Uncertain sales

“Although the results of the major 2020 European yearling sales were a success in the circumstances, they still represented a loss equivalent of some $60 million for vendors”

Photography courtesy of the sales companies

Statistics by Jocelyn de Moubray (see the pdf from page 76 to see the tables and stats in full)

AFTER THREE YEARS of stability and a longer period during which the market’s shifts were relatively insignificant, the European yearling sales were upended by the COVID pandemic in 2020, writes Jocelyn de Moubray.

At various moments during the year there was real fear that there would not be any bloodstock sales at all and so for the major sales to end up only 18 per cent down on aggregate on 2019 will be seen by many as a success.

I find the best way to look at overall trends in the European market is to put all the figures into US dollars.

In this way the fluctuations in the exchange between sterling and the euro are evened out, and when you look at the list of leading buyers, who continue to account for around 40 per cent of the market, it is safe to assume many are doing their own reckoning in dollars rather than in the local currencies.

The sales were, of course, different this year.

Goffs was obliged to move the Orby, its flagship Irish sale, to Doncaster in England due to COVID-19 restrictions and Arqana had to change the format of its sales – it held sales in September and October rather than the usual August and October. It also had to compress the August Sale, V2 Sale and October sales into two sales, the Osarus September Sale was cancelled and some of those horses were added to an extended Arqana October Sale.

In order to make a comparison between 2019 and 2020 for the Arqana sales I have added 50 per cent of the Osarus 2019 September Sale to the total of the Arqana August and October sales.

Although the results of the major 2020 European yearling sales were a success in the circumstances, they still represented a loss of some $60 million for vendors.

Anthony Stroud did little buying work for Godolphin until the yearling season moved to Tattersalls. At Newmarket he was busy throughout Book 1 and Book 2. Godolphin signed for 22 horses in Book 1, three in Book 2. Three lots went down to Stroud Coleman Bloodstock in Book 1, and 29 in Book 2

Looking ahead to a time when it will once again be simple to travel and attend race meetings, this year’s sales starkly revealed the extent to which the British and Irish yearling market depends upon the buying of the Maktoum family.

The figures given for purchases of the leading buyers are only an estimate as only the sales companies and the buyers themselves know the actual figures.

However, even if the figures are an estimate, there is no doubt whatsoever that the Maktoum family, buying principally through Godolphin, Shadwell, Rabbah and Stroud Coleman, not only reduced its overall spending, by about 30 per cent from $72 million to $52 million, but also it changed its distribution.

In 2019, Shadwell was the leading buyer at the Goffs UK Premier Sale in Doncaster spending around 11 per cent of the aggregate; this year it did not appear to buy at the sale all. At the 2019 Orby Sale between them Shadwell and Godolphin spent nearly €5 million. That spend was less than £500,000 between them at the sale this year at Doncaster.

The difference was felt in Europe, too. Godolphin reduced its spending by €3 million at Arqana in September compared with August in 2019 and by €1.75 million at the BBAG sale in Baden-Baden.

This year, the Maktoum family’s buying was focused more than ever on the Tattersalls October Book 1 and 2 sales.

At the sales considered Shadwell bought 47 yearlings, 46 of which were at the Tattersalls October sales.

The colt by Starspangledbanner (Lot 165) topped the Goffs UK Premier Sale, sold by Coulonces Sales to Richard Ryan for £170,000

The Goffs Orby Sale top lot – by Oasis Dream out of Princess De Lune, Lot 343 sold by Round Hill Stud for £450,000 to Shadwell

The top-priced colt at Tattersalls Book 1 was Lot 174 by Kingman ex Galicuix sold by Houghton Bloodstock to Oliver St Lawrence Bloodstock for 2,700,000gns, bought on behalf of Bahrain-based clients

The top-priced colt at Arqana September was Lot 199, by Galileo sold by Ecurie des Monceaux to MV Magnier for €2,000,000

About 90 per cent of the Maktoum family spending on yearlings in Europe in 2020 took place at Tattersalls October.

Maktoum family spending was down at October Book 1 (22 per cent), and October Book 2 (seven per cent), but at both sales it accounted for a similar proportion of the overall aggregate, 24 per cent at October Book 1 and 27 cent at October 2.

These changes in the way the Maktoum family chose to buy yearlings in 2020 compared with previous years go a long way to explaining the results recorded by the various sales.

Difficult year

It was a tough year for Goffs UK, which saw the aggregate at its Premier Sale fall by 38 per cent in sterling, and for Goffs the aggregate for the relocated Orby Sale fell by 43 per cent. It was not only the Maktoum family, who spent significantly less at Goffs in 2020 than in 2019.

MV Magnier, Coolmore and the Hong Kong Jockey Club (HKJC) were other major buyers to reduce their spending at the two companies’ sales. This all added up to a significant fall in revenue for the vendor, and it is hard to imagine this was in any way linked to the quality of horses on offer.

There were other buyers, such as Phoenix Thoroughbreds and Shawn Duggan, who had been significant in 2019 at both Goffs and Arqana, who were not active in 2020.

The top of the market at Arqana’s sales was clearly down on 2019. In total, Arqana sold eight yearlings for more than €500,000 and 32 for more than €250,000 in 2020, a fall of 18 at the higher bracket and 45 for the second range from 2019.

However, the remainder of the French yearling market held remarkably well and the combined Arqana September and October Sale, together with half of the Osarus September Sale, ended up with an aggregate down by 16 per cent in euros and only 10 per cent in dollars.

Some of the big international buyers who normally attend the August Sale were at neither September nor October in 2020, but the French racing system and the prize-money on offer for all horses, but particularly for French-breds, appears to be more attractive than ever.

At the huge October Sale, which lasted five days and saw 710 yearlings go through the ring, the proportion sold was higher on Day 5 (83 per cent) than it had been on Day 1 (79 per cent).

Al Shaqab played an important role at Arqana and was the leading buyer at the October Sale with 19 lots bought for a €1.7 million spend, many by one of its own stallions.

Godolphin BBAG reduction

Turnover at the Baden-Baden September Sale was down 23 per cent in euros, but this was hardly surprising when Godolphin spent €1.75 million, the equivalent of 28 per cent of 2020’s aggregate, less than it had in 2019.

There again the domestic market held up surprisingly well in the circumstances.

Tattersalls surprise

Vendors, and no doubt the sales company itself, were nervous before Tattersalls October, understandably so given what had happened at Goffs.

However, from Day 1 of October Book 1 it was obvious that the stallion owners – Coolmore, Godolphin and Shadwell – were going to support the sale, and the US-based buyers were going to once again play an important role.

The Maktoum family and Coolmore’s buys made up nearly 40 per cent of the aggregate, while Mike Ryan, and Demi O’Byrne for Peter Brant’s White Birch Farm, another eight per cent of the total aggregate.

Ryan and Brant bought fewer horses than they had when acting together in 2019, but once again they spent nearly $13 million.

Lope De Vega is fast becoming the European sire for the US, Ryan and Brant bought five by the Ballylinch sire between them, but they also bought yearlings by a range of other stallions, including the unproven sires Almanzor, Ribchester and Caravaggio.

October Book 2 was even more of a surprise finishing with the third-highest sale aggregate of all-time and only 150,000gns off the recordbreaking sale in 2019.

The Maktoum family and its agents spent nearly 30 per cent of the aggregate, and both O’Byrne and the HKJC were also very active.

Vendors who had decided to place their best horses in the sale would have had many weeks of stress beforehand, but were pleasantly surprised and rewarded in Newmarket with by far the strongest market of the year.

So what of the future?

None of those involved at a high level in the commercial yearling market hold many illusions about its true nature.

For years the figures have shown clearly that the return on an investment in expensive mares, stallion nominations or both is always going to depend upon the decisions of a small handful of people.

This year showed both what a sales season could be like without the support of the key players at Goffs, and what is it still like when the same people are buying as enthusiastically as ever as they did at Tattersalls October Book 2.

What the future will hold and how commercial vendors should be planning for the 2021 covering season is anybody’s guess, but it surely looks as though in the medium term the trend is more likely to be downwards rather than a return to the recent past.

Sire sale popularity changing?

WHEN THE market changes so does the type of horse most rewarded by it.

Looking at the list of stallions ranked by the percentage change in their yearling average between 2019 and 2020 (see table overleaf), it seems there is a definite trend towards horses bred to be at their best over middle-distances and away from fast, precocious types.

Of the 17 sires whose averages progressed by more than 10 per cent many are clear middle-distance sires – Teofilo, Sir Percy, Farhh, Sea The Moon, Nathaniel, Intello, Reliable Man and Adlerflug.

The best returns come, of course, from those sires who were still relatively cheap in 2018 and whose standing has risen since, but if we knew how to pinpoint these in advance commercial breeding would be a simple affair!

Juddmonte’s Kingman was clearly a great bargain at £55,000 in his fourth season at stud in 2018.

Among sires with second-crop yearlings few saw their average progress significantly from 2019 to 2020, and the biggest movers were the Haras de Colleville’s Goken, whose average was up some 130 per cent to £40,000, followed by Ballylinch’s

New Bay, up 80 per cent to £70,000 and Tally-Ho Stud’s Mehmas up 70 per cent to £55.000.

Five first-crop yearling sires stood out from the others.

Coolmore’s Caravaggio was the only one to record an average of more than £100,000, but Etreham’s Almanzor, Coolmore’s Churchill, Darley’s Ribchester and Cheveley Park’s Ulysses all finished with averages of £60,000 or higher.

Profitable, Time Test and Zarak were three whose first yearling average was considerably higher than their first foal average in 2019.

Mike Ryan: bought 17 lots in Book 1, all heading stateside