Behind the Sale - by Dan Liebman

It takes only a minute or two to sell a horse at public auction. The animal is led into the ring, the announcer makes a few comments, the auctioneer rattles his chant, and the hammer falls.

Simple. Easy.

Not exactly.

In 2002, The Blood-Horse presented “A Day in the Life of a Racetrack,” followed in 2005 by “A Day in the Life of a Breeding Farm.” For this issue, writers and photographers spent time “behind the scenes” with the people responsible for putting on a single day of the Keeneland November breeding stock sale.

Of course, those same people are responsible for all 15 days of the auction, and for many, their work begins months before the first horse is led into the ring.

And they are there in good times and bad, which doesn’t necessarily refer to whether the market is up or down. Sale company officials and employees perform their functions for one-day sales and two-week auctions, for short sessions and lengthy ones, under sunny skies and in inclement weather, with million-dollar horses and thousand-dollar ones, as well.

So far this year, more than 17,000 horses of various ages have been listed as sold at auctions in North America. That doesn’t just happen. Many people make it happen.

There are those you see, like the bid spotters, and those you don’t, like the office staff. There are those who work outside—unloading the horses, clearing the muck, and scooping the poop. There are those who work inside—running the repository, cooking and serving the food and beverages, working the bid board, and cleaning the bathrooms. There are those who don’t work for the sale company—attorneys, advertising agencies, and vanning companies.

Sale company officials often refer to themselves as simply the conduit by which a horse passes from seller to buyer. They represent both parties in the fair trade of stock. Well, these are the men and women who help the sale company fulfill that mission, working on behalf of both consignors and buyers hoping all go home happy, although knowing that at any sale, there is no way everyone will walk away happy.

Just like selling cattle, corn, or soybeans, the sale company provides the arena for the Thoroughbred breeder to bring his product to market. Yes, the sale company is motivated by a big incentive—its commission—but it relies on repeat business, so service is everything.

More than 20 sale companies have conducted auctions in North America this year, with varying degrees of success, differing levels of stock, and various numbers of employees. But the bottom line is the same, and that is to sell horses.

Everyone knows the breeding of Thoroughbreds has become more commercial, with seemingly more persons wanting to sell a horse than race a horse. That is why Keeneland, the biggest Thoroughbred sale company in the world, cataloged record numbers this year in September and November. However, large catalogs in a time of a global economic downturn translated to significant decreases in business and many horses left unsold or worse—unwanted.

How quickly has the economy turned?

Well, a feature conceived a year ago on a behind-the-scenes look at a Thoroughbred sale ended up occurring at a sale that saw huge decreases in business. That, however, only better helps illustrate that sale companies do not determine the market. The men and women that help breeders bring their crops to market are bright, cheery, and helpful whether the gross, median, and average are up or if the gross, median, and average are down—way down.

At Keeneland during the November sale, company officials were also working on the January and April 2009 sales.

There is always the next sale, and the people behind it.

4 Comments

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Bellwether

UNWANTED HORSES & HUMANS???...they seem to stick together on the backside...Long Live The King!!!

26 Nov 2008 1:21 AM
Thor

Unwanted Horses-Wait until the December Mixed Sale in Maryland next week.  Check out the entries.  Nine foals and 3 to race, no winners. She is actually in foal to a stallion that is unknown in any market.  NO BID, not RNA(1000).

29 Nov 2008 4:56 PM
STEVE STONE

Hello Dan...Another interesting and informative op-ed piece..Your last line in the final paragraph sums it all up.."and the people behind it"..Unquestionably speaking it takes indefatigable efforts of an entire staff inorder to bring any product to market..These efforts must be choreographed precisely in order to reach snyergy as the end user is only concerned and interested in the final product..not the machinations that goes into producing it...Just the product...This occurance transcends all fields..including the myriad thoroughbred sales both nationally and globally and as you noted correctly..whether the sale is or are successful or unsuccessful..... the same effort has to be woven into the presentation.. The disadvantage in thoroughbred auctions is that its just that..an auction..where bidding dictates the price of the commodity(unless an reserve is established prior) vis-a-vis fixed price points in an non-bidding scenario where the back room construction of the items costs are factored into the final products and price points are established...If you take all of what you noted in your op-ed piece...the sales company would have to establish an immediate minimum of X dollars in order to recover the expenses involved  just to bring the auction to market..In this economic environment..it would be an impossible task..even when the markets do indeed rebound..at somepoint in the future...the

"behind the scenes" efforts are all part of the overall presentation and just have to be absorbed..Part of the process of doing business...Thank you again Dan for your kind window..Regards..Steve Stone..East Hanover..New Jersey..

30 Nov 2008 12:06 AM
Robert Lees

Yes the sales companies do an excellent job of conducting the sales, however before we fall off the edge of the cliff while hanging on to the pom pom's that you have put in our hands in.... place of parachutes let's examine a few of the cheers?

First most of the people you refer to feel little to nothing in severe market turn downs!

1) The people that prepare the food "sell it to their customers at the sale for significant profit margin" they don't give it away! Lets see--- no suffering here!

2) The lawyers that you refer to -continue to send out bills that for the most part are excessive for what they do despite poor economics or sale ROI's! Hmmmmm they don't appear to be suffering much?

3) The consignors take 5% commission for managing an entry to the sale over a "two day period". The yearling entry comes totally prepped and for the most part show ready after many months or so of preperation by the the farm that raised it out, leaving little to do but walk it in & out of it's stall for two days by sales staff! Not bad for two days hay & feed and a little brushing & wiping! Remuneration could be deemed a little excessive considering the economic downturn at the sales?  hmmmmm not much suffering here?

4)Advertising companies... again out goes the bill in comes the cheque.

5) Vanning companies? Well lets see the owners or the farms handling their stock aren't going to walk them to the sale grounds so.......out goes the bill in comes the check?

Lets see ....... oh yes my favorite's!

6) The veterinary process?....... Pardon me if a long lull has just taken place, but I just passed out from fright when I started thinking about these costs once again absorbed by the owner over the past year? Once again out goes the invoice in comes the cheque! I am not going to dwell on this, but it should be said that once a horse has been scoped for a sale the only time it should be re-scoped is after the fall of the hammer where the choice & responsibility lays with the new owner. Surely the sales companies could implement policy to get this under control, after all you can't expect support from the veterinary community on this....they are the masters of the invoice out cheque in practice and would not do anything to endanger or inhibit their income generation.

So lets see we have taken a quick look at some of the support mechanisms that you referred to except perhaps one? Lets call it number seven?

7) The owner or breeder/owner. First they initiate the cost of breeding or purchasing a weanling then they absorb all costs to bring it to yearling sale status then they are given an invoice for sale entry, usually one thousand dollars, then the standard sale veterinary invoices, then the consignor 5% invoicing for his two days work and any other related shared fees etc. then they are given another 5% commission fee by the sales company for their efforts for two days, and after all is said and done the owner is rewarded with well lets see "whatever's left".

The point here is that everyone is feeding off one individual "The Owner" and if the consignors & sales companies wish to continue thier feast then maybe it's time they became pro-active in supporting the hand that feeds them! Like a reduction in commission fees from 5% to say 3% a reduction in sale entry fees from 1000 dollars to say 600 dollars? If they continue to suck the life out of the industry they will indeed get what they asked for an industry that is reduced to only a handful of players..."The sport of kings Indeed"    

30 Nov 2008 11:59 AM

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