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Keeneland September: How to Gauge the New Format

Another Keeneland September sale, and another tweaked format. This year, the first catalog encompasses the first four days of the sale, with the whole catalog being of hypothetically relatively even merit and sorted alphabetically by dam as one continuous group. With only 875 cataloged, each session has just over 200 yearlings, which means proceedings won't kick off until 12 p.m., something I'm sure will be appreciated by those arriving from time zones west of Lexington. Following a break on Friday, there are another eight days, divided into four catalogs, bringing the total up to 3,908 cataloged. (View TrueNicks reports for all Keeneland September hips.)

The move to a less select and somewhat more egalitarian first group is a result of a process that has been going on for some time; it was in part responsible for the death of the Keeneland July sale and, similarly, versions of a more concentrated select September catalog. The move to taking the top 800 or so as a single group does have some downside. It's probably a little more difficult to create the type of atmosphere that the sales company and buyers might want to see when the stars are scattered over a four day period rather than into one or two days. This also creates some logistical challenges for consignors and buyers alike. Consignors have to keep fresh yearlings that by Thursday could have been on the sales grounds for the better part of a week. Meanwhile, buyers who are trying to do a really thorough job have to evaluate and compare horses spread across all four days, which will doubtless lead to more than a few "do we pass on this one on Monday for that one on Thursday?" type conversations.

That potential downside apart, the grouping of the offerings is the logical one. It's the inevitable result of something that we've been writing about for years: the shrinking gap between the best and the rest. Its basis probably stems from the fact that, after 300 years and more than 30 generations, the top-end of Thoroughbred performance has reached its inevitable plateau (or it's creeping forward so slowly that the improvement is virtually imperceptible). There's nothing wrong with this, and there was a point at which it was bound to happen. But as the best reach a plateau, the average horse continues to improve, so the gap between the best and the rest continues to narrow. In turn, that compression, along with the mega-book era, has tended to erode the status of the stallion elite. To give an example, we'd hazard a guess that of the sires of the last 22 Kentucky Derby (gr. I) winners, at least 15 were standing at $15,000 or less when the classic winner was conceived. To add another layer on the distaff side of the equation, there has been a distinct loss of "family," whether as another symptom of compression, through export, or through acquisition by non-commercial breeders. One only has to turn a few pages at random to realize that we're not seeing the dominant families that we once did. This is both good news and bad news for buyers. It does mean at the very top end you are going to pay a multiple of price for an incremental difference in quality, but it also means that the horse you purchase for $250,000 is going to be a lot less removed in quality than its $500,000 or $1 million counterpart than it would have been 30 years ago.

Of course, on top of the macro trend, we have the micro trends, primarily what has happened since the crash of 2008 and its impact on the industry. Don't forget, the mating plans for a lot of these yearlings were made in 2010, when commercial breeders were still reeling from the shellacking they took in the couple of previous years, selling into a depressed market with stock bred when stud fees were at their peak. As a result, the first catalog is overwhelmingly made up of proven horses (reflecting the post-2008 flight), and there is a distinct shortage of yearlings by stallions with first 3-year-olds and first 2-year-olds (whose first crops were conceived in 2009-10). In 2011, the market saw those "high cost of production" yearlings begin to work their way out of the system, and a rather more exciting group of horses retired to stud, headed by Blame (TrueNicks), Eskendereya (TrueNicks), Lookin At Lucky (TrueNicks), and Quality Road (TrueNicks,SRO). Those looking for fresh faces will find each of these stallions reasonably well-represented in the first book.

As far as predicting the sale outcome, September is really going to reveal how much strength in depth there is out there, and how far down the demographic scale the recovery has reached. Given the change in format, we don't actually have a direct like-to-like comparison with last year for the first week, but taking the Book 1 results for 2013 and comparing with Books 1 and 2 from last year is probably going to be a better indicator of the way the wind is blowing. For what it's worth, we'll guess at modest gains in the first week (a chance to make up ground for sellers who survived the crash and are now getting the benefit of selling into a distant market with yearlings bred on the post-2008 stud fees), with the clearance rate going up, followed by a steady middle section, and perhaps tougher going towards the end.

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