LEXINGTON, Ky. – “It was all right,” Keeneland vice president of sales Tony Lacy quipped with a shrug.
Then he smiled.
“No, it was incredible. From the moment the gates opened, as an analogy, it went 21 flat from the gate.”
It could sprint and it could stay. Buoyed by several factors in the world at large and within the racing industry, the Keeneland September yearling sale, considered a bellwether for the North American Thoroughbred industry because it tests the market at many levels, wrapped up its 82nd edition on Saturday with double-digit gains that established records for gross, average, and median.
“We felt positive coming into the sale,” Lacy said, referencing strong summer racing and early-season sale results. “We had a lot of great metrics. It felt like the energy was building up, the enthusiasm. The credit applications were very strong. They were coming in early.”
Keeneland reported 2,904 yearlings sold over 12 sessions - divided into five books, based on the horses' perceived quality - for gross receipts of $510,544,900. The sale, which passed its midway point with a record gross already assured, surpassed $500 million in gross for the first time. At the 2024 September sale, 2,735 horses sold over 12 sessions for a then-record gross of $411,749,500.
For an apples-to-apples comparison, both sets of figures include only horses sold through the ring, not yet accounting for private sales on the grounds that will ultimately be factored into official results published in Keeneland’s media guides and other official records. As of Saturday morning, more than 160 yearlings had changed hands after failing to meet reserves in the ring for more than $20.9 million that will ultimately be added to the gross record.
Since private sales are tallied until horses leave the sale grounds, and horses must leave the grounds within 24 hours of their trip through the ring, more sales could still be in process from the Friday and Saturday sessions. Last year's sale ultimately had 159 private sales for gross receipts of more than $16.3 million.
A total of 55 horses sold for seven figures through the ring, compared to 30 last year. Both sets of figures discount one seven-figure private transaction. That shatters the record for seven-figure horses at a September sale, eclipsing the 40 during the 2005 sale, in a strong market prior to the recession of 2008. While the majority of seven-figure lots came in the upper-market Book 1 and Book 2 sections that opened the sale, a trickle-down effect lit up the bid board later in the sale as well.
The fifth overall session of the sale, the opener of Book 3, featured multiple seven-figure horses, led by a $2 million Into Mischief colt. According to Keeneland, he was the most expensive horse ever sold in a fifth session of the September sale. The last times a horse reached the seven-figure threshold as late as the fifth session came in the 2018 and 2019 editions of the sale. Both times, the fifth session came in Book 2, as the sale format has changed over the years.
With those headliners at the top, buyers had to stretch to a cumulative average price of $175,807, clearing the bar by 17 percent from last year’s previous high-water mark of $150,548. The median, considered a key figure for market health because it samples a wide swath of the activity rather than being influenced by the top prices, was up 14 percent for another record, to $80,000 from $70,000.
The buyback rate, also considered a key metric, was 22 percent, compared to 23 percent last year.
“It comes down to the median and the RNA rate,” Keeneland senior director of sales operations Cormac Breathnach said. “When you really look at the health of the sale, top to bottom, the median is the middle market, the median, across the sale, is that measure. If you have a healthy median, or improving median, as we do this year, and an equal or better clearance rate, that’s as good an indication of the health of the market as any other, or better than any other.
"Ultimately, the averages and seven-figure horses are great for headlines, and they do create that excitement that’s an important part of all this. But looking at things like ROI and what money is going into breeders’ pockets, how many horses are they having to bring home, those are the things that we [look at].”
Many pointed to changes in the tax code as a major influence in the sale’s gains. Earlier this year, Congress, in a highly partisan vote, approved a sweeping tax-and-spending bill. Included in the bill were provisions favoring several business segments that may include Thoroughbred owners. The bill provided 100 percent “bonus depreciation” to classes of assets including sport or breeding horses, allowing buyers to write off the up-front cost of a horse in its first year, and contained language expanding the definition of the types of horses that are eligible for bonus depreciation.
The tax bill also allows business owners to offset losses from one business to any other business, meaning that the owner of a profitable business can use losses from a racing operation to offset the tax bill of the main business.
“Not to talk politics, because it's not about one side or the other, but the bonus depreciation, the tax advantage, it can't be overstated what kind of stimulus that is for the horse business,” said John Sikura, whose Hill ‘n’ Dale Farm co-bred and consigned the sale-topping $3.3 million Gun Runner colt. “Wealthy people who are taxed at source looking to write off 100 percent of their expenses – all of your expenses, all of your insurance, and then in the breeding business, all our stud fees. It is permanent, so we can plan for the future. It's a great stimulus on a high-risk speculative venture like this. Essentially half of your losses can be covered legitimately in an active tax code. It's a great incentive.”
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Buyers and consignors found other reasons to point at for the enthusiasm in the bidding as well. Purse structures are healthy in many racing jurisdictions – including Kentucky – and, while the shrinking foal crop continues to be of concern for the industry, one effect is fewer horses running for more money. Several times, a recent Netflix series highlighting the 2024 Triple Crown series was also mentioned as a factor in bringing interest to Thoroughbred racing, helping to fuel new ownership and a diverse buying bench.
“Everybody says there’s so many problems with the business, but there’s also a lot of enthusiasm,” said Hunter Rankin, breeding and racing president for Flying Dutchmen, which bought 10 horses. “I think there’s a lot of new people here. There’s a lot of people here that I don’t recognize, which is great. And you know, obviously it’s hard when you’re trying to buy against all of these people, but in terms of the health of the market, it’s great. I know there’s tax things and everything else, but I don’t think it’s just that. I think there’s genuine interest, genuine new interest with the business.”
Lacy opined that the tax code was not as much of a “major factor” in the second week of the sale, with horses selling for more modest prices. He pointed to genuine interest in Thoroughbred ownership, boosted by expanded coverage on networks such as Fox Sports and FanDuel TV, and by sports celebrities and influencers entering ownership.
“I think there’s a lot more optimism, there’s a lot more partnerships,” Lacy said. “I think it was also very encouraging to see new people getting engaged, people that may have been on the sidelines getting into the game.
“I think the oversight and the regulation has created a level of confidence in the racing product itself,” Lacy added, referring to the Horseracing Integrity and Safety Authority and its subsidiaries. “You see that young people are starting to recognize that this is a fun sport. It’s sort of the best-kept secret, in many ways, because people can participate and enjoy it with their families and friends.”
Gun Runner’s sale-topping colt, who came during Book 1, was purchased for $3.3 million by the Coolmore group and Peter Brant’s White Birch, which have been familiar partners on horses such as Gun Runner’s champion son Sierra Leone. Joining the partnership on this colt was Winchell Thoroughbreds, which co-campaigned Gun Runner with Three Chimneys and which has raced several of his best offspring, including homebred Grade 1 winner Gunite, who stands at Coolmore’s Ashford Stud.
The sale topper, who was co-bred by consignor Hill ‘n’ Dale with Determined Stud, is out of the Grade 2-winning Tapit mare Thoughtfully, who is from the deep Phipps family of Breeders’ Cup Sprint winner Dancing Spree and Grade 1 winners including Fantastic Find, Finder’s Fee, and Furlough.
Gun Runner’s sale topper helped him lead Keeneland September by average price. His 40 yearlings sold for an average of $877,125. The Horse of the Year and Hall of Famer, who stands at Three Chimneys Farm, set an earnings record for a North American freshman sire in 2021 and has quickly transitioned into a prominent general sire, finishing sixth on the earnings list in 2022, third in 2023, and second last year, according to Daily Racing Form statistics. As of Saturday, he ranked third this season.
“Gun Runner gets runners of all shapes and sizes,” Doug Cauthen, vice chairman of Three Chimneys, said. “They all walk, they all move well, they’ve got great minds. He can get a sprinter type, he can get a two-turn type, and he can get a turf horse. It’s kind of amazing. Obviously he’s known in the U.S. for dirt horses, but we think he can do anything.”
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Not This Time, who is currently second to six-time reigning leading sire Into Mischief on the general sires list for Taylor Made Farm, finished second to Gun Runner by average price, with 55 sold for $701,455. His gross sales were $38,580,000 to lead all stallions – dethroning Gun Runner, who led last year.
“The versatility of them, I mean, they run on everything, every distance,” said Jason Loutsch of Albaugh Family Stables, which raced Not This Time as a homebred. “That’s what is so important to all these buyers. If they don’t run on dirt, try them on turf. They are all going to run. We can’t be more proud of them.”
Unbeaten Horse of the Year Flightline, with his highly anticipated first crop for Lane’s End Farm, finished third to established sires Gun Runner and Not This Time by both gross and average, with 44 offspring sold for $30,550,000, an average of $694,318. He had eight seven-figure lots – half of those bound for Japan, as he proved very popular with that jurisdiction.
“The Japanese want to bring some of them back to Japan,” trainer Mitsumasa Nakauchida said. “Flightline had the super performance at the racecourse. His race record is outstanding. So we are expecting him to be a super sire.”
While the top of the market, featuring dazzling pedigrees by the nation’s leading sires and emerging stars, generated the fireworks, there was somewhat quieter activity in the middle and lower marketplaces. While the buyback rate for the sale overall was slightly improved, the buyback rates for four of the final six sessions of the sale were higher than their 2024 counterparts.
“I think there’s an element where supply and demand are in pretty good balance,” said Breathnach, pointing again to purses versus the foal crop. “Purses are high in many of the major racing jurisdictions, so when you get into week two and the horses aren’t quite so expensive, there’s real, tangible return on investment when you buy an athlete in week two. And we can’t stress enough how good breeders are at their jobs. They’ve adapted to the time.”
Additionally, although the stud fee doesn't represent the only expense for breeders, the return on investment on stud fees did become lower through the sale. For example, the average stud fee for a sire with yearlings sold in the first two sessions of the sale, Book 1, was $90,608, compared to an average sale price of $664,447 – 7.3 times the average stud fee. However, the average sale price in the middle two sessions of the sale – representing the end of Book 3 and start of Book 4 – was $143,390, 2.7 times the average stud fee of $51,686 for a stallion in that book. In the final two sessions of the sale, Book 5B, the average sale price was $19,451, only about $200 more than the average stud fee of $19,245.
“Obviously, the production cost has risen for the breeders, where they have to be careful with the numbers that they breed,” Lacy said. “That has been very evident speaking to them, that they know they have to be careful in the number of mares they have and how they breed them.”
Repole Stable was Keeneland September’s top buyer by gross, picking up 33 yearlings for $14,155,000. That only represents the yearlings the owner purchased on his own, not counting his various partnerships.
“I think that I’m trying to have a well-balanced stable,” Repole said. "I want a six-furlong sprinter on the dirt and the turf, colt and filly, and I want two turns on the dirt and the turf, colt and filly, and now that Belmont is going to [add a synthetic track], I want to look for [synthetic] horses as well. I love the game and I want to win at the highest level. For me, it’s a numbers game. I’m not afraid to be outbid. As everyone knows I’m a little aggressive with everything I do in this game, but I’m patiently aggressive.”
In terms of sheer numbers, Kazakhstani bloodstock agent Nadir Khassanov was the most active buyer, coming away with 49 yearlings. The top 10 buyers by number of yearlings also included the Korea Racing Authority, traditionally a driver of the second week of this sale.
“Our team traveling the world recruiting buyers, those efforts proved to be very, very fruitful,” Lacy said. “Europe, the Middle East, Japan, Australia, Eastern Europe – from everywhere. It’s extremely encouraging as we see that we are a true, true global marketplace.”
Taylor Made Sales participated through all books of the auction, selling 333 yearlings – more than doubling the next-busiest consignor, Paramount Sales, which sold 163. The Taylor family operation again led all consignors by gross sales, for the 10th time in the last 11 editions, with receipts of $68,515,000.
For hip-by-hip results from Keeneland's September sale and sortable lists of leaders in various categories, click here.
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