Belly-to-Belly Business

A week after the 1985 Keeneland July yearling sale the package arrived. Inside were ring and conformation shots. It was nice of Warner Jones to send them. He had consigned the $13.1-million colt.

Those photos have adorned an office wall ever since. Great to have something like that to look at every day. The $13.1-million horse that conformation experts agreed is the best to have sold during the modern era of Thoroughbred auctions.

What made it even more special is that the colt established a world record that would never be broken.

Now comes a $16-million horse, proof that two clich├ęs will always hold true: Never say never, and records are made to be broken.

If you flip a coin 99 times and it comes up heads each time, the odds of it being heads on the 100th toss are still 50-50. But while 3.1% of foals win a stakes race, the odds are a bit different with this purchase. For one thing, the Fasig-Tipton Calder sale, based on TBH MarketWatch statistics, was represented by 5.8% stakes winners (79 horses) offered at the 1998 through 2002 sales. For another, buyer Demi O'Byrne bought six stakes winners at 2-year-old sales (28.6% of those he purchased) and three won grade I races.

You may think it is ludicrous to spend $16 million for an unraced horse--any unraced horse--and for 99.99% of the buyers in the world, you would probably be right. But for the buyer and underbidder on this colt, Coolmore and Darley, respectively, it can make sense.

Breeding horses is a business. If you don't accept that premise, you really don't need to read on.

The biggest part of the business is the standing of stallions, and in that arena, Coolmore claims the top spot while Darley and others seek to also exist in the same realm.

This breeding season, Coolmore is standing 21 stallions in Ireland and 18 in the United States. There are 17 that will cover mares in Australia, obviously many of those being shuttlers. Darley is standing 49 stallions in eight countries.

It is impossible to ascertain how much Darley or Coolmore realizes from stud fees, since they breed their own mares, sell seasons for different prices, enter into foal share and partnership agreements, etc. But it is safe to say hundreds of millions of dollars.

How many stallions hit? Well, those odds are impossible to determine, but certainly for every one that does make it there are many more that do not. With the large stallion operations, having 20 stud horses is a lot like buying five yearlings at a sale rather than pooling all that money to buy one. There is safety in numbers. The odds are better that one of those five will be a runner and possibly cover the expenses of the other four.

So, with Giant's Causeway's stud fee escalating this year at Coolmore's Ashford Stud to $300,000, it only takes selling 54 outside seasons to cover taking a shot on a $16-million 2-year-old. Hennessy was purchased as a yearling for $500,000, earned $580,400 on the racetrack, and now nine years after entering stud at Ashford, stands for $75,000. One Hennessy pays for many that don't work out.

If the $16-million 2-year-old, by Forestry out of the Unbridled mare Magical Masquerade, wins a grade I race, he will be worth the lofty price Coolmore's John Magnier and partners paid for him.

The track record of previous high-priced weanlings, yearlings, and 2-year-olds is known. For every Fusaichi Pegasus, there is a Snaafi Dancer. In fact, for every Fusaichi Pegasus--bought as a yearling for $4 million, classic winner, syndicated for a large amount, and successful stallion--there are many like Snaafi Dancer, who sold for $10.2 million as a yearling, was unraced, and turned out to be sterile.

During a recent conversation with a Thoroughred auctioneer, he mentioned how a first-time sale attendee couldn't believe the "belly-to-belly" action that is the commerce of buying and selling horses. Put the horse in the ring, make your bids, and then get him out and bring in the next horse.

Belly to belly is the way John Magnier and Sheikh Mohammed play the game. There is nothing ludicrous about that.