The Third-Crop Gamble

By Bill Oppenheim

When stallion managers set their prices they are trying to appeal to two constituencies: owner-breeders and commercial breeders. Maybe there aren't as many owner-breeders as there used to be, but they can still have a significant impact on stallion prices and availability. Dubawi, now Darley's kingpin stallion, is a good, dramatic example of this: the Maktoum family and friends are probably going to breed over 100 mares to him next year. A few other operations are allocated seasons, but it's not like you can go out on the street and buy one.

There are enough top owner-breeders left that when they collectively decide to support a stallion prospect it can affect availability of a stallion, as with Dubawi, but more likely it will effect price. Owner-breeders are definitely not as price-sensitive to stud fees (which are 40% of the cost of producing a sales yearling, on average); they just decide they want to breed to the horse, and, up to a point of course, the actual stud fee is more or less immaterial. As a result we often hear commercial breeders moan about stud fees, precisely because they are in competition for the seasons with breeders who really don't care what the stud fee is, they just want to breed to the horse.

Similar reasoning can apply to breeding to stallions in their third or fourth seasons. Owner-breeders are less worried if a horse is standing its third season, and therefore is going to have its first crop of 3-year-olds when you might have a yearling. For commercial breeders, however, the prospect is mostly terrifying. By September or October of the year a sire has his first 3-year-olds, and the commercial breeder's yearling is fixing to sell, you could be dead in the water with the sire. I don't need to name names, but any commercial breeder who's been in the business longer than 10 minutes is sure to have a horror story about having a (usually nice) yearling to sell by a stallion on his way to another state or country.

But, just as big risks equal big rewards, it can work the other way. Having a yearling from the third crops of Tapit, Medaglia d'Oro, or War Front, for example, could result in big payoffs from relatively low investment in stud fees. If you get it right it can be a grand slam home run, so gambling on a third-crop sire which you really like can turn you from a pauper like the rest of us to a prince, and it's far less random than the lottery. Just pick the right stallion about to stand his third crop.

Standing their third crops in 2015 are stallions which retired in 2013 and had their first foals this year. Their weanling averages will have a big correlation to their stud fees (starting and current), and of course to the type of mares to which they were bred–how much black type, and how close up? But the great thing about the Thoroughbred market is it treats all applicants just about equally–their progeny either look the part, or they don't. `The Market' gets its first look at a sire's produce at the weanling sales, and the market renders its collective judgement. Conspiracy theorists like to postulate that rigging can manipulate the results, but in my experience this rarely, if ever, happens these days, partially because of the large book sizes and the number of horses by each stallion which are offered at auction. You're not exactly going to rig anything, not when there are 122 yearlings offered (96 sold) by Uncle Mo, for example.
So who do we got? For starters, we have Juddmonte's Frankel, by Galileo out of a Danehill mare and arguably the best racehorse ever. If the scale says 140 is the top, Frankel was a 145. Can such a freak be a sire at all, much less be as far ahead of his contemporaries as he was as a racehorse? I don't pretend to know the answer to that, but one thing for sure is if he is, breeding to him in his third year for £125,000 won't seem expensive–and breeding is about the future, in this case three years from now. Nonetheless, it has to be said his commercial performance at the European mixed sales was underhwelming: 10 catalogued, seven through the ring, just three sold, and just one of those, the €1.8-million Finsceal Beo filly at Goffs–really quickened the collective commercial pulse. Still, Frankel's weanling average was over $1-million (click here for Instatistics), and the likelihood is it will be a whole different story when the yearling sales get underway next year. It's likely to just be a delayed case of Frankel Fever.

Eleven other stallions recorded averages for their first weanlings between $60,000-$140,000 during the last six weeks of North American and European mixed sales. Five of the 12, including Frankel, stand in Europe and the other seven stand in Kentucky. Quite a few of these horses were 3-year-olds rather than 2-year-olds themselves.

In Europe, the other four besides Frankel were headed by Newsells Park's Nathaniel, like Frankel a son of Galileo, and whose form, as we mentioned a couple of weeks ago, included a couple of defeats by Frankel. Placed twice in two starts at two at a mile, at three he won the G2 King Edward VII S. at Royal Ascot, defeating future G1 Melbourne Cup winner Fiorente, then won the G1 'King George' against older horses, including the previous year's G1 Epsom Derby winner Workforce. At four he won the G1 Eclipse and placed (behind Danedream, Snow Fairy, Frankel, and Cirrus des Aigles) in three more Group 1's at 10-12 furlongs. He ran a Racing Post Rating (RPR) 127 five times, which shows remarkable consistency. He was number two on weanling average among first-crop F2014 sires, as 19 foals offered (from 23 sold) averaged $140,854, with an even higher median–always a good sign. The market really liked him.

Coolmore's Excelbration, who was four times second to Frankel and once third, won two Group 1's at a mile (best RPR 131) when Frankel stepped up to 10 furlongs, and was third on foal average ($85,321) among European freshman weanling sires); also making the NA/EU Freshman Weanling Sire top 12 were the Tsui Family's Born To Sea ($70,563), a Classic-placed (second to Camelot in the G1 Irish Derby) and listed stakes-winning 3/4-brother to Sea The Stars by Invincible Spirit; and Juddmonte's Bated Breath ($64,669), a Group 2-winning sprinter (defeating Sole Power) by Dansili.

Lane's End's Union Rags ($133,941), quite possibly a Nijinsky disguised as a Dixie Union and winner of the
GI Champagne S. and GI Belmont S., was the narrow leader among North American freshman weanling sires, over WinStar's Bodemeister ($118,739), by Empire Maker. Bodemeister won the GI Arkansas Derby by 9 1/2 lengths, and was runner-up to I'll Have Another (Flower Alley) in both the GI Kentucky Derby and GI Preakness S. Both Union Rags and Bodemeister posted $130,000 medians.

Four of the other five North American freshman weanling sires with averages over $70,000 are from the early crops of young star sires. Both Coolmore's Stay Thirsty ($91,833), winner of the GI Travers S. at three and the GI Cigar Mile at four, and Gainesway's To Honor And Serve ($90,778), winner of the GI Cigar Mile at three and the GI Woodward S. at four, are two-time Grade I winners from the first crop of Bernardini. Lane's End's The Factor ($87,150), from War Front's first crop, won the GI Pat O'Brien S. and the GI Malibu S. as a 3-year-old; and Gainesway's Tapizar ($83,600), the 2012 GI Breeders' Cup Dirt Mile winner, is from Tapit's third crop, and a year behind Trappe Shot among Tapit's early prominent sons. Darby Dan's Shackleford ($70,438), by Forestry, was a three-time Grade I winner, including the Preakness as a 3-year-old in 2011, and the Met Mile and Clark H. at four in 2012. Interestingly, nearly, if not all, of the North American and European freshman weanling sires whose first foals averaged $70,000 or more, were themselves best as three or 4-year-olds, suggesting betting on their third crops could be just the right time to take the shot on the ones you fancy.

Bill Oppenheim may be contacted at bopp@erb.com (please cc TDN management at suefinley@thoroughbreddailynews.com). Follow him on Twitter at www.twitter.com/billoppenheim.