Keeneland September Yearling Sale
(Photo : Keeneland)
“LETTER FROM AMERICA”
By John P. Sparkman
Five years after Lehman Brothers filed for bankruptcy during the 2008 Keeneland September Yearling Sale, total proceeds for the 2013 version of the sale surpassed the 2008 total with five sale days still remaining on the sale calendar. I think it is safe to say that the American breeding industry is back - at least in our own insular, persistently xenophobic fashion.
Few thoroughbred breeders and owners at the 2008 September Sale really understood what the disappearance of Lehman Brothers meant on the day it happened, but by the time the Keeneland November Sale rolled around two months later, virtually every thoroughbred they owned was worth 40% less than they had thought in September. Breeders deeply indebted to banks based on September bloodstock valuations and income projections were suddenly in very deep trouble. Although it took a few years, some were forced out of the business and many others cut back sharply.
The law of supply and demand is inexorable. American breeders were producing about 34,000 foals a year in 2008. This year they bred around 23,000, about a 33% decline since the crash.
That in itself would not explain fully the big surge in prices at Keeneland last week. Perhaps an even bigger factor is that wealthy Americans are feeling very, very good about themselves these days. Although the economic recovery that began with the election of Barack Obama has been cautious and hesitant, unemployment remains high and middle class wages are stagnant or declining, income for the wealthy has soared well past 2008 levels. Wealthy Americans have plenty of money to spend and racing is once again an attractive, exciting way to spend it.
Almost all of them, though, are interested only in spending money on horses to run in American races at American racetracks. In response to worries that European buyers are no longer very interested in American horses, one American reportedly said, in essence, “Who wants to win the Arc anyway?”
A sense of history coupled with respect for the institutions of the Old World has never been an American strong point and with wild-eyed Tea Party Republicans competing daily to proclaim themselves more genuinely, completely, against anything they choose to classify as un-American, that kind of statement is unsurprising among a class bound to lean toward the conservative in any climate. Never mind that Ted Cruz, the most wild-eyed of the Tea Partiers, and the one most obviously positioning himself for a Presidential run in 2016, was born in Canada, which is the self-same sin the Tea Partiers claim should disqualify Obama from the Presidency, despite his verified Hawaii birth certificate.
That should tell you all you need to know about the mood of the country right now. In other words, don’t expect rationality from us right now. You will be disappointed.
The answer to the question is, of course, that European and Middle Eastern buyers very much want to win the Arc and some of them have noticed that we are once again breeding horses that might actually have a chance, if not at the Arc, at winning a Guineas or a Champion Stakes. Last year Demi O’Byrne and Coolmore quietly began buying yearlings by Claiborne’s sensational young son of Danzig, War Front. Although he never raced on turf and never won a Grade 1, War Front’s first two crops showed brilliant ability on all surfaces, but especially turf, and, as usual, Coolmore was quick to act.
After the victories this year of Declaration Of War and War Command, owned in partnership by Coolmore and War Front’s owner-breeder Joe Allen, there was considerably more competition for War Front’s offspring. M.V. Magnier and company had to go to $2.5million for a beautiful War Front colt that topped the sale and to $1million for another who is a brother in blood to this year’s Grade 2 Super Derby winner Departing.
With Sadler’s Wells’ grandsons Medaglia D’Oro and Kitten’s Joy, plus Street Cry, Bernardini, War Front, and Distorted Humor, among others, obviously capable of siring top-class European runners, Americans may soon have a clearer idea of who wants to win the Arc, and how much they are willing to pay for a horse who might do it.
Extract from European Bloodstock News