How to use auction prices when handicapping horse races

September 22nd, 2021

Each year, thousands of unraced and untested Thoroughbreds are sold at auction. The prices they bring vary widely, depending on pedigree, conformation, and more. Some sell for a few thousand dollars. Others cost millions.

Sometimes, it can seem as though auction prices have little correlation to racetrack ability.

In 2006, an unraced two-year-old named The Green Monkey sold for a record $16 million. He never won a race.

On the other hand, 2009 Kentucky Derby (G1) winner Mine That Bird sold for just $9,500 as a yearling.

Once a horse starts to race, its auction price becomes largely irrelevant. It’s the talent they show on track that matters. But when analyzing unraced horses (such as debut juveniles in maiden races), there are several ways to use auction prices as a helpful handicapping tool.

1. Compare auction prices to stud fees

The stud fee is the amount of money an owner must pay to breed their mare to a stallion.

An elite stallion, with dozens of successful sons and daughters, might boast a stud fee of $100,000 or more, while an unheralded stallion, with an unremarkable record, might stand for $1,000.

Stud fees and auction prices are listed in Brisnet Ultimate Past Performances, and comparing the two figures can give you an idea of how an unraced youngster is perceived. If a son of a $5,000 stallion sells for $400,000, you’re probably looking at a promising prospect, with strong conformation and hints of talent. Perhaps he turned in a fast workout at a sale for two-year-olds in training.

On the other hand, if the son of a $200,000 stallion sells for $30,000, there may be a reason why that isn’t evident on paper. Perhaps the horse has conformational defects that may hinder his ability as a racehorse, either in the short term or the long term.

2. Compare the auction price to other runners sired by the same stallion

The popularity of a stallion can influence how much his progeny sell for at auction.

If there is a lot of hype — because his foals are running well or because they’re showing potential as yearlings — demand can drive auction prices higher than expected.

On the other hand, the progeny of a perfectly capable stallion might bring modest prices, if he has fallen out of favor or if his foals take their time developing into stakes stars.

Let’s suppose you’re analyzing an unraced filly — “Horse A,” if you will — who sold for $10,000 as a yearling.

The Brisnet Ultimate Past Performances list the following information pertaining to her sale details:

This is simple to interpret. "Horse A" sold at the 2020 Keeneland September Yearling Sale. She was one of 96 yearlings by her sire to sell at auction in 2020, and her $10,000 price ranks as 61st most expensive from the 96. Her sire’s 96 foals brought an average price of $28,500 (rounded to the nearest hundred), almost three times higher than his $10,000 stud fee.

In other words, "Horse A" brought a lower price than average for her sire, which only matched his stud fee. Since 96 horses is a solid sample size, these stats hold some weight, but it’s important to remember smaller sample sizes can be thrown off by one expensive sale. Suppose a stallion has five foals sell at auction in a year, four brought $25,000, and the other sold for $500,000. The $120,000 average fails to properly reflect the $25,000 price more typically brought by the sire’s progeny.

3. Consider current vs. past stud fees

Stud fees can change sharply, depending on a stallion’s success or failure. An imaginary “Horse B” may have been conceived when his sire stood for $5,000, but if the stallion has since developed into a star, the stallion’s stud fee might be up to $25,000 by the time "Horse B" debuts.

In this case, you might want to forgive and forget if Horse B sold for a modest sum at auction. If no one had faith in the stallion, but he has exceeded expectations at stud, it’s fair to conclude "Horse B" would have brought a higher price if resold on the heels of his sire’s resounding success. If you keep up with the breeding world, you’ll have a handicapping edge in this department.

Auction prices can’t tell you everything about the potential of an unraced Thoroughbred, but a nuanced view of auction prices can reveal more than you might expect.