KEESEP: Pharoah Bids to Join Big Guns of ‘The Tapit Era’

[Wandering Eyes]

So let’s hear it for Hip 4538. A chestnut filly by Hampton Court (Aus) (Redoute’s Choice {Aus}). Not a bad page, actually: she’s out of a half-sister to the dual Grade 2-winning dam of a Breeders’ Cup runner-up. You’ll find her with the Vinery consignment, Barns 9 & 10.

Whether you will still have soles to your shoes, by that stage, remains to be seen; never mind whether you have somehow kept body and soul together. But whatever her future holds, on the track, she deserves at least this fleeting notice now. Because there may not be ink enough, never mind a residue of coherence, for the press to record the aspirations of her purchaser. He will literally be the last man standing.

When the gavel comes down on this filly, it will conclude the 13th session of what might—with due apologies to Man o’ War, a Saratoga graduate after all—be termed the “mostest” horse sale in the world.

Book 1 has again been tweaked, from a single evening last year to four days this time, but the point of the Keeneland September Sale is that it covers the whole spectrum. It isn’t a snapshot or a sample of the market, like other sales: it is the market. There’s something for everybody. And the sheer volume of equine traffic virtually guarantees that some golden nuggets are going to fall through the cracks.

The uniform aspect of the six catalogs reflects that democratic opportunity: each in the same dark green livery, with four identical squares front and back framing a sale graduate. The eight on Book 1 inevitably include Justify (Scat Daddy), the mould-breaking Triple Crown winner, as well as Monomoy Girl (Tapizar), Accelerate (Lookin At Lucky) and Good Magic (Curlin). Justify raised $500,000 as Hip 50 two years ago, but remember that Monomoy Girl entered the ring only as Hip 1611, and that the fillies who followed her home in the Kentucky Oaks were even later: Wonder Gadot (Medaglia d’Oro) as Hip 2121, and Midnight Bisou (Midnight Lute), unsold for $19,000, as Hip 4015.

So the rewards are there, if your hard work is matched by equal luck. Because the big shots will have left town long before that Hampton Court filly leaves a lonely back ring.

To most of us, the sale will sooner take its tone from the very first lot: another filly, foaled six days after the one by Hampton Court—but a galaxy away in terms of expectation. For Hip 1 is the first of a staggering 66 yearlings by American Pharoah (Pioneerof The Nile) accommodated in Book 1, with another 15 listed later.

That is no less a presence than anticipated by those who paid a $200,000 covering fee for the first Triple Crown winner since the 1970s. So far he has processed 15 yearlings, from 17 offered to date at Saratoga and elsewhere, at a clip of $643,605. (Even the two who went home stalled at $800,000 and $495,000, respectively.) But to maintain those kind of returns, in such concentration, looks a lot to ask; certainly those who think they can afford one should not have to go home empty-handed.

However he gets on, American Pharoah has already altered the dynamic at the top end of the market. While the proof of the pudding naturally awaits, on the racetrack, for now he has barged his way straight into the midst of the supersires who increasingly dominate the bloodstock economy. At Fasig-Tipton’s Select Sale in Saratoga, for instance, American Pharoah had a filly and colt join three yearlings by Medaglia d’Oro (El Prado) in carving up the five seven-figure lots.

Medaglia d’Oro, of course, has long since earned his stripes in his second career, seven individual Grade 1 winners last year spiking his fee—at the age of 19—from $150,000 to $250,000. He must make do with 48 Book 1 hips.

As proven big hitters of that ilk gain in stature, of course, so they tend to be used by more of the top owner-breeders. Perhaps that contributed to the defections and RNAs that brought down Tapit (Pulpit) sales to 17 last year, from 31 in 2016. Nonetheless only 51 yearlings from the final crop of Scat Daddy (Johannesburg) were sufficient to deny Tapit top gross of the sale, and he was clear even of War Front (Danzig)—whose books, still more carefully managed, will always see him major in quality rather than quantity—at the head of the averages.

The rise of Tapit has, in fact, been coterminous with an era of growing commitment to the elite cadre. Back in 2010, when his first runners had consecutively raised his fee from $12,500 to $35,000 and then $50,000, the Gainesway sire ranked #18 by gross here, shifting 29 yearlings at $126,310. Just behind, in 20th, was Medaglia d’Oro who sold the same number at $108,172. For most buyers, that proved to be the last train out of town.

The following year, Medaglia d’Oro (with 14 more sales) just edged out Tapit at the top of the list; but it has since been Tapit nearly all the way, #1 five years running until his clear second to Scat Daddy, with mitigation already noted, in 2017.

Take out War Front, and Tapit’s average more than doubled any other sire at the last two editions of this sale. In 2014, his $21,725,000 personal turnover exceeded the combined sales of the next two in the list, Unbridled’s Song (Unbridled) and Bernardini (A.P. Indy). In fact, Tapit’s aggregate here since 2011, now past $112.5 million, represents 6 percent of all September business in that period.

As such, he has done much to intensify the market’s devotion to the same few sires. As this table shows, since he became a perennial presence in the top two, the top six sires at each September Sale (by gross) have consistently accounted for around a quarter of overall business, creeping up towards 27 percent in the last two years from 22.6 percent in 2012. But the transactions required, to do so, have diminished in the same period from 9.1 percent of hips sold to 7.5 percent.

And there has been a corresponding increase in the average docket, for a top six sire, relative to the overall sale average—up, last year, to a factor of 3.56 from 2.73 in 2011.

This is a trend that might have faltered with the disappearance of Scat Daddy, but the farm that lost him is trusting American Pharoah to step straight into the breach. And we can still expect a strong play from all the other usual suspects, with those bubbling under including Uncle Mo (Indian Charlie)—likely to prove a big factor with a crop produced from 256 covers. He edges out even American Pharoah with 67 in Book 1, with another 38 to follow thereafter.

It is also easy to picture Uncle Mo’s replacement as the nation’s busiest sire, Into Mischief (Harlan’s Holiday), reaching yet another milestone with a first $1-million yearling. The Spendthrift phenomenon got within a bid at Saratoga, with a $950,000 filly, and has 39 listed in Book 1 (and four dozen to follow). Even off his lower fees, Into Mischief has moved on more September stock than any other sire over the past two years, 105 changing hands.

Given the appealing group of freshmen flanking American Pharoah, notably the ticks-all-boxes Honor Code (A.P. Indy) with 41 Book 1 hips, overall it looks like a sale well equipped to deal with the loss of its premier sire last year. And, of course, it has a following wind.

With wealth still lavishly sustained by fiscal instruments originally deployed to relieve an economic emergency, the bloodstock market continues to make hay: Fasig-Tipton’s collective turnover on yearlings this summer, between the July Sale and the two at Saratoga, climbed 18.4 percent year-on-year.

It was interesting, admittedly, that the elite spenders were prioritising fillies at the Select Sale. As observed at the time, that was possibly just a coincidence—but it might equally indicate that those who have profited from a decade of quantitative easing, observing a political environment somewhat less stable than the economic one, are pondering more sustainable commercial options for their Turf investment in the medium term.

It should also be noted that expanded catalogs led to a slippage in clearance at Fasig-Tipton, to below 60 percent collectively. But how reliable a weathervane are its summer sales for Keeneland September anyway? After all, a major contributor to their growth has been the New York sale, which has mirrored a local boom nourished by gaming, not to mention a vintage summer on the track. Nonetheless let’s compare the two houses’ year-on-year performance in the post-crash yearling market.

It is noticeable that each made its big recovery two years apart—exactly mirroring the way they first absorbed the financial crisis of 2008. Keeneland September collapsed through the floor in 2009, from a $328,194,100 gross in 2008 to $191,859,200. Yet Fasig (buoyed by a recent change of ownership) pulled off its second highest Select Sale ever in 2009, and mustered $77,731,000 of business across the three sales—only to plunge to $54,605,000 in 2010.

As you can see from this table, however, Keeneland September in turn staged its rally two years ahead, posting a 27.7 percent gain in gross for 2013; Fasig’s big jump, at 30.3 percent, came in 2015. (Both firms anticipated the direction of traffic with expanded catalogs, but it will be noted that growth considerably outstripped that impetus.)

On that basis, the post-crash landscape can only be said to have settled evenly between the two over the past two years—and the market has behaved very similarly in both. Fasig’s summer average dipped 5.3 percent in 2016, for instance, and September’s by 4.7 percent; Fasig’s gross climbed 13.8 percent in 2017, September’s by 12.1 percent.

If that trend is to continue, then the giddy numbers achieved by Fasig-Tipton yearlings this summer would have to be matched by some fairly historic activity at Keeneland this week. Somehow—not least in view of the much queasier start to the European sales season, especially in Keeneland “week two” territory—that seems a tallish order.

Down in the cellar, after all, interest rates are stirring. A couple of emerging markets have rapidly turned into submerging ones. And investors of any political shade may feel unnerved that prosperity should be harnessed, globally, to those erratic, runaway ponies: nationalism and populism.

Like the stock market one, the bloodstock bull run can’t go on forever. And if the breathless tempo of Fasig-Tipton’s summer happens not to be maintained this week, then it wouldn’t be the only time Keeneland’s barometer has been first to reflect a change in the weather.

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