Bill's Columns

We live in strange times. Among the innumerable things we couldn’t have predicted about the year 2020, you wouldn’t have thought being forced to conduct the world’s first premier yearling sale on-line, with no horses or buyers in the sales pavilion, would have marked international recognition that Australia has arrived as the fourth world power in international thoroughbred racing, in spite of the six-month tilt to the calendar due to being in the Southern Hemisphere. But it did: absent Arrowfield, its biggest consignor, and a few others mostly from out-of-state or New Zealand, Inglis’ on-line Easter Yearling Sale succeeded in enabling Australian breeders to sell, and not at particularly discounted prices either, under adverse circumstances to put it mildly, some of the best-bred yearlings in the country at the end of a sales season which had already seen over A$400-million in yearlings change hands.

Last year, 349 yearlings (a remarkable 77%) from a catalogue of 450 at Inglis Sydney Easter grossed A$123,375,500 and averaged A$353,511, according to sales company figures. On April 9 the sales company’s website listed 223 yearlings sold, grossing A$69,890,500, an average of A$313,410, with a median of A$250,000. With Arrowfield and the other consignors out, the drop in gross is immaterial, but we had speculated they’d be doing well to record A$50-million in sales through the ring; they did A$70-million, 40% above our ‘guesstimate’. With only a 12% drop in average (some predicted 40%), and a 4% drop in median (from A$260,000 to A$250,000), it’s a great tribute to the entire Australasian industry – Inglis, and the consignors, agents, trainers, and buyers – that they pulled it off. Personally I hope this isn’t a template for future major sales, but in current circumstances it was a huge triumph. According to figures supplied by the sales companies and Australia’s Bluebloods magazine, my team’s Brianne Stanley calculates the corresponding yearling sales had jumped from A$465m in 2017 to a high of A$534m in 2018, then dropped a fraction to A$513m in 2019. Even with over $50m knocked off the Easter Sale compared to 2019, we calculate total Australia and New Zealand sales have reached A$477m in 2020 – actually above the 2017 total. If we were able to add in private sales from Arrowfield and other consignors who were forced to scratch out of the Easter catalogue, this year’s figure would surely reach A$500m.

Up until the last few years, the level of Australian racing, outside of sprinters, coupled with the six-month calendar factor, meant that while Australian racing was respected as the clear leader among Southern Hemisphere racing countries, it still wasn’t really thought of as being truly world-class. Besides being the first country in the world to have a sales company adapt to an on-line only format for one of the world’s five best yearling sales – making them the world number one in that category - there are three other factors which, in my opinion anyway, explain why the international thoroughbred industry no longer thinks of Australia as just as the best in the Southern Hemisphere but a true world power.

Number one is prize money. There were 60 races worth A$1-miilion or more scheduled for this season (some have been reduced, or lost), and the ordinary Saturday prize money in New South Wales and Victoria is staggering. North America has reasonable prize money – not as good as Australia (though the Australian dollar is weak right now) – but most of the top racing is on dirt, which is not really relevant to much of the rest of the world’s best racing. Europe has great racing but shocking prize money, while Japan has great prize-money but is not really ‘open’ racing, whereas Australia definitely is open to all comers, with welcoming arms.

If you just flip through one of the sales catalogues you’ll routinely run across Listed winners who have made A$600k and winners of two or three races who have made A$200k-$300k. Between the prize-money and the A$10m-$30m ‘home run ball’ ownership groups can win when they get that G1-winning 2-year-old or top sprinter by one of the premier sires, it’s no wonder American outfits like Stonestreet, Spendthrift, and prominent buyer Jon Kelly, as well as the Yoshida family from Japan are now in Australia, as well as European-based operations like Coolmore and Darley who have been there for years.

Second is the influx of European expertise. Peter O’Brien (Segenhoe), Shane McGrath (Aquis), and Sebastian Hutch (Inglis), for example, are all Irish imports who started at Coolmore in Tipperary so don’t blink at operating on a world stage. Same for a certain Tom Magnier. Coupled with a lot of homegrown talent, including New Zealanders who moved over, there is now nearly a whole generation of Australasian horsemen and horsewomen who take everything in their stride, including, in the last few months, drought, bushfires, and Coronavirus. They’re a tough, world-class lot.

The influence of European racing in Australia is by no means restricted to the people; there is a big market in Australia for European racehorses who stay 9 furlongs-plus. The quirk of the Australian racing temperament is that they are mad about speed and precocity, to the point where it has created a huge gap in the market which has been filled by European horses. A recent study by myself and my colleague, Dr. Emily Plant, established that 38% of the Black-Type races in Australia since August 1, 2015 have been at what we classify as ‘short’ distances (<1200m for 2-year-olds, <1400m for 3-year-olds and up), but they run for just 28% of the stakes money. Conversely, 27% of the stakes races are run at ‘long’ distances (1400m+ for 2-year-olds, 1700m+ for 3-year-olds and up), but for 39% of the stakes money. As top sires like Snitzel, I Am Invincible, Exceed And Excel, and now Zoustar all have 70%+ ‘short’ SW, there are big earnings opportunities for European horses to make money, which is something they can’t do nearly as well in Europe. It’s very interesting too, though, that three of the four top younger sires in Australia – Pierro, Dundeel, and So You Think (the fourth is Zoustar) – are siring top horses at intermediate and longer distances, which means these sires do have the potential to have runners which challenge the Europeans at the longer distances.

The third element in Australia’s ascendancy to first-world class racing is Asia, from two angles: the supply of racehorses to Hong Kong, Singapore, Macau, and now, increasingly, China; as well as the investment in racing and breeding in Australia and New Zealand by Asian investors. The Hong Kong Jockey Club and Hong Kong’s Legends Racing were the second- and third-leading buyers at the Easter sale; the China Horse Club was active as both leading buyers and sellers; Aquis Farm, one of Australia’s biggest and most active operations, is owned by a Hong Kong family; and there are Asian owners of farms and investors in racehorses all through Australia and New Zealand.

One of the features of racing in Asian countries is the high prize money. Australia has high prize money but not the restrictive ownership as in much of Asia, so regular people have a chance to make money racing horses. Coupled with a vibrant secondary market led by Hong Kong and the contribution of Asian investment in Australia’s domestic racing economy, it’s easy to understand why Australia really has ascended the ladder and deserves to be regarded as a new ‘first-world’ power in the international racing industry; and the success of Inglis’ Easter auction, forced online, demonstrates it. It’s like when the official stamps your passport, and hands it back to you: go right through, the door is opening.

Through the end of the Easter Sale, The Bill Oppenheim Group’s Brianne Stanley calculates that 3,443 yearlings have sold in Australasia this year, for an average of $138,711 (see www.billoppenheim.com/wst for the five-year yearling sales summary table). According to Blood-Horse calculations, 22 sires have averaged A$150,000+ with 10 or more yearlings sold throughout the sales season, of which six have averaged over A$300,000. Number one by both gross and average is Yarraman Park Stud’s I Am Invincible, who has had 82 yearlings sell for a total of $37.7m and an average of $460,232. He has been runner-up to Snitzel for Champion Sire the last two seasons, and is number three on the list this season, at this writing, to Snitzel and Pierro; but ‘Vinny’, as he is known, does have the distinction of having set the new record for Australian SW in a season (28) in the 2018-19 season.

The next five slots by average are occupied by Danehill’s three best sons and two grandsons by his best son, Arrowfield’s Redoute’s Choice. He is #2 by average, with just 10 yearlings sold at auction for his second-last crop averaging $443,500; his sons Snitzel (70/$358,766) and Not A Single Doubt (51/$305,657) rank fourth and sixth – though all three would no doubt have higher averages if their Arrowfield Easter yearlings, which will be sold privately, had been sold through the ring, since the Sydney Easter Sale has the highest average of all Australasian yearling sales. Darley’s Exceed And Excel (38/$367,627) and Coolmore’s Fastnet Rock (45/$319,092), both themselves top sons of Danehill (they will be 20yo and 19yo respectively on August 1), rank third and fifth by average so far.

Three first-year sires have posted averages of A$150,000+, shuttlers American Pharoah (ranks #7 overall, with 53 yearlings averaging $257,929) for Coolmore and Shalaa (#18/58/$168,259) for Arrowfield, plus Newgate’s homegrown son of Written Tycoon, the 2016 G1 Golden Slipper winner, Capitalist (#19/92/$167,967). Newgate and Arrowfield also have the next two by average, Newgate’s dual G1 winner Extreme Choice (33/$138,853), by Not A Single Doubt, and Arrowfield’s crack Japanese miler Maurice (38/$121,809). Darley stands two shuttlers who have achieved six-figure averages in Territories (12/$114,404), like Shalaa by I Am Invincible’s sire, Invincible Spirit, and Frosted (19/$101,411), a top son of three-time Champion US sire Tapit. And no fewer than nine other Australasian first-crop sires have averaged over A$80,000: Vadamos, Divine Prophet, Cable Bay, Astern, Tivaci, Air Force Blue, Star Turn, Winning Rupert, and Xtravagant.

Coolmore stands the top three second-crop yearling sires by yearling average: Leading Freshman Sire Pride of Dubai, by Street Cry from the family of Invincible Spirit, tops F2017 Australasian sires with 54 yearlings averaging $149,722, with 2018 Leading European Freshman Sire No Nay Never (32/$112,732; also has a very successful crop of 3yo’s in Chile) and 2015 G1 Golden Slipper winner Vancouver (59/$110,272), by Medaglia D’Oro, also registering six-figure averages. Darley’s Kermadec (Teofilo) and Exosphere (Lonhro), Vinery’s Press Statement (Hinchinbrook), and Arrowfield’s Real Impact (Deep Impact) have also averaged over A$75,000. Top F2016 Australian sire by yearling average, with first 3-year-olds racing and third crop of yearlings selling, is Newgate’s Deep Field (52/$163,143), by Encosta De Lago’s son, Northern Meteor. Darley’s Brazen Beau (35/$141,622), I Am Invincible’s first good son from his first crop, ranks second in this group by yearling average, with Victoria’s Swettenham Stud’s shuttler Toronado (15/$101,945), by High Chaparral, third. Hallowed Crown (Street Sense), transferred from Darley to Olly Tait’s Twin Hills Stud just in time to score his first G1 winner with Colette in the April 11 G1 Australian Oaks; Coolmore’s leading second-crop sire Rubick, by Encosta de Lago and sire of the 2019 Everest winner Yes Yes Yes; and Darley’s Shooting to Win, a full brother to Deep Field, have also averaged over $65,000 at the 2020 Australasian yearling sales to date.

For more articles by Bill Oppenheim, APEX ratings, and Brianne Stanley’s Worldwide Sales Ticker, please visit www.billoppenheim.com. Twitter @billoppenheim