The Saratoga conundrum

Sheikh Mohammed bought eight horses for $3,155,000 at the opening session of the Saratoga select sale last night. That was more than three times as many horses and three times as much money as any other buyer spent on the sale's opening night.

The Sheikh did not buy every expensive horse, however, nor every horse he bid on. Although it is true that his representative John Ferguson signed for the session's top-priced horse, a beautiful $800,000 colt by Sheikh Mohammed's homebred champion and top sire Street Cry, the next most expensive horse he purchased, a $400,000 Smart Strike filly, ranked only eighth on the list of high prices.

Early in the session I commended Ferguson for letting someone else win after he stopped bidding at $425,000 on a gorgeous Rock Hard Ten colt bought by Charlotte Weber's Live Oak Plantation. He responded tellingly, "This sale has to succeed."

Ferguson, and no doubt the Sheikh as well, is always aware of Darley's dominant position in the market for racing prospects and of both the good and the harm that dominance can do. For the market to thrive, it needs Sheikh Mohammed to compete for what are perceived as the most desirable prospects. And the man is a competitor. He wants to win every time.

If he wins every time, however, other competitors who, however wealthy, do not possess Sheikh Mohammed's bottomless pockets, will decide that it is useless to even try to buy horses they think he might bid on. That inevitably leads to nice horses who would otherwise sell well being led out unsold.

That conundrum is especially acute at Saratoga for three reasons. The sale is so small--less than 200 horses--that it would be all too easy for buyers to decide that it is useless to make the trip for such a small number of horses when Sheikh Mohammed is going to buy all the good ones anyway. They would, of course, be wrong (good ones ALWAYS escape the big buyers' attention...you just have to find them), but perception is everything.

Secondly, fair or not, true or not, Sheikh Mohammed is widely believed to be Fasig-Tipton's principal owner. Abdulla al Habbai, principal of the firm's nominal owner, Synergy Investments, is described as a "close associate" of Sheikh Mohammed. It is all too facile for cynical observers to leap to snide assumptions about what that really means. In the age of Faux News, the truth doesn't seem to matter as much as it once did.

Finally, both the management of Fasig-Tipton and, one hopes, Ferguson and the Sheikh, are aware of Fasig-Tipton's history. In the late 1980s Peter Brant and partners, including J.T. Lundy of Calumet Farm bought Fasig-Tipton. They came close to destroying it by running their own horses through the sale and creating bogus sales of those horses at inflated prices. Legitimate buyers and other consignors began deserting the sale and only John Hettinger's intervention to buy out Brant, plus years of gut-wrenching work by the management team led by D.G. van Clief, saved the company.

Sheikh Mohammed is not a commercial breeder and does not sell yearlings at Saratoga, but if buyers begin to feel that they are competing against "house money" at Saratoga, many of them will decide to buy elsewhere.

And that is why John Ferguson will stop bidding more often than you might think.