How Not to Buy a Horse at Auction

In the world of commerce, nothing could be more colorful and fascinating than an auction of Thoroughbred horses.  For instance, at Keeneland in Lexington each fall for almost two weeks, around 4,000 horses are sold, and people come from all over the world to pay prices that cause the average to be in the neighborhood of six figures. Every two minutes an enormous drama for a new cast of characters plays out. We in the horse business take all of this for granted, but the machinations of the auction scene are truly staggering.

I bought my first horse at public auction in 1967. She cost $900. I have been buying them steadily ever since—in Kentucky, Florida, New York, Maryland, California, England, and France. Dogwood has bought maybe 1,800 horses for its partnerships and spent a couple of hundred million. I doubt that any outfit has been that steady for that long.

For 48 years I have arrived at every auction in a state of excitement; and I have left in a state of exhaustion and relief. At public auction, I have bought a Preakness Stakes (gr. I) winner (Summer Squall) winner, and a Belmont Stakes (gr. I) winner (Palace Malice) and many, many others that could not outrun a fat man going uphill.

But, speaking of drama, few auction purchases could compare to the "bad news-good news" Dogwood brouhaha of 1988.

In the eighties, the most popular stallion in the world was Northern Dancer. His yearlings were bringing astronomical prices, averaging well over a million dollars. At a sale (which shall be nameless) I bought a lovely Northern Dancer colt for $1 million. Though the price scarily exceeded my comfort zone, I was overjoyed. I knew I could walk through that pavilion one time and syndicate him for probably $1.2 million, so great was the demand for Northern Dancers as racehorses, and so extraordinarily high was their residual value as breeding animals no matter what their race record. I was really flabbergasted when the auctioneer knocked him down to me because the Arabs (and other heavy hitters) were in an absolute feeding frenzy for sons of the great stallion.

The attendant brought me the sales slip to sign. I did. He then gave me the yellow receipt, which I stuck in my pocket, while people congratulated me and the always continuous sales pavilion murmur increased markedly in volume over this surprising sale.

The next horse was in the ring when the auctioneer suddenly intoned, "Ladies and gentlemen, there has been a dispute in the bidding over the last horse, and we're going to reopen the bidding."
At this point, losing my cool (with damned good reason, I still feel), I held my receipt aloft and yelled out, "How can there be a dispute? Here's my receipt for the horse!" Now the entire pavilion was deathly silent. The announcer proceeded to read aloud a pertinent condition of sale..."the auctioneer shall have the right to adjudicate any disputes arising from the bidding."

What had happened was that the team of one of the major Arab buyers was inexplicably "asleep at the switch." Maybe they were expecting that it would take more time for the bidding to get to the neighborhood where they would jump in and get serious. At any rate, they got shut out, and I "bought" the horse. This was the "dispute." So the bidding was reopened.

The Arabs bid $1.1 million. I upped it $50,000; they went up another $50,000 and got the horse. That was the "bad news."

Understandably, sales companies do not like to (1) leave money on the table, and of much greater importance in this case, (2) they are loathe to irritate Arab buyers. I think the auctioneer simply overreacted and went impulsively beyond the bounds of acceptable judgment.

After stalking dramatically out of the sales arena, I quickly saw that the most practical recourse was to calm down. If I sued, the horse would have been tied up legally until he died of old age, and I had little to gain by rupturing my longtime relationship with the sales company involved. I think its officials knew they had—in the heat of battle—blown it. However, they could hardly admit this (because of legal action possibly being taken). They later wrote me what was close to an apology. The press had a field day with the incident. I must say, I did rather enjoy that!

What was the "good news" in this equation? The horse never won a race.

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