The Ocala Breeders’ Sales Co. (OBS) recently revised the results for the 2008 August yearling sale on its Web site (www.obssales.com) because of new rules governing horse auctions in Florida that took effect in July.
Sale companies are now required to disclose any horses that did not change ownership after being reported as sold. The disclosures must be made in the same manner in which the auction firms originally disseminated the information, and they must be reported within 90 days of the end of an auction.
Updating sale results to provide more accurate information on horses that were bought back isn’t required in other states, and the Sales Integrity Program hasn’t addressed the practice in its recommendations. But “the promulgation of the Florida statute will provide a catalyst for further consideration of the issue,” said D.G. Van Clief Jr., the chairman of the Sales Integrity Program Monitoring Committee “The issue has arisen – although casually and unofficially -- with members of our committee, and I’m sure it will be an agenda item for our consideration in the near future.”
OBS changed the status of 10 August yearlings, which grossed $275,500, from sold to not sold. They ranged in price from a low of $1,500 to a high of $75,000 for a Closing Argument– Cove Hill Missle colt. Richard Kent’s Kaizen Sales consigned four of the yearlings, including the Closing Argument colt, for Sienna Farms.
“We were part of the process, and we supported it,” said Tom Ventura, the OBS general manager and director of sales, of results update requirement. “One of the concerns was that there were horses that were not actually being sold that might inflate the (sale) averages of stallions and other things of that nature. By updating the sale results, it would provide a more accurate reflection of the (value of the) offspring of a particular sire.
"Of all the horses that were sold in August, there were only 10 (which were changed from sold to not sold), so the perception of the issue is really bigger than the reality. It may be overblown in people’s minds. One entity (Sienna Farms) was going to transfer the horses from their farm to their racing stable and ultimately decided against it; they’re going to resell them as 2-year-olds. Because of the current law in Florida, there is the potential for sales tax issues if someone sells them other than the breeder, so they (Sienna Farms) decided they would treat them as buy-backs.”
The updates in the OBS sale results do not include any horses that were returned to their consignors because they didn’t meet the conditions of sale or any reductions consignors made in prices because of veterinary issues.
“I think that makes sense if the concern is the market value of the horse when it went through the sale ring,” Ventura said. “If the horse had some sort of veterinary issue and the buyer and the consignor agree on a reduced price or, ultimately, the horse gets returned, I think that should remain between those two parties because it’s not really an indication that the horse was worth less at the time it went through the ring.”
The revised OBS results also don’t indicate which horses had a change in their status – from sold to not sold – but “we’re happy to tell people who are interested which ones they are,” Ventura said. “We may consider doing something along those lines (to identify such horses) in the future.”
According to Ventura, OBS often finds out about horses that weren’t actually sold when they bill the buyers.
“When they get the bill, they’ll call us,” he said. “Other times, within a day or two of the sale, the consignor will come to us and say, ‘Oh, I see my horse was listed as a sale, but the owner signed that sale ticket and it really should be a buy-back.’ There aren’t really that many horses involved, and I would say that there will be even fewer for our October (mixed) sale than there were in August. I just don’t think it’s that big of an issue, honestly.”
Breeder-owner Earl Macke and others were behind the push for reforms in Florida rules governing sales to promote integrity in the Thoroughbred marketplace.