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Saratoga Gears Up for Uncertain Yearling Market

August 2009
By Terry Conway

Eight-nine years ago a tradition began under the stately elm trees off East Avenue.

The latest edition unfolds on the evenings of August 10-11 as some of the world's most expensive yearlings will come under the hammer at the Fasig-Tipton Saratoga Select Yearling Sale at the Humphrey S. Finney sales pavilion. Known as a "boutique" sale, Fasig-Tipton has catalogued 235 yearlings-- an increase of 21 percent over last year—but a fraction of the more than 5,300 yearlings featured at Kentucky's Keeneland Sale last September.

The warren of stables in Saratoga is surely the most bucolic in America. Flower baskets dangle along rows of timber stalls. Star yearlings are pampered and fussed over all day. Manes are brushed and whiskers trimmed, flanks and hoofs polished.

It all started in 1898 when William Fasig and Edward Tipton founded their company, today North America's oldest thoroughbred auction firm. It currently conducts auctions in Lexington, Ky., Saratoga Springs, N.Y., Timonium, Md., Miami, Fla., and Grand Prairie, Texas. In 2007, Fasig-Tipton sold more than $240 million in thoroughbreds at 17 individual sales.

Still, times change.

When Synergy Investments, a Dubai-based company owned by racing and breeding mogul Sheik Mohammed, purchased Fasig-Tipton in 2008, the racing industry and its fans howled. Fears centered on a great American institution becoming "foreign-owned." Fasig-Tipton responded by saying it needed to bring the company and properties fully into the 21st century.

Extensive Renovations

The immediate upshot is the extensive and impressive renovations to the sales grounds-- the biggest project since the pavilion was built almost 50 years ago. Authentic slate roofs are being put in place, along with real copper accents. Vermont timber is being installed throughout. A world-class walking ring is under construction. The improvements will be completed before the select auction starts.

"It's the perfect way to showcase the magnificent conformation of thoroughbreds," noted Susan Zehnder, project manager and partner in the Louisville firm Idea Source. "The company aims to create a total experience for the buyer. That mission will be accomplished when the buyer walks away knowing that they had a great business exchange and had a wonderful experience in an environment that's both energizing and soothing."

They'll need that soothing environment this year. The thoroughbred industry has been reeling in the aftermath of the financial meltdown last fall that spawned a brutal global recession. It's been battling significant downturns in purses and wagering in the U. S. In addition, at many of the breeding stock sales this year prices of broodmares have plummeted 40 percent, and two-year olds in training have fallen by 30 percent or more.

As spring turned to summer the battered economy had tempered somewhat, and it could improve the confidence of yearling buyers. Another boast could come from the final crop of the great sire Storm Cat who sired 171 stakes winners as of the end of June. Born at Derry Meeting Farm in Chester County, Pa., Storm Cat was pensioned in May 2008 because of declining fertility. There are seven Storm Cat yearlings in this year's Saratoga catalog.

The top of the Saratoga market is likely to be dominated by the offspring of A. P. Indy (a super-sire over the last decade) and proven Grade 1 sires Dynaformer, Ghostzapper, Indian Charlie, Kingmambo, Medaglia d'Oro, Mr. Greeley, Street Cry, Tapit, Tiznow and Unbridled's Song.

Numbers Up

Saratoga will put more young horses under the gavel than in over a decade. There will also be a dozen new consignors in 2009. But, what will be the demand for the 2009 yearlings?

"More important than bigger (in numbers) is better, and this is an outstanding group of yearlings," said Fasig-Tipton president Boyd Browning. "I anticipate that we'll have a reasonably healthy yearling marketplace in 2009.

"Will it be at the absolute height that we've seen it in previous years? Probably not. But there will still be a fairly broad base of support for yearling sellers who are realistic with their reserves."

Headley Bell believes that Sheik Mohammed's business plan-- to reach out and show people what ownership is all about— is exactly what Saratoga needs this year. They are teaming up with the New York Racing Association to present a "Festival of Racing," which will include the Whitney Handicap and the Test Stakes the weekend before the yearling sale.

Bell, of Mill Ridge Sales and Nicoma Bloodstock in Kentucky, advises Roy and Gretchen Jackson and George Strawbridge, Jr. on bloodstock.

"It will be a full court press to grow the buyer base— providing accommodations, airfare, tickets, hosting parties and the racing," said Bell. "They've got fresher thoughts, new money and want to compete versus Keeneland. It all dovetails together. They are in it for the long haul. They realize customer needs have changed considerably and they're trying to facilitate them."

Prices Projected Down

Still, Bell says he wouldn't be surprised to see the Saratoga sales down 25 to 30 percent.

"But, that's not all bad," he noted. "I don't think the economy is going to snap back. We're all going to be hunkered down for quite awhile. This industry has seen 20 or so steady years. It's hard to maintain discipline when things are going that well. That discipline-- along with a clear vision-- are critical these days. The key is value."

A native of Bucks County, Pa, Terry Finley agrees. He is the founder and owner of West Point Thoroughbreds, one of racing's leading partnership groups.

"Obviously the horse business isn't what it was," said Finley, based in Mount Laurel, N. J. "Prices are more sensible, and end users have a better shot to get a return on their investment at the races. This turbulence in the market isn't all bad."

Derry Meeting is a name that says classic, long recognized as a small and select breeding operation that was established by the late Marshall Jenney in 1968. It was the birthplace of super-sires Danzig and Storm Cat as well as countless elite Saratoga sale yearlings.

This year the Cochranville farm is offering just a pair of yearlings: a grand looking and very athletic Indian Charlie colt out of Screening by Unbridled and a Tale of the Cat Colt out of Hypoxia by Shadeed. A promising Dixieland Band colt developed serious health problems and was pulled from the sale.

This year's crop of foals points to a strong year in 2010 at Saratoga, including a pair of colts by Dynaformer, colts by Indian Charlie and Forestry as well as fillies by Street Cry and Empire Maker. Looking further ahead, offspring of super-hot sires Medaglia d'Oro and Birdstone should be foaled at Derry Meeting in 2010. Over in England Derry Meeting owner Bettina Jenney's star runner Mrs. Lindsay is in foal to elite Irish stallion Galileo, a mating that should produce a top-dollar colt.

Walnut Green Farm

Another longtime consignor at Saratoga is Walnut Green Farm outside West Grove, Pa. They are presenting a colt by Ghostzapper, out of Shine Again; a filly by super-hot Medaglia d'Oro out of Glowing Breeze; another filly by Medaglia d'Oro out of Liszy, and a colt by Afleet Alex out of Pose. The last three offspring are Pa-breds.

"Saratoga always brought fresh faces who made money in other businesses and would spend it on nice horses," noted Mark Reid, owner of Walnut Green. "I'm optimistic this year but you have to wonder if the economy has bottomed out. Historically, the horse industry has always been cyclical. The market would go back and forth. We've never faced these kind of dire economic conditions.

"This is the nicest group of horses we've brought up to Saratoga since I bought Walnut Green four years ago. They are big, powerhouse horses. If someone wants a nice horse we've got them."

Walnut Green foaled 70 mares in 2009, including two colts each from Afleet Alex, Medaglia d'Oro and Pa-bred Hard Spun-- all ticketed, initially, to Saratoga next August. Looking ahead, three of Reid's clients' mares will drop Hard Spun foals in 2010. The Kentucky Derby runner-up in '07, Hard Spun was bred by Betty Moran and her son at Betty's Brushwood Farm in Malvern.

"Hard Spun has the look of a no-miss horse," Reid declared, "He is a big, strong, pretty horse who was tough to outrun every time they led him over to the track. He had the best speed of that exceptional crop of 3-years in '07, showed up for every race and he is by super-sire Danzig. Hard Spun is in high demand, so we were very fortunate to get to him with our mares this year. I look for big things when his colts and fillies start hitting the track."

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