Finding the Next Winner

A yearling is being auctioned by Irish auctioneer Nick Nugent (second from left) in 2009 (Photo by APRH)

Dreaming of future glory, bidders in glamorous Deauville meet to fight it out – as they each year – for champion racehorses

Article for The Wall Street Journal Europe ($) (Front page story of the Weekend Journal and  republished in The Wall Street Journal Asia)

FOR FOUR DAYS every August, the racing fraternity from around the world — from Russian oligarchs and French ministers, to trainers and retired jockeys — descends on the picturesque seaside town of Deauville in Normandy, France, in search of one thing: a champion racehorse.

The invasion, which this year takes place from Aug. 13 to 16, marks the start of the European yearling sales, where nearly 500 1-year-old unraced horses are sold at the Elie-de-Brignac sales complex in the heart of town. Bidders — who are expected to spend about a combined €40 million during the event, if the last few years are an indicator — will fight it out in the sales ring for the thoroughbreds they believe have the potential to bring them glory.

The Arqana-auction-house-operated Deauville Yearling sale is one of the best places to find a future winner for Group 1, the highest-rated races with the largest monetary rewards, according to Blood-Horse MarketWatch, a thoroughbred industry trade publication. Past champions purchased here include Urban Sea, the filly who in 1993 caused an upset to win the Prix de l’Arc de Triomphe, France’s most prestigious race; Dream Well, the dual French and Irish Derby winner in 1998; and Lawman, a two-time Group 1 winner in France in 2007.

Deauville’s casino (Photo by Corbis)

“People have started noticing that horses sold in Deauville have gone on to do very good things,” says breeder Lady O’Reilly, whose stud Haras de la Louviere has produced many future winners for the sale, including the great Lawman.

Irish bloodstock agent Peter Doyle, who buys for various owners and trainers, adds: “The sale has got more popular and the catalog has got better and better over the years. I’ve been going for 27 years and I’ve bought many champions there.”

What’s more, Deauville is of the few sales around the world to have remained seemingly recession-proof. The average sales price of horses rose by 3.4% in 2009 from 2008, and the total gross sales in 2009 was a record €41.5 million, according to Bloodhorse.com. The sale has flourished, in part, because of the premium paid out for French- bred horses that race in France. In addition to the prize money, winners in France get an extra payout of 75% of the prize money at 2 years old, 63% at 3 years old and 48% at 4 years and older. The August sale is also considered a boutique sale, with a restricted catalog. This year, 480 horses are on offer and the expectation is that around 75% will get sold.

“There’s great competition to get your horses into Deauville, which means they’re the best horses going,” explains David Redvers, bloodstock agent and manager of the Tweenhills racing syndicates, who has a reputation for buying winners, “And because it’s in such a glamorous location — the very nature of the place itself and the people that go there — ensures a strong market.”

Cocktails at the Villa Strassburger (Photo by APRH)

Indeed, Deauville has long been the playground for the rich and famous, as well as the location of elite thoroughbred sales since 1887. The waterfront casino was the inspiration for Ian Fleming’s “Casino Royale,” it is the place Coco Chanel chose to open one of her first shops, and Omar Sharif can still be found serenading ladies in the dining rooms of five-star hotels such as the Royal Barriere. The wide boulevards are littered with designer boutiques and smart restaurants, and with its famously beautiful timbered Norman architecture, the town remains unspoilt and incredibly chic. It is against this backdrop, appropriately it seems, that in 2009 an average of €113,700 was spent on buying a horse, according to Arqana auction house.

Finding the right horse takes a bit of skill and a bit of luck. “Every time you buy a horse it’s a gamble,” says Mr. Redvers, “but it’s definitely calculated. The better you are at your job, the lower the odds get.”

To play the game, each buyer firstly has to work out their budget. The horses with the best pedigrees will be struck off most bidders’ lists in the knowledge that the wealthiest owners will price them out of the market. The most expensive yearling in Europe of 2009 was bought at the Deauville sale for €900,000. But, great horses have been bought for far less. In the 2008 sale, top French trainer Nicolas Clement bought the colt Pain Perdu, currently one of the best horses in France, for only €27,000.

Choosing which horses to buy also involves examining each individual animal out of its box, and watching it walk up and down the sales complex. All the buyers have their likes and dislikes, rather like gamblers on the racetrack picking a horse because it has four white socks or they like the name. “The balance is the most important thing to predict how it will gallop” says Mr. Clement, who bought Vespone, the champion 3-year-old middle distance horse of 2003 in France for €67,000 in Deuville.

Mr. Redvers says athleticism is key. “You want a loose limbed horse that has a large backside, with plenty of power,” he explains.

A colt by leading U.S. sire Storm Cat sold for €900,000 in 2009 (Photo by APRH)

Visitors to Deauville during the sales period will notice the particular carnival atmosphere that engulfs the town, and the four days can be fascinating for non-horse lovers too. Deauville’s golf courses, sea-side attractions, nightlife and shopping are a draw. The top-class racing throughout the weekend at the La Touques track, which is just a stone’s throw away from the sales complex and provides glory and riches to the victors, is a constant reminder of just how high the stakes can be. Last year the winner of Sunday’s top race took home a cool €600,000. And the first-rate polo, played within the racecourse grounds simultaneously, also brings in many visitors to the sale who might not usually attend, but make the most of the free admission.

In the end, it’s the horses themselves that garner the largest draw. “It’s their courage and bravery, their athleticism — it all starts with the horses,” Lady O’Reilly says.

The excitement and expectation are intoxicating, adds Mr. Redvers: “Every time you open a stable door, the next horse that walks out could be the next champion. That’s the dream — to find the next champion.”

– Lucy Pawle is a writer based in London