Kristen Manning identifies some reasons for the current sales boom in Australian bloodstock
Australia: Just look at the figures and you’ll understand why people are talking about a sales boom in the world of Australian bloodstock – despite (or perhaps even because of) the attentions of Covid-19.
Major Australian sales results 2021-22
In the context of such sizeable year-on-year increases, there is little wonder that reports on recent yearling sales have carried headlines such as ‘Records smashed across the board’, ‘Records tumble again’ and ‘More magic records’.
And what is more, the success is not all about gross takings – averages and median figures are up. At all sessions; at all sales. The clearance rates are impressive too – and the online market is burgeoning, with Inglis Digital just one example – sales up A$1.8m (up to over A$11m) for January/February on the same period last year.
‘Sensational sale’
Hardly surprising, then, that Inglis CEO Sebastian Hutch could not be happier with the current state of affairs. “The Melbourne Premier was an exceptionally successful sale as was the Sydney Classic which has seen a 54% increase in sales in two years with around the same number of horses catalogued,” he reports.
“By any stretch of the imagination those sorts of figures are extraordinary – and for the first time in a calendar year the bloodstock industry is set to break the billion-dollar mark.”
Magic Millions managing director Barry Bowditch is also pleased by the buoyancy of the market, suggesting “it was survival of the fittest at the Magic Millions – it was a sensational sale!”
For buyers, it was harder than ever to secure the right horse, as syndicator Denise Martin noted. “It was a real surprise that sales figures increased in 2021,” she says. “I thought people would be subdued after lockdowns. Well, that was not the case, and there is an even greater sense of optimism this year.
“Normally at the Magic Millions I aim to buy between 12 and 14 horses,” Martin adds. “This year I left with ten. There were horses who I thought would normally be in the A$250,000 to A$300,000 market who were fetching A$400,000 and more. We are selling shares quicker; interest in buying horses has never been greater.”
Betting turnover figures also on the up
Buyers are keen – and punters are too, it seems. In the state of Victoria, for example, domestic wagering passed the A$5bn mark in a six-month period for the first time between July and December last year. This was 5.4% increase on the previous year.
Figures at midweek meetings increased and for the first time the Saturday turnover average surpassed A$80m. Eight of the top ten meetings by turnover provided record results.
All in all, then, such figures point to an incredible thirst for buying and punting on the Australian thoroughbred. But why? Here are four possible catalysts for the boom.
1. PRIZE-MONEY
The Racing Victoria report outlining the turnover increases listed above also noted that there was an 8.4% increase in prize-money payments. In 2022 a record A$286.5m in prize-money will be on offer, making an increase of more than 60% in seven years.
Meanwhile, Racing NSW recently announced a A$25m increase in prize-money, up 127% in ten years.
“Amazing figures,” says Coolmore Australia’s sales manager Colm Santry. “We now have 72 races worth A$1m or more, no Group 1 races worth less than A$600,000. We have come such a long way in a short space of time. The future is bright.”
Sebastian Hutch agrees. “Prize-money is the rock that it is all built on – and it is off that which we can sell the sport,” he says.
Barry Bowditch says: “There are unbelievable amounts of money to be won, meaning that it makes sense to be involved. There are dreams to be made and shared!”
2. MEDIA COVERAGE
Up until the 1980s racing in Australia enjoyed good media coverage, including free-to-air television. But then came a blank for a period as racing disappeared from our screens for a while, with only those willing to pay subscriptions able to tune in.
Thankfully the tide seems to be turning with dedicated racing outlets such as racing.com (free-to-air for the last six years) and online platforms including social media making it easier to keep in touch with the racing world.
Major stations have been televising Saturday meetings on a more regular basis and those fronting the coverage are making an impact on how racing is viewed – broadcasters such as Bruce McAvaney, Jason Richardson, Katelyn Mallyon, Charlotte Littlefield, Francesca Cumani and Bernie Cooper are knowledgeable and enthusiastic.
“Television is doing a great job promoting the stars of the sport,” says Sebastian Hutch. “We are in an era of some extremely successful trainers and we are seeing them on our screens more and more – that gives people the confidence to get involved in the sport."
Naturally enough, with racing one of the few leisure activities able to continue throughout Covid-19 lockdowns, more people tuned in.
“People were stuck at home and racing was the only live sport in town,” Barry Bowditch says,“and Australians love live sport!”
“The only things on television were Covid-19 and racing and the former was driving us nuts,” adds trainer Robbie Griffiths.
3. INTERNET SALES
A relative newcomer to the sales game, online platforms provide fresh horse trading opportunities. “Traditionally the only entry point for a potential horse owner was through a trainer or the yearling sales,” explains Sebastian Hutch.
“But now, on a very regular basis, there is easier access,” he adds. “We have seen a wider spectrum of bidders on all levels – online bidding can be less intimidating; a buyer can do their own research without feeling like they are being judged by anyone. There is the same level of excitement but with an anonymity that appeals to some.”
Increases in online trade flows on to auction days with the tried horse market strong. “It gives buyers more confidence,” Hutch says. “There is less downside to investing in yearlings as there is a bigger market for them to be resold.”
Bloodstockauction.com’s general manager Alan Biddle remembers when there was cynicism regarding internet sales. “Many doubted that online auctions could work, that an industry traditionally slow to embrace change would never fully accept the concept,” he recalls.
“Move ahead seven years and the change has been nothing short of remarkable and the volume of horses sold online in Australia is now higher than ever.
The numbers are indeed startling. In 2015, Biddle says 1,812 Thoroughbreds were sold online, accounting for around 13.5% of all sales. Last year, 10,860 horses changed hands online for a massive 61% of the total.
4. COVID-19
Counter-intuitively, could the biggest challenge faced by the industry actually
Whilst many of the increases in racing activity can be put down to good management, was it the unforeseen that has had most effect?
An international pandemic, a world changed – and Arrowfield Stud chairman John Messara is positive that Covid-19 played the major role in the boom. “All asset classes are enjoying that boom – boats, property, cars, luxury brands – and we have gone up with it,” he says.
“For a couple of years we have been restricted, especially in regards to holidays. The massive amounts that normally would’ve been spent on travel is being spent elsewhere.”
Analysis by the Commonwealth Bank suggested that Australians this year will have a spare A$38bn that would otherwise be spent on overseas travel.
Adam Tims is executive dIrector of Stable Financial, an accounting firm specialising in the Thoroughbred industry. “The mid-to-higher end of the market is helped by wealthy participants who are enjoying the rise of most asset classes,” he notes.
“There is a correlation between the ASX [Australian Securities Exchange] and horse sales and those making money elsewhere are happy to pump some into the Thoroughbred market because they enjoy it and because they believe they can make a dollar from what is now viewed as a legitimate investment.”
‘People are realising you have to enjoy yourself more!’
Messara also suggests Covid-19 has reshaped the way people look at life. “For the last two years every day we’ve been told how many people are sick, how many are dying,” he says. “It makes people get more in touch with their own mortality which leads to a change in psyche – people are realising that you have to enjoy yourself more!”
Denise Martin agrees. “Covid-19 has seen many people change their lives: downsizing, relocating, selling investment properties. It has caused a rethink on leisure activities and horse racing is exciting.
“We’ve had quite a few new buyers who’ve said they have always wanted to get a share in a horse … it gives people a great lift to race a horse, especially on the back of a couple of years of restrictions and hardship.”
Trainer Robbie Griffiths agrees. “People have been itching to get out and spend, and for a while the only thing to spend money on has been horses,” he says. “Sports betting is popular in Australia and for some time that option was closed, leading those punters to shift over to racing.
"A lot of positives have emerged from this negative thing – now we just need to ride on the back of it, to keep promoting racing, to sustain the interest so that people continue to invest.”
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