TIPPING POINT:Buying yearlings is the sort of high–risk investment that even the most feckless and incompetent of financial wonks would blanch at, writes BRIAN O'CONNOR
LET’S TALK horses. That alone will be enough to have a lot of you turning the page. For many, snogging Silvio Berlusconi’s spittoon would be preferable to watching the gee-gees. But hold on.
This isn’t about peering through rain at a bunch of anonymous runners in the far distance. It’s about something much easier to twig – MONEY.
Tomorrow morning at the Goffs sales ring, the Orby elite yearling sale begins. It will be three days of capitalism at its rawest, millions being ponied up for the newest products of a centuries old sex industry. Sheikhs and shapers, billionaire squireens and broke charlatans on the make will assemble in Kildare for an orgy of speculative greed that takes place amid a wafting aroma of expensive eau d’cologne, Barbour wax and some of the most valuable horse shit in the world. How is that not exciting?
The figures may be rarefied enough to give most of us a nosebleed but the essential gamble behind them is one even an occasional betting shop punter will recognise. A total of 675 horses are due to be sold. Lingering in there may be a great champion. In 2006, a gawky chestnut colt by the sire sensation Galileo cost €430,000 at Goffs. Two years later New Approach won the Derby. That’s the headline stuff on the front of the brochure.
But the odds on that happening again are astronomical enough to make the entire bloodstock business a rare triumph of hope over experience.
None of the one-year-old horses going under the hammer this week have even had so much as a saddle on their backs, never mind a little man in shiny silks. All they know how to do is eat, poop and walk straight, and the more skittish can’t even manage that. All potential purchasers have to go on is their judgment and a page outlining each yearling’s family-tree: oh, and any number of spoofers – or agents as they are sometimes known – possessed of an ability to persuade the wealthy and the gullible that buying horses is something other than a genetic crap-shoot.
A study in the USA at the end of the millennium revealed that a third of all thoroughbreds foaled never even make it to the racecourse. Less than half win a race of any description. The percentage of horses that win at the very highest Group One level is 0.1 per cent. Those are the sort of odds that makes Paddy Power shareholders get all tingly and which makes buying yearlings the sort of high-risk investment that even the most feckless and incompetent of financial wonks would blanch at.
Even the greatest horse experts get it wrong, spectacularly, all the time. Five years ago, John Magnier, the tungsten-tough Coolmore Stud boss, and pin-up for much of Ireland’s business elite, forked out a cool $16 million (€12m) for an unraced colt subsequently called The Green Monkey after a hole at his owner’s Barbados golf course. The Monkey ran three times and failed to win. He earned just over ten grand.
But at least he made it to the racecourse. Magnier’s great rival, Sheikh Mohammed of Dubai, must still shake his head at the memory of paying $10.2 million (€7.6m) in 1983 for a yearling he named Snaafi Dancer. The son of the great stallion Northern Dancer proved barely able to get out of his own way, never ran at all, and when sent to stud proved so sub-fertile he sired only four foals.
Magnier and the Sheikh have been the two constants at the top of the world bloodstock scene for decades now and it would be easy to characterise their clashes at the sales ring as a very expensive peeing contest were it not for the fact they live the sort of lives that are testament to their money-making abilities and their capacity to get it right more often than not. And yet it is not just racing’s two superpowers that keep coming back to the ultimate shot in the dark.
The odds might be immense but the lure of a top horse remains as powerful now as it did when Charles II was sneaking out of Nell Gwyn’s cot to check out the nags on Newmarket Heath. It was Churchill who famously said there’s something about the outside of a horse that’s good for the inside of a man. And while the lure of the races remain a mystery for some, there are many others for whom the sight of a galloping thoroughbred remains the very essence of poetry in motion.
Securing the very best of the breed is a global game. The arse may be falling out of the world’s economies but from Deauville to Doncaster, on to Kentucky and now back to Kill, there remains a demand for that ultimate luxury item, the racehorse.
That’s good for Goffs. Any auctioneer of any type depending on local money these days is doomed to disappointment. But selling horses has always been an Irish “go-to” when things are tough and this is no exception. The world is coming to Goffs because the product here remains valuable.
There’s an obvious contrast with the economics of the racecourse here. Whereas almost every other major racing jurisdiction in the world funds itself from a percentage of the betting turnover it generates, prize money in Ireland exists in a rarefied bubble that theoretically can be pricked at any time depending on the gastro-intestinal fluctuations of the relevant government minister. All the more surprising it was then recently to have Horse Racing Ireland appearing to bite the hand that feeds it when generating uncomfortable headlines for the Minister for Agriculture over bonus payments to its chief executive.
But the “ba-di-ba-di-ba” drone of a sales ring auctioneer is the reassuring soundtrack to the very essence of supply and demand.
No doubt there will be some ethically questionable goings on during the Orby sales. We have learned to our cost how any amount of pious corporate-speak can never disguise the fundamental business reality of buy-cheap and sell-dear. And the horse game has more than its share of shady characters who can’t even spell ethic. But it is important to remember the basis for all the hard-nosed financial calculations is the selling of a sporting dream. And sometimes it doesn’t even cost that much.
Four years ago a bunch of friends invested 12 grand for a foal, peanuts in the high-octane world of flat racing. After preparing the animal in the bloodstock outpost of Co Mayo, they sold him on as a yearling for 26 grand.
On Saturday that same horse, now known as Dick Turpin, won the second Group One of his career in Italy. It’s that tantalising prospect of hitting the jackpot that will be at the back of even the most jaded mind at Goffs, calculating how much to bet on the possible.
Horse sense was described by WC Fields as the thing a horse has which keeps it from betting on people. Thankfully even during these bleak times, there will be plenty of people taking leave of their senses once again.
