Bill's Columns

In most years, we are able to assess the rise or falls in the thoroughbred marketplace from mostly internal factors, though sometimes modified by external economic factors, often reflected by indexes such as the Dow-Jones Industrial Average. This year, however, as everyone is aware, changes in the thoroughbred market are reflecting almost entirely external factors completely beyond the industry’s control.

With the loss of Fasig-Tipton’s Gulfstream Park 2-year-old sale, which last year posted an industry-wide top 2-year-old sale average of $493,475 (though admittedly with only 59 horses sold, just 31.5% of the 187 originally catalogued) and the delay to this year’s OBS Spring Sale, usually held in April, understandably OBS made room in their delayed sale for some of the horses which were catalogued for Gulfstream this year; others will be selling in the Fasig Mid-Atlantic Sale now scheduled for June 29-30. Fortunately for the purpose of analysis, the supplemented horses were readily identified as distinct from those in the original catalog. This enables us to measure the true decline in at least this auction market, given that a certain number of horses catalogued to either sale will have been sold privately. We have no way to measure how many of those there were, nor how they might impact the actual auction figures if we knew their selling prices.

Figures published on the OBS website report 635 horses sold last week (OBS updates with private sales, so their figures will sometimes change almost daily for a few days after their sales), which was 48.3% of the total (including supplements) 1,315 catalogued; the overall gross was $58,905,000, for an average of $92,764. The gross was down 19% from last year’s total of $72,945,000, the average down 14%, from $108,227. But wait: the addition of the supplemented horses means that comparison is not apples-to-apples (see accompanying table). Here’s why.

As noted above, the Gulfstream Park sale averaged $493,475 for 59 sold (just 31.5% of those catalogued) last year. While no doubt all of the OBS supplemental horses did not come from this year’s Gulfstream sale, the results for the supplemented horses at OBS Spring are pretty striking: 84 catalogued, 31 sold (36.9%), gross $11,339,000, average $365,774. If we compare those figures, for discussion purposes, to, let’s say, half the Gulfstream sale last year, those would be 29.5 sold, gross $14,557,500, average $493,475. The 31 supplements sold last week grossed $11,339,000 (-22%) and averaged $365,774 (-26%).

The original, main catalog for OBS Spring consisted of 1,231 horses, a marginal 1% increase from the 1,221 catalogued for OBS Spring 2019. Of those 1,231 catalogued, 604 sold – 49.0% of those catalogued, which seems pretty good under the circumstances, and was only a 6.2% decrease from the 55.2% sold/catalogued in 2019. These 604 (10% fewer than 674 in 2019) brought a total of $47,566,000 – a decrease of 35% from last year’s $72,945,000 gross – and averaged $78,751, a 27% decline from the 2019 average of $108,227.

With two groups of data, one showing a 27% decline in average, the other a 26% decline, I’m inclined to propose that is a more accurate reflection of the market than the 19% and 14% declines from ‘entire sale’ to ‘entire sale’. Based on that analysis – separating this year’s sale into two different but easily identifiable sectors – I feel confident in suggesting the sale was, in practical terms, down 27%.

What does a ‘real’ 27% decline at OBS signal for the future? The crystal ball hasn’t told us that yet, it’s very foggy. The two-year-old market has too few numbers to be able to reliably measure declines by market tiers, which is the crux of the question for many sellers. But if that 27% happened to prove to be a market barometer, a lot of consignors would probably be happy enough to project 2020 revenues at those levels – they’d ‘take’, for example, a 25% decline. We’ll have a better idea after Fasig-Tipton’s Mid-Atlantic sale at the end of the month, when we’ll be able to total up the 2-year-old auction marketplace and compare it from the end of last May to the end of this June. Stay tuned.

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