8 minute read
Playing the markets
Kia Joorabchian’s big spend at the Tattersalls October Yearling Sale had a dramatic effect on the yearling trade. It revealed just how narrow the industry is in Europe, and how the impact of one buyer can influence whole market dynamics, writes Jocelyn de Moubray
FEW IF ANY OF THE professionals who headed to Newmarket for the Tattersalls October Book 1 Yearling Sale were expecting a boom.
The previous year’s October Book 1 sale had been a difficult one for vendors with turnover falling by 25 per cent and the average price by 18 per cent and with a top lot making only two million guineas.
As is more often the case October 1 set the tone for a full sales cycle and, over the next year, turnover at the major yearling sales in England, Ireland, France and Germany, was in real terms, either flat or down somewhere by around 5-10 per cent.
The market was generally described as selective, which means, of course, that demand was inadequate for the horses on offer and those with money to spend could buy the lots they had selected without having to go beyond their expectations.
But, from the moment the first lots went through the ring at this year’s October Book 1, it was evident something had changed.
Amo Racing, a partnership headed by Kia Joorabchian, had come to the sale determined to compete for the best lots on offer. Over the three days this desire showed no signs of diminishing and on its own, as well as with other partners, Amo purchased a total of 25 lots for 23 million guineas.
Twenty three million guineas represents a significant boost even for Book 1, which has a turnover more than double any other European sale, it is the equivalent of some 23 per cent of the total aggregate of 2023.
If you add 23 per cent to the demand results will inevitably rise by more – some of the other buyers will have to bid higher than they would otherwise have done to secure the horses they want, while some of those unable to purchase the top lots will shift their interest to others instead.
At the end of the three days the aggregate had increased by 34 per cent to 128 million guineas, with Amo and partners accounting for 18 per cent of that total.
Godolphin fell into the category of those prepared to spend more to acquire its selections and its spending went from 20 horses purchased for an outlay of 12 million guineas in 2023 to 18 horses bought for 22 million guineas this year, a rise of 83 per cent.
Joorabchian and Amo Racing has had horses in training in Britain and Ireland for around ten years now.
Over the last five years Amo has won about 200 races in total in Britain and Ireland and its best winners have included July Stakes winner and Tally-Ho Stud stallion Persian Force, as well as the Derby runners-up Mojo Star and King Of Steel, also now a stallion at Tally-Ho.
It has bought expensive horses before, and this year purchased the Group-placed two-year-old Angelo Buonarroti for a million euros at Arqana in May (see horses to follow, page 52) as well as a Kingman colt out of Laurens for £650,000 at the Goffs Royal Ascot Sale.
In the US, Amo bought two-year-olds in training at Ocala at the beginning of the year and then among others four yearlings for more than $900,000 at Fasig Tipton Saratoga and Keeneland September.
However, Amo was not active at either Arqana in August or at the Goffs Orby Sale so there was no reason for any outsider to be able to predict a 23 million guineas splash at October and then the further 1.4 million outlay at the October Book 2 Sale.
Something similar had, of course, happened at the 2022 Tattersalls October Sale when the new buyer was Richard Knight who spent 10.5 million guineas on 16 yearlings, which was about 10 per cent of the 2021 aggregate.
As a result of Knight and others the aggregate rose by 34 per cent in real terms from 2021 to 2023, only to fall again in real terms, by 34 per cent the following year.
Comparisons of all European sales over the covid period are complicated by the fact that this was a period with strong inflation, which was stronger in Britain than in the Euro zone.
To give an idea of how the market has shifted during the period 2019 to 2024 the aggregate and average price at the Tattersalls October Book 1 and 2, Goffs Orby Part 1 and the Arqana August and October sales have been put into 2024 guineas or euros.
Tattersalls and Goffs have maintained a similar format during this period, while Arqana’s October sale has been expended so only the first three days have been included in the calculations in order to keep the number of yearlings offered roughly the same.
The result is that at the Goffs Orby Sale both the aggregate and the average price have fallen by seven per cent in real terms.
At Tattersalls October 1 and 2 combined the aggregate has risen by four per cent and the average price by nine per cent, (the numbers in October 1 have been reduced and overall Tattersalls sold 40 fewer horses at the two combined in 2024 compared with 2019).
At the combined Arqana sales the aggregate has risen by eight per cent and the average by 12 per cent (for 23 fewer horses sold).
The period from 2019 to 2024 has in real terms seen either a small gain or a small loss depending upon which of the three major sales companies you look at.
Even for Arqana growth of eight per cent over a five-year period can hardly be called a boom market, particularly as over the same period fees for the top stallions have increased by around 25 per cent in real terms in England and Ireland.
The boom market came before covid – between 2010 and 2018 the Tattersalls October Book 1 sale grew in turnover by 120 per cent in real terms, growth over 13 per cent a year over a nine-year period.
Since then the European yearling market has recovered the business it lost during the covid year of 2020, but the market has been characterized by uncertainty and swings from one year to the next, posing difficult dilemmas for commercial breeders who have to decide now what to invest in stallion nominations to sell at the 2027 yearling sales.
AT THE TIME OF writing, few of the major stallion farms have announced their fees for 2025, but it is hard to see how, if you look over a five-year period rather than just the headlines which came out of the October 1 sale, that further significant across the board rises are justified.
In any event stallion farms seem to focus more on volume than price to grow their business these days.
In 2019, Kodiac was the sire with the most yearlings on offer with 124 and, overall, 12 stallions had 75 yearlings or more catalogued.
Fast forward five years to 2024 and Starman had the most yearlings offered with 140, while a total of 18 sires had 75 or more yearlings offered, a total of 1,748 yearlings between them.
Everybody involved will hope that the 2025 October 1 Book 1 Sale is not a repeat of 2023 with the previous year’s gains immediately reversed, but it must be a possibility as the European yearling market remains, as it has been almost for as long as any of those still active have been involved, dominated by a few groups.
At this year’s Keeneland September Sale the leading buyer Donato Lanni, agent for the SF, Starlight, Madaket partnership, spent some $11 million, less than three per cent of the total, and all the ten leading buyers were based in the US.
It was not very long ago that the Maktoum family and the Coolmore partnership dominated American sales, too, as recently as 2010 the Maktoum family spent 10 per cent of the total at Keeneland September, enough to change the sale if for one reason or another they didn’t buy the following year.
This time has passed and the demand for the best commercial yearlings in the US is both strong and competitive with 20 or 30 different groups purchasing million dollar yearlings at September this year.
How the 2027 yearling sales play out depends more than anything else on decisions taken in private by a small number of individuals.
The examples of Knight in 2022 and Amo in 2023 show how one buyer can change the market for everyone, and this is as true for negative effects as positive ones.
Turnover at Arqana August fell by eight per cent from 2023 to 2024, a renewal marked by Godolphin’s smallest participation this century, Sheikh Mohammed’s organisation purchasing only one yearling for €400,000.
In 2023, Godolphin had spent €5.4 million at the August Sale and in three of the previous five years it had spent between €5 and €6 million euros in August, or about 10 per cent of the total.
