Johnston: Sales Review 'Missed The Crucial Point'

There is one thing about the delayed start to the flat season-it means that more trainers are still riding Classic dreams than is normally the case by mid-May.

Mark Johnston is the winningmost trainer in British history-he has saddled 4508 winners in the country-and each year since 2017 he has sent out in excess of 200 winners in a season. So chances are Johnston has more than a few horses in his Kingsley Park Yard in Yorkshire to look forward to when racing in Britain resumes presumably early next month.

Chief among those is last year's G2 Queen Mary S. and G2 Duchess of Cambridge S. winner Raffle Prize (Ire) (Slade Power {Ire}), who was also a narrowly beaten second in both the G1 Prix Morny and the G1 Cheveley Park S. in the colours of Sheikh Hamdan bin Mohammed Al Maktoum. Johnston said the plan all along was for the chestnut to head straight to the G1 1000 Guineas without a prep, and it will likely remain that way.

“The Guineas looks to be coming the first week in June now and that's fantastic if that happens and I'd say we'd still make that Raffle Prize's first target,” Johnston said. “It's been a case of keeping these horses ticking over until we put the finishing touches on because we're not quite sure when they're going to run.”

Raffle Prize could be joined in the 1000 Guineas starting gate by stablemate Rose of Kildare (Ire) (Make Believe {GB}), with that one also having the option of the G2 German 1000 Guineas, a race Johnston won last year with Main Edition (Ire) (Zoffany {Ire}). Rose of Kildare capped a busy 12-race campaign last year with back-to-back scores in the G3 Firth of Clyde S. and G3 Oh So Sharp S.

“With Rose of Kildare, the thought was to run in a Guineas trial before making a decision whether to go to the English Guineas or wait for the German Guineas,” Johnston said. “The German Guineas is in late June now so it will be a hard decision with her, depending on how she works over the next couple weeks at home whether we would take the plunge and go to the English Guineas without a trial or whether we'd look for something a bit lower grade with a view to going to the German Guineas if we're allowed to do so.”

The Mark Johnston-trained West End Girl (GB) had provided her Derby and Arc-winning sire Golden Horn (GB) with his first winner and stakes winner last term when taking the G3 Sweet Solera S., but Johnston said plans are less certain for her.

“We're a bit less sure of where we're going with her and a bit less sure about her optimum trip,” Johnston said. “I'm sure we wouldn't be pitching her into Group 1 level; we'll be trying to get a feel for her first.”

In 2016, Johnston was entrusted with Sheikh Hamdan's 1.6-million gns yearling Elarqam (GB) (Frankel {GB}), a son of the former Johnston-trained dual Classic winner Attraction (GB) (Efisio {GB}). After showing an abundance of promise at two when going unbeaten in two starts including a victory in the G3 Tattersalls S., Elarqam was perhaps a bit frustrating at three, failing to find the winner's enclosure in four outings. Given an extended break and a wind surgery, however, the dark bay got back on track last year at four, winning three stakes headed by the G2 York S. and finishing third in the G1 Juddmonte International. Johnston said Elarqam “has been absolutely bouncing through the winter and looking great.”

“We're very much looking forward to running him and there was talk of the [G3] Brigadier Gerard being moved from Sandown to Newmarket but it's all quite up in the air at the moment,” Johnston said. “They're saying it may be run on the fifth of June, and if it does, whatever track it's on, I think we'd be keen to get him out. He's really been flying, and a Group 1 is going to be the aim but if last year is anything to go by he probably needs the first run just to put the finishing touches on and something like the Brigadier Gerard would be a nice start for him.”

(Editor's Note: the Brigadier Gerard was later confirmed for Haydock on June 7).

In addition to being one of the busiest trainers in the country, Johnston is also a high volume purchaser at the yearling sales, where he stocks up his stable each autumn. While Elarqam, selected by Sheikh Hamdan's team, represents the kind of high-end prospect that may find its way into Johnston's yard, representing the other end of the scale is Rose of Kildare, who was bought by Johnston for €3,000 at Tattersalls Ireland in 2018. As a regular patron of the yearling sales, Johnston was paying attention late last year when the British Horseracing Authority released its Review of the Buying and Selling Practices of Bloodstock and Racehorses, commissioned in June of 2017 and led by independent external advisor and former police officer Justin Felice.

Johnston noted in his Kingsley Klarion earlier this year that “there were quite a few good points and recommendations in this report,” but he expressed some concerns as well, which he shared with the TDN last week. Chief among those was the fact that Johnston said he thought the report focused too heavily on the concept of vendors 'bidding up' a horse, rather than truly corrupt practices.

“I don't deny that you get some vendors who will gamble if they see certain parties bidding and they think they're unlikely to stop; then they might gamble and bid beyond their minimum,” he said. “But I still feel they're entitled to do that, provided that if they don't sell it they're willing to take it home. I do find that when I'm buying you'll often get the situation where you bid in the ring, the animal is led out unsold–or knocked down as sold and you don't know who it is sold to–and then the vendor approaches you afterwards and says, 'that horse wasn't sold, are you willing to stand on it at what you bid?' I might have bid 50,000 in the ring and the horse is knocked down and sold at 55,000 and they come to me afterwards and say, 'will you give 50,000 for it?' I always say no. I usually say I'm not interested now, and if I'm desperate to have the horse I offer less because I assume that it was just the two of us bidding. That's a frustration at times that the vendor will gamble and bid against you when he's actually willing to sell the horse for less, but in the end my simple principle is that I set my limit and I stop at it.

“When it becomes corruption is when that vendor knows what an agent is willing to pay and is running the horse up to a previously agreed price. That is clearly fraudulent and that is what they should have been focusing on, not the idea of the vendor genuinely bidding against the purchaser. I think they touched on it but it seemed they had missed the crucial point. It's collusion between agents and vendors to fix the price that is the issue they should have been concentrating on.”

Johnston said the Tattersalls system of announcing when the reserve has been reached puts vendors in a situation where they must often bid it up to the reserve, a point that was acknowledged in the review.

“At Tattersalls you've got the situation where the reserve is effectively made public; the auctioneer states when the horse is on the market,” he said. “This effectively means that the majority of professional bidders will not bid until they know the horse is on the market. So there's not really that simple of an option as there would be at Keeneland or Goffs of just putting a reserve on and leaving it to the auctioneer. The vendor almost has no choice but to bid and put the horse on the market, which may seem underhand to some people but the system sort of drives them to do it.

“You also have the potential situation where there is only one buyer. At Keeneland or at Goffs you could just put your reserve on and leave it to the auctioneer to take that one bidder up to the reserve but at Tattersalls somebody has to bid against them.”

How could the industry attempt to combat corrupt practices that are potentially damaging to it?

“The sales companies would have to have a zero tolerance approach to it and be willing prosecute somebody who is found to be doing something which is clearly fraudulent,” Johnston said. “I'm sure corrupt practice goes on and there are those things which are clearly fraudulent like colluding to fix a price and basically steal from a buyer, but I suppose there are other practices.”

Johnston also acknowledged the fact that damage from collusion extends far beyond the sales ring in that particular moment.

“In their report they assumed the only beneficiary from achieving a higher price was the vendor,” he said. “They hadn't considered the whole idea of inflating stallion values and yearling averages and basically boosting the market and playing the market, and really that's the more complicated side of it which was a bit beyond the people doing the report. They clearly hadn't considered that. Some of those practices are a bit more of a grey area as to whether they're fraudulent, but I think the starting point would be to have a zero tolerance attitude towards anything that was clearly illegal.”

While private sales usually involve a buyer and a seller reaching a middle ground on an offer and a counteroffer, Johnston said the process of reaching the price at which a vendor is prepared to sell in the public auction ring is a more complicated one; something he said he thought the writers of the report didn't quite grasp.

“I think they were suggesting that the price is set by what the purchaser is prepared to pay, when in fact that's not the case,” he said. “In a private sale what usually happen is a bit of a Dutch auction where the purchaser makes an offer, the vendor asks for a bit more and they meet somewhere in between. I'm not sure the authors of that report grasped that it is not what the purchaser is prepared to pay that is the value, because if the purchaser is prepared to pay 100,000 and the vendor doesn't know that and is prepared to sell for 50,000, then the horse is going to sell for 50,000 or what the underbidder was prepared to pay, because somebody has to bid against the buyer.”

Among the considerations put forward in the report was the idea of licensing bloodstock agents, and for only licensed agents to be allowed to bid. The Bloodstock Industry Forum immediately acknowledged the challenging nature of such an idea upon the release of the report, something that Johnston—as a trainer who bids on and signs for his own horses at sales—echoed.

“Who is to say that anyone spending their own money can't go along and participate in a sale?” He said. “To force people to use an agent to me is just completely ludicrous. If I'm spending my money, it's up to me to decide. I grew up going to auctions—some horse auctions, but all sorts of auctions. Someone coming from another walk of life where they may be quite experienced at auctions and spending their own money, why should they be forced into appointing an agent? I think that would be a very negative thing for the honesty and the openness of the auction process.”

When it comes to cleaning up the corrupt practices that can taint the auction process, Johnston said it is about the industry taking a hard look at itself and not considering what might be normal practice as necessarily acceptable practice.

“There have been a couple of cases [of sales ring corruption going to court], and I remember around the time of the last one the judge didn't understand and people assumed that because some of these things have been normal practice for a long time, that makes them acceptable,” he said. “Well, there are things like luck money, that is not acceptable, and the fact that it is normal practice doesn't make it acceptable. We have to face up to those clear-cut things and we need to operate within the law of the land, and the starting point would be for the regulators-it's even a grey area as to whether the BHA have any power over the sales process-but I think at all stages those involved should have a zero tolerance attitude toward any criminal activity.”