Purchase could alter horse sales
ONE OF KEENELAND’S TOP CLIENTS NOW ALIGNED WITH FASIG-TIPTON
By Alicia Wincze
Since Sheikh Mohammed bin Rashid al-Maktoum became a fixture in the thoroughbred marketplace during the early 1980s, he has altered the horse racing landscape in a way few could have imagined.
But after Thursday’s announcement that the sheikh was involved in acquiring North America’s oldest thoroughbred auction house, Lexington-based Fasig-Tipton Co., some think his most significant impact is yet to come.
The day after Fasig-Tipton said it reached an agreement to be acquired by Dubai-based Synergy Investments Ltd., members of the auction community were trying to digest what, if any, major changes might be on the horizon.
Synergy Investments is headed by Abdulla Al Habbai, a close associate of Dubai ruler Sheikh Mohammed.
Next to Fasig-Tipton itself, the company with the potential to be most affected by the deal is in-town rival Keeneland.
When contacted by the Herald-Leader on Thursday, Geoffrey Russell, Keeneland’s director of sales, referred all questions to Keeneland president Nick Nicholson.
Nicholson released a statement Thursday saying, “The purchase opens a new chapter for an historic, well-established company in the thoroughbred auction business,” but he declined further comment Friday.
Keeneland, which generated more than $815 million in gross receipts during the 2007-08 sale period, has long counted Sheikh Mohammed as one of its top customers. He has been the leading buyer at the prestigious September yearling sale eight of the past nine years.
The new deal leaves Keeneland in the precarious position of conceivably having to compete with its top buyer for horses. One sale that could possibly suffer is Keeneland’s April 2-year-olds-in-training sale, which already struggles to attract as many boutique horses as Fasig-Tipton’s Calder select juvenile auction.
“From our perspective, it’s nice to have multiple locations and different horses,” said Doug Cauthen, president of WinStar Farm, the third-leading buyer at the 2007 Keeneland November Breeding Stock sale. “I think it could be very good and very positive.”
As for Fasig-Tipton, it plans to keep its current management and staff in place, and company officials said there have been no discussions about altering any of its sales or adding new ones.
However, what hasn’t been determined is how having the world’s most affluent buyer controlling a major auction house will affect different segments of the market.
“I’m not particularly concerned,” said Bayne Welker, director of sales for Mill Ridge Farm and president of the Consignors and Commercial Breeders Association. “Here’s a guy who ultimately controls the market anyway. At his will, he can decide not to participate in the market for a year or so and it can have a resounding effect, but we haven’t seen that side of him.
“He has always made up a substantial part of the thoroughbred marketplace, so no, I don’t think (there is a conflict). I think it will go forth with the utmost integrity.”
Ultimately, the long-term health of the sales industry hinges on its ability to attract new buyers.
With Sheikh Mohammed’s ample resources and Synergy’s stated plan to plow surpluses back into customer service, some say Fasig-Tipton’s new ownership group will be in prime position to do just that.
“One thing that put a big smile on my face was the notion they’re going to try and help shake the trees, so to speak, in getting more buyers to take a look at our industry,” said Terry Finley, president of West Point Thoroughbreds, an active buyer at auctions across the nation. “If we don’t continue to do a better job with that … we’re in big trouble.
“One of the reasons I’m so excited is I think they’ll put some efforts and resources into attracting new people and showing them what a great business we have.”
While some question what effect Sheikh Mohammed’s association with Fasig-Tipton will have on the participation of certain buyers, others aren’t letting the news affect their philosophies.
“I think some will latch onto that … but in my mind that would be the furthest concern,” Finley said. “We’re going to keep an open mind and we’re going try and buy good prospects. But it will be very interesting to see how the landscape of the sales changes.”