pushed a lot of the buyers back in the later books.”

The 2021 results reflected a shift in the economics of the industry, according to bloodstock agent Jacob West.

“I think the economics of horse racing have changed in the favor of horse ownership,” West said. “We have four or five tracks that are running maiden special weights for $100,000 or more. I think we are second to Australia in million-dollar races here in America. We trump everything that is overseas outside of Australia. They can't even compete with us. Their maidens are like £10,000. They are nowhere near where we are here even at some of our lower level tracks. The prize money that is on offer in the United States is very strong right now and we just have to keep that going. If we can keep that going then more people will be willing to spend.

West continued, “There is another factor, too. Though there is a reducing foal crop year after year, there is still an appetite for horse racing. And supply and demand and availability comes into play. Fewer horses but higher demand equals higher prices.”

Racing is reaping the benefits of increased exposure during the pandemic, according to consignor Peter O'Callaghan.

“Horse racing did a great job managing COVID and staying going through COVID,” O'Callaghan said. “I think we captured a lot of new fans there with the FOX coverage, which has been great, and exposing us to a much greater audience and helping bring in new people and new money. And then betting handle is through the roof everywhere. Purse money is getting better and better and it's exploding. And we are seeing the effects of all that this week.”

With plenty of added competition from end-users, pinhookers found buying at the September sale extra tough this year.

Veteran pinhooker Ciaran Dunne said his team found the competition at the September extra tough as they vied with the various powerhouse partnerships for the top-level colts, while finding value by focusing on individual over pedigree was difficult with the fillies the group tried to buy.

“The sale was unbelievably tough,” Dunne said. “Colts were virtually impossible to buy and even the fillies with physical you wanted were incredibly expensive. It seems the emphasis is all on physical now, which makes our job nigh on impossible.”

Pinhooker Joe Pickerell's Pick View purchased 10 yearlings for $972,000 during the September sale.

“From top to bottom, there was a lot of competition for horses in all price ranges and at all levels,” Pickerell said “It was a little tough in the beginning, but then we started finding spots and getting horses bought. We ended up being really pleased with how it turned out overall.”

Pickerell continued, “Between foal crop being down and the purse structure higher, end users were buying in later books compared to past years.”

The Pick View team, which shopped from Book 2 through the end of the sale, stuck to its original plan despite the increased competition.

“I think it's very important that we don't panic, stay patient and stick to our program,” Pickerell said. “We got a little frustrated early, but then we reassured ourselves to just stick to the program and stick to what we've got to buy. We ended up prevailing and got some really nice horses bought.”

Format Draws Praise

Keeneland has been tinkering with the format of its September sale for several years now, but drew positive reviews for its 2021 format which featured two-session books and a dark day following Book 2.

“The consignors and the sellers were very happy to have 1,100 horses on the grounds prior to the dark day,” said Keeneland's Cormac Breathnach. “It was really something that, combined with the new atmosphere in the pavilion and some of those changes created the energy at the start of the sale–the champagne, the various hors d' oeuvres that were being passed around–that really worked in the sense that it kicked the sale off in a very positive way and it created a lot of momentum. That momentum set the tone for Book 1 and into Book 2 and so on and it's really carried on.”

On the other side of the ledger, Breathnach said, “Every buyer commented that they were appreciative of the number, the critical mass, of horses they had to look at. And they felt like the dark day really allowed them to get ahead, so they weren't playing catch up. They had a lot of horses on the grounds, but in a way that they could get through them and evaluate them and take their notes and not miss any. From that point of view, I really think that the format is tremendously successful this year and was definitely a factor in the success of the sale.”

Consignor Peter O'Callaghan of Woods Edge Farm agreed Keeneland hit upon the right format for its mammoth September sale.

“They got this Book 1 right, a little bit by accident, because there was a promise of three days and they managed to fill it properly with two days,” said O'Callaghan. “The trick now is to maintain it–keep this Book 1 right and keep enough horses in it for a two-day format followed by the two-day format all the way through. And having moved their dark day worked out really well. If they can keep this Book 1 right, the rest of it takes care of itself. It all starts with Book 1, they just need to maintain this now and keep it.”

While Jacob West was happy overall with the format, he had one possible adjustment.

“At the end of the day, I pray to God they don't change it,” West said. “We have had so much volatility in the format with Keeneland over the last couple of years and I think they got it right this year. If I had one small change, you didn't see a decline in prices, but going into Book 2, the change from 1 p.m. start time with Book 1 into the 11 a.m. start time, we had that one day where it was just raining all day long and we were scrambling to try to catch up. I wish they would have had some sort of flexibility in that day to push the start time back an hour or two to allow people to catch up. With more horses going into Book 2, I wish we had an hour or even two. That makes a big difference. You can look at 50 horses in an hour, if you're rolling through them and you're organized and you can get to the right consignments at the right time. More time equals more research  you can get done.”

Indian Creek's Shack Parrish would like to see the September sale kick off with an even more select Book 1 section.

“To me, we still need to work out the Book 1 thing,” Parrish said. “I think one day of Book 1 and being very, very select might work better than trying to place some in there that are overwhelmed by the strength of the other horses. I think it would be easy enough to do that.”

Familiar Names at the Top

Taylor Made Sales Agency was the leading consignor at the September sale for the seventh straight year. The operation sold 304 yearlings for $37,306,500.

For the second year in a row, Spendthrift Farm's Into Mischief was the leading sire by gross, with 62 yearlings selling for $25,967,000.

Into Mischief was followed by a pair of first-crop sires with Triple Crown winner Justify represented by 61 yearlings sold for $22,431,000 and City of Light, who had 47 sell for $17,525,000.

Into Mischief had three yearlings sell for seven figures. City of Light was represented by a pair of million-dollar yearlings, led by the $1.7-million sale-topping colt consigned by Rosilyn Polan's Sunday Morning Farm, and that number was matched by his sire Quality Road. Claiborne's War Front also had two yearlings surpass the $1-million mark.

South Point, Herbener Teams Carry On

The Keeneland consignor ranks were hit by a pair of tragedies during the September sale, with South Point Sales Agency's Mike Recio and consignor James Herbener both passing away.

“I think there needs to be a special recognition of the teams at South Point and with Jim Herbener,” Jacob West said. “They were absolutely blind sided by tragic events. Mike [Repole] and Vinnie [Viola] bought one Arrogate colt off of South Point, hip 830. It's one of those deals where we bought the horse because we liked him, but it did mean a lot to support South Point and the team that kept the flag flying for the Recio family after his passing. I do want to make sure there is some special recognition to those teams for sure.”

Silent Name Filly Tops Keeneland Finale

A filly by Silent Name (Jpn) (hip 3807) brought the top price of Friday's final session of the Keeneland September sale when selling for $120,000 to Bill and Anne Scott. The yearling, one of two to bring six figures on the day, was bred by Adena Springs and consigned by Hidden Brook. She is out of graded stakes winner Ice Festival (Awesome Again).

In all, 244 yearlings sold at Keeneland Friday for a total of $3,937,500. The session average was $16,137 and the median was $12,000. With 256 of 453 catalogued head going through the ring, just 12 horses were reported not sold for a buy-back rate of 4.69%.

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