The Keeneland sale concluded with the median price down about 21%, from $47,000 to $37,000, and the average fell the same 20% from $125,000 to $100,000.
Horses sold fell from 2,974 to 2,481. Without late withdrawals the median and average would have been lower.
After one day of the Fasig-Tipton sale a West Point guy told me it looked like horses were “25% cheaper” this year, and that estimate turned out to be very accurate.
How much of the drop can be attributed to COVID is impossible to estimate. The horse racing industry faces challenging economics even when everything is going smoothly. Handle has been ok even without live fans. Perhaps Congressional action on the Horse Racing Integrity Act will help, but the Libertarian in me worries about unintended consequences of federal rules. We have yet hear the outcome of federal charges against Servis and Navarro, that could be a short-term negative and a long-term positive. Recent announcements that lower level people involved in the scandal have pled guilty, could have ominous repercussions. At best the near term forecast is cloudy, maybe even with storms on the horizon.
Was this a good time to buy yearlings?
My prediction is next year average/median prices will be even lower. If prices bounce back 20% next year, my prediction will look silly. Forecasting economic conditions is a tricky business, forecasting the stock market is even more difficult, but it is all a part of the business of buying horses.
I try to play the horses to get away from the investment business, but I can’t escape.
“Just when I thought I was out — they pull me back in”
Buying A Race Horse 