The most disturbing statistic in the results for the Fasig-Tipton Florida select sale of 2-year-olds in training March 3 was the buy-back rate, which climbed past the 40% level. Making it even more concerning what that it didn't take into account the large number of scratches, many of which were the result of consignors realizing that there was little interest in their horses.
High buy-back rates are common at select juvenile auctions in general, and they are the biggest challenge faced by sale companies and consignors in market for 2-year-olds in training.
"I don't have a magic recipe," said Fasig-Tipton Boyd Browning of the problem. "If I did have a magic recipe, I would damn sure have whipped it out - or any of us would have whipped it out - at some point previously."
According to Browning, some reasons why the buy-back rate rose at the Fasig-Tipton Florida auction for the second year in a row were continued hesitancy on the part of buyers to bid in the wake of an American recession and global financial crisis and a lack of buyers in the Thoroughbred market overall.
Consignor Dean De Renzo of Hartley/De Renzo Thoroughbreds blamed the still weak economy, saying it would need further improvement before a boutique juvenile sale with fancy pedigrees could attract the number of buyers needed to reduce the buy-back rate significantly.
Another seller, Niall Brennan, said veterinarian examinations that were perhaps too strict were adding to the buy-back rate.
But even before the latest round of economic woes, high buy-back rates plagued the Fasig-Tipton Florida auction and other select juvenile sales. From 2000 to 2010, the buy-back rate at the Fasig-Tipton Florida auction reached 40% or more seven times.
Does that mean the battle to reduce the buy-back rate is one that can't be won, that buyers at the top of the market will always only interested in the very best and not the rest?
"That might be so," Browning said, "but that doesn't mean you don't try (to lower the buy-back rate), and I'll die trying You always continue to strive for improvement and continue to do whatever you possibly can to provide more depth and more buyers in every marketplace. That's part of the challenge we have in the business right now.
"There is no question that there are fewer buyers today than there were 10 years ago," he continued. "We've got to work as a whole to make the industry more attractive to get people (a) involved in the game and (b) to retain a higher percentage of them."
To Fasig-Tipton's credit, it has done something in the ownership recruitment effort, forming a racing club to attract new owners to the game.
Fasig-Tipton officials had hoped that moving their Florida juvenile sale from Calder Casino & Race Course to Palm Meadows Training Center, which is a satellite training facility for Gulfstream Park, would expose the sale horses to a group of elite trainers that were more likely to become involved in auctions. Todd Pletcher, Nick Zito, and other top conditioners have runners stabled at Palm Meadows.
If there was a positive effect in that area this year, it didn't improve the buy-back rate. But Browning said it might take several years to have an impact as trainers who don't usually buy at sales of 2-year-olds in training become more familiar with the juvenile auction process.
There is no quick and easy solution to the high buy-back rate dilemma. Meanwhile, 2-year-old consignors will cope with it the best way they can, offering bought back horses at later auctions in California, Maryland, and Florida or selling them privately after they win their first race or work well.
"Let's face it, we've all been doing this a long time," seller Nick de Meric said. "We know this isn't easy and it's not any harder than it ever is, but it's tricky. We know how to exercise damage control and when we have to do it, that's what we'll do."