'We'll see more of it' – US bloodstock figures say online sales are viable

When Australian auction house Inglis realised its premier Easter Yearling Sale might be negatively affected by the Covid-19 pandemic, management went to Plan B – conducting it online.

Though many of the horses on offer had already been inspected prior to the auction, the actual bidding process was digital, with buyers from all over the world placing bids via the internet.

One of Australia's largest farms, Arrowfield Stud, withdrew its entire 60-horse consignment, and logistical issues such as travel restrictions precluded some horses from keeping their intended date to go through the sales ring and some buyers from being able to travel to the auction site near Sydney.

Not surprisingly, the numbers were down from last year, but the overall assessment was that the sale was a success.

Inglis reported 214 horses sold for gross receipts of A$70,675,500. The A$309,980 average was down 11 per cent and the A$250,000 median represented a decline of A$10,000.

"This has been the most remarkable sale on so many levels,'' Inglis managing director Mark Webster said. "Not only has it been the first premium yearling sale anywhere in the world conducted in this format, it has been done during a global health and financial crisis with restrictive movements internationally and between states in Australia, making it hard and, in many cases, impossible for buyers to inspect stock in the lead-up to the sale.

"But with fantastic teamwork and solidarity between our vendors and Inglis, we've been able to make this work."

The cancellation or postponement of major thoroughbred auctions in the US because of Covid-19 raises the question of whether online auctions are a viable alternative during times of normal market disruptions.

For the concept to gain acceptance domestically, US industry professionals say the mindsets of buyers and sellers would require adjustments and that the online sales would only be appropriate when on-site physical inspection at point of sale is less important.

Ned Toffey, the general manager of Spendthrift Farm, which has an Australian division, said virtual auctions are common in that country because of the business model there.

"They don't run claiming races at the tracks, so there is a need for frequent sales," Toffey said. "It's just something people in Australia are more used to. I think with the situation we're in, whether it's the thoroughbred business or any other business, there is more being done online, if nothing else as a cost-cutting measure."

Toffey said the broodmare market would lend itself more to online sales than other sectors due to the necessity of wanting to inspect a potential racing prospect as close to buying the individual as possible.

"In Australia, we've bought relatively expensive broodmares online," he said. "We would still have the horse vetted so there is some form of inspection. From photos and a short video, you can get a comfort level if you're buying a broodmare. When you're buying an athlete, you want to look at them in person. But that can be accomplished by using an agent, which a lot of people are doing now.

"I think it's something that can happen, and we're going to see more of it," Toffey said of online auctions. "There are ways around any obstacles, and no question there is a place for online sales. It's a little more of a challenge here because it is hard to get comfortable with these things overnight. But we certainly have the perfect storm that could cause people to get comfortable with it quickly."

Mark Taylor, whose family's Taylor Made Sales Agency is consistently among the leading consignors at North American auctions, said he could envisage a scenario under which Keeneland would conduct its September Yearling Sale as an online event if there was a necessity to limit the number of participants on the sale grounds.

"If it was an extreme emergency for September, would they only let a certain number of people on the sale grounds at a time – mainly the agents walking the grounds and not the principals – to try to keep [the crowd] down, and the auction itself would be done online so you didn't have that big crowd in the back ring?" Taylor said.

"I don't think it will come into play this year, but it would prevent that really intense crowd in the pavilion."

While not saying Keeneland was planning to conduct any upcoming sales online, Bob Elliston, the vice president of racing and sales at the Lexington sales company, said there were "very encouraging outcomes at the Inglis Easter sale".

"They have been supporting online auctions for a while in Australia," he continued. "Stay tuned for additional information on what we have been doing on this subject over the past eight to ten months."

This year's sale is scheduled for September 14-26.

"Our hope is to conduct the September sale under normal circumstances, but be assured we are planning for all contingencies because our entire focus is to deliver a successful sale," Elliston said. "We will be adaptable depending on the challenges we face."

"We obviously watched the Inglis sale with interest and have nothing but praise for Inglis and the job they did under extraordinary circumstances," Fasig-Tipton president Boyd Browning jnr said.

"There are certain things we can learn from that. But what happened to work for a particular type of sale in one part of the world doesn't always translate.

"They have been having online sales, and a lot of folks are accustomed to it. It is something we have observed and watched with interest. Could there be potential implementation of some of those things in the US? Sure, but there's no timetable right now."

"Given the state of things right now, the option of online auctions in some form or another is certainly on our radar," said Tod Wojciechowski, the director of sales at Ocala Breeders' Sales.

"But, as it frequently is, the devil is in the detail."

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