There's a friendly debate that takes place every year between North America's leading Thoroughbred auction house, Keeneland, and Europe's leader, Tattersalls, based at Newmarket—who stages the world's most important yearling sale, Keeneland's September yearling sale or Tattersalls' October Book 1?
Of course there are various metrics cited by one side or the other, though in fact, it's really just a sporting argument as both are equally important.
The awesome thing about the American market is its size—twice as big as the markets in England, Ireland, France, and Germany combined. We count Keeneland September as one sale, with six books over two weeks this year. Just to illustrate the depth of the American market, for the entire Keeneland sale more than 1,000 individual buying entities signed for yearlings, including 64 individual buyers who spent $1 million or more.
Tattersalls October is eventually counted as one sale also—Books 2 and 3 take place this week, with Book 2 getting underway Oct. 9—so the fairest comparison is Keeneland September Week 1 (Books 1 and 2 this year) versus Tattersalls October Book 1, which took place last week.
Keeneland September kicked off with a Monday super-session, at which 95 yearlings sold for $54,175,000 and averaged $570,263; by the end of Week 1, there had been 681 yearlings sold, for a total of $196,645,000, and an average of $288,759. The entire sale finished up with receipts of $307,845,000.
Tattersalls sells in guineas, an archaic currency that is actually £1.05 (the buyer pays in guineas, Tattersalls keeps the 5-pence difference, and the seller gets paid in £ pounds), and since 2011 the three-day Oct. 1 catalog has varied from a high of 577 cataloged in 2012, to a low of 472 just two years later.
Last year's Book 1 cataloged 551, of which 386 sold (70% of those cataloged; that metric usually runs about 10% higher in Europe) for 88,038,000 guineas and averaged 228,078 guineas (about $317,000 at today's exchange rate). This year there were 502 cataloged in Book 1, a 9% drop from last year, of which 349 sold, which was 69.5% of those cataloged.
Even with nearly a 10% drop in the number sold the sale recorded a record gross, topping the 100 million guineas mark for the first time. It finished at 102,290,000 guineas (about $142 million), a 16% gain over last year's record 88 million guineas, and averaged 293,095 guineas. That was a 28% gain over last year's average, and 24% above the previous record, set in 2014, and converts to $407,862.
I calculated that 5,338 yearlings sold at major sales in North America and Europe up through Oct. 8, which grossed a little over $650 million, and therefore averaged $121,817—and of course, the year is not over. During the rest of this month there are sales in Newmarket this week, next week at Arqana in Deauville for their October Sale, and Fasig-Tipton's October sale toward the end of the month.
Keeneland September Week 1 and Tattersalls October Book 1 between them have had 1,030 yearlings sold for nearly $339 million—that's 19% of the yearlings sold, for 52% of the money. The average for yearlings sold at those two sales is $329,115; the average for the other 4,308 yearlings sold thus far is $72,254, which includes some other elite sales, such as Fasig-Tipton Saratoga, Arqana August in Deauville, and Goffs Orby in Ireland.
Keeping in mind the Thoroughbred market in general posted about 30% gains between 2012-13, marking the recovery in horse prices from the deepest world recession in 80 years, but then remained essentially static between 2013-16, there are three factors that contributed to this 2017 bull market in the North American and European Thoroughbred auction marketplace.
First are general economic conditions: the Dow-Jones Industrial Index is above 22,700 and the FTSE 100 is over 7,500. So a lot more people have a lot more money than they did five years ago. Some commentators think there is such a strong market in so many areas that it can't possibly last, and already see troubling warning signs on the horizon. Undoubtedly they will be proved correct sooner or later but, at this moment, people do have money and the Thoroughbred business is benefitting from it.
That is an external factor, but two factors are internal to the Thoroughbred industry that also contributed to the 2017 price surge: the thawing of relations between Godolphin and Coolmore; and the emergence and consolidation at the very top of the market of five super-sires.
After 11 years, beginning in 2006, when Maktoum associates wouldn't buy the progeny of Coolmore sires, preferring to develop and patronize their own sires (led by Dubawi), the Maktoum policy changed dramatically this year. A lot of people ascribe this to the departure of John Ferguson from Godolphin, but key insiders on both sides suggest this could be a case of adding two and two together and getting five, and that the policy was changing even while Ferguson was still in charge.
In any case, it has changed. Godolphin signed for two yearlings by the late, great Coolmore America sire Scat Daddy on the opening Book 1 night of Keeneland September; by the end of last week, Godolphin had signed for 14 yearlings by Coolmore sires at Keeneland September, Goffs, and October 1, and Maktoum associates Rabbah Bloodstock had signed for a further 10.
These included nine yearlings by Galileo, including the 4 million guineas Tattersalls sale-topping filly, the most expensive yearling sold in the world this year (converts to $5,563,320), for which they outbid none other than Coolmore. The two entities, Godolphin and Rabbah, also signed for seven yearlings by Australia, Coolmore's top first-year yearling sire; three by Scat Daddy; two by Camelot; and one each by Uncle Mo , Lookin At Lucky , and Mastercraftsman.
For their part, the Coolmore team, in partnership with South Africa's Mayfair Speculators and signed for by Mayfair's principal European buyers, Peter and Ross Doyle, bought a 2 million guineas Dubawi colt out of the champion racemare, Sky Lantern.
The other factor that really jumps out at us when examining the sales results is the emergence of five super-elite sires: Tapit and War Front in America, and Galileo, Dubawi, and now Frankel in Europe. There are eight sires with 2017 yearling averages so far ranging between $300,000-$400,000: Medaglia d'Oro , Pioneerof the Nile , Scat Daddy, and Curlin in America; and Invincible Spirit, his son Kingman (leading sire on average with first yearlings), Shamardal, and Sea The Stars in Europe.
But there is nothing above $400,284 (Invincible Spirit) until you get to the five super-sires: the lowest average of those five is Frankel, whose current average of $673,841 is a mind-blowing 68% higher than Invincible Spirit's. Their other averages are: Dubawi $992,678 (29 sold); Galileo $884,866 (31 sold); Tapit $883,333 (21 sold); and War Front $709,253 (22 sold).
When you add them up, these five sires have had 127 yearlings sell this year, for a combined gross of $106,544,264, and an average of $838,931. That constitutes 2.38% of the yearlings sold (one out of every 42) for 16% of the total $650 million spent. That means the other 5,211 yearlings sold so far have averaged $104,340. These are some pretty staggering numbers, in what adds up to a pretty impressive yearling sales season so far.