A ‘Hybrid’ Keeneland April Sale: Q&A With Tony Lacy

[Wandering Eyes]

The acceleration of digital transactions brought on by the COVID-19 pandemic hasn't spared the world of horse racing from change. Just a few years ago, many people argued that Thoroughbred auctions could never be remote because of the inherent trust in the inspection process of live animals. Now, of course, auctions are going the way of the rest of the world. Keeneland introduced digital sales last year, and its Apr. 29 Horses of Racing Age sale will be what Vice President of Sales Tony Lacy calls a “hybrid” sale; mostly live, while offering sellers the opportunity to sell their horses from wherever they already are. The sale takes place on closing day of their spring meet at the conclusion of the day's racing. Not to be confused with their prior April 2-year-olds-in-training sale, there will be no breeze show, and breeding stock and stallion shares will also be accepted. TDN Publisher Sue Finley sat down with Lacy to talk about the format, and the future of Thoroughbred auctions.

Q: Let's start with some basics. Explain the format of this sale and the types of offerings you'll have.

TL: It was becoming a little apparent recently that there has been a little confusion as far as what the April sale is, because for a period of time, we had an April 2-year-old sale. And people have been asking, 'When is the breeze show?' There is no breeze show. This is not a 2-year-old sale.

The sale starts at 6:30 in the evening on the last day of the race meet. We expect will have about 75 to 100 horses. The initial entry deadline is Apr. 1, but we'll be continuing to take supplements to ensure we have a nice, even quality of quality stock that is appealing to the customer base that enjoys these sales. We're sensitive to the fact that a lot of consigners are dealing with other sales in different parts of the country during that period of time. For them to ship up a consignment at this time of the year was not practical. OBS has their major sale at that time, a lot of the consigners down there are shareholders in the company, it's important for them, and we appreciate that. So last year, we created the horses-of-racing-age sale towards the end of the meet, and we've been focusing on that synergistic feeling between racing and sales. This is a good time of the year, at a transitional time in the calendar, as owners and trainers transition from down South–from Florida, Louisiana, Oaklawn–and they're moving north. Sometimes they've got horses that they want to trade out or if they won a maiden impressively, there's an opportunity to monetize their share in that horse, or for people to restock after a winter off with conditions or stakes horses. It's a great time to do so before they do relocate up to New York, or even stay here in Kentucky, where the purse structure and the racing jurisdiction has become more powerful and more viable.

Q: You have said that you'll allow sellers to sell horses remotely. Can you explain the process and how it will work for both buyers and sellers?

TL: Yes, and we've done this before successfully. For example, there may be horses who have already been at Belmont, so we will provide video, obviously X-rays in the repository, all the scope reports, the Rags, and everything that they normally get if the horse were here. The prospective buyers can inspect them on the grounds at Belmont Park to get a physical view of those horses. I would describe it as a hybrid model, where we are able to use the online aspect of our platform, where people are able to bid remotely but the horse may or may not be here itself. So if somebody felt like they didn't want to ship the horse down, he just ran two days ago, and they'd prefer we just sell him where he is, we can still sell the horse with all of the information or all of the access as if the horse is here in person.

Q: Just a couple of years ago, people were saying that remote sales wouldn't work. You were at Arqana at the time, and they started an online sale for seasons and shares. Now, of course, Covid has changed everything. There are entirely new companies that are strictly digital. There are others like Keeneland and Fasig-Tipton that now offer a mix. Where is this going?

TL: There's definitely a space for these digital environments. We obviously have been working with it over the last 18 months or so, and we're taking a close hard, look at everything. It's a crowded market right now. But we feel strongly that there is absolutely a need for that model in the environment. I referred to the hybrid model; I think it makes people feel very comfortable when there is an inspection aspect to this. But you can you can cannibalize your activity in the digital area if you have too many of them. You have to be selective. The timing has to be right. It has to be the right group of horses, and you have to do it with purpose. And that was my experience at Arqana.

But it is certainly one that has validity going forward and we certainly will be involved in the digital arena. But we have come in here with a new team, and we don't want to take our eye off the ball, either. We want to make sure that the bricks-and-mortar core business is solid, and that we fine-tune that as we move into the future, because there have been a lot of a lot of changes over the last year since we came in here. With our size, we represent the industry. We hold the two largest sales in the world, and we also are listening to our clients. We're very much in touch with what their needs are and what their requests are, and also what the market is demanding. We're addressing this as we're going forward and everything that is being done is very calculated and it being done with our customers to the forefront.

Q: That leads me to my next question. With a shrinking horse population, how much is too much? Are digital sales just cannibalizing live sales, or are we creating more trade, or more frequent trade among the horses we have?

TL: I think there is a need for more frequent trade, and I fully embrace that aspect of it. Timing is everything. Yearlings or weanlings are a specific type of commodity that excel in an auction environment–inspections and full transparency. We're like farmers bringing crops to the market. But when I say cannibalizing, I mean that the frequency of digital sales might kind cannibalize itself. That said, it also probably facilitates a level of the market in some ways that is just regular trading. And we have found that it's a great environment with the right horse. We look forward to developing the digital aspect and integrating it into what we do already.

Q: Let's talk timing for a minute. The sale is positioned the week before the Derby and the Oaks. I'm sure that's not a coincidence. Can you imagine someone taking advantage of that optimal timing, and basically offering a place in the Derby starting gate to someone?

TL: That is key. People's demand and wish to have participation in a Derby runner is growing. There's a lot of private trade and we understand that. An auction environment is one that allows more transparency and more openness. That gets people excited, and it lends the potential for a seller be able to capitalize on this. Eight days before the Derby, they could sell a portion, 25% for example, of their horse that would allow somebody that is really passionate to get involved. And as we look at partnerships and how they've evolved over the last number of years, people are more open and willing to partner on horses and that's something that we want to embrace as well. Obviously, we have a race meeting all the way through April. Last year, there were two-year-olds who won at the meet-amazing winners that were entered in the sale.

Q: Is there anything you want to add that I haven't asked you?

TL: For any horses in the sale that are training on the Keeneland grounds, we will provide saddle pads with the hip number, so people can watch these horses train in the morning.

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