Presentation to the Darley Flying Start Conference at Keadeen Hotel, Newbridge, Ireland
October 25th 2006
Sarah Kilby Presentation Text
Goffs Million Success – Perception or Fact?
Good Afternoon ladies and gentlemen, I am Sarah Kilby and for the next fifteen minutes I am going to discuss the question, Goffs Million Success – Perception or Fact.
The Goffs Million Sale concept was thought up by Eimear Mulhern in early 2005 when she took over as the new Chairman. Knowing the industry inside out, and been a top sales consigner herself with Meadow Court Stud, few people were in a better position than Eimear to take on this role, however her task wasn’t easy, Goffs was facing major financial troubles after a slump in returns of the 2004 Orby Yearling Sale which was supposedly the premier yearling sale in Ireland. Therefore the company needed dramatic action in order to turn their fortunes around and regain the confidence of the industry.
Sales races have been run for the last few years in both Britain and Ireland and have proved to be highly competitive contests with full fields. The original idea was actually founded by Goffs back in the late 80’s and was known as The Cartier Million and was run at Pheonix Park. As you can imagine, a race worth a Million pounds in those days was considered highly lucrative and many top class owners and trainers went out to win it. The race was run for 2 years but was scrapped when the recession of the early 90’s started to hit the economy. Nowadays, albeit less valuable, both Tattersalls Ireland and Doncaster Bloodstock Sales run sales races.
The Goffs Million and the Fillies Five Hundred, which will also become a million in 2007 work on the basis that any horse is eligible that has passed through the Million sales ring. The owners pay €16k per horse in entry fees which are staggered across the year, the first payment in January and the last in September at the final declaration stage. Although this is a large amount of money to enter a race this is essentially where the main bulk of the prize money comes from and obviously there is huge incentive to win with €1 million to the winning horse. Just to put it into context this year’s Baileys Irish Champion Stakes total prize fund was one Million Euro, the winner getting €599k, which is a top class Group 1 race on the International calendar, so there is no doubt that there is huge incentive to run a two year old in the Million.
While the Million Race concept itself was a great idea and would act as an added ‘golden carrot’ to buyers of yearlings at the sale, it would not be enough on its own to turn around the desperate prices of the 2004 Orby Sale. The only way that the sale could be an initial success was to ensure that the quality of yearlings on offer was of the highest order and there was a wide base of buyers there. Due to the success of Tattersalls Houghton Yearling Sale and also the high strength of the Guinea in England in comparison to the Euro, Irish vendors were sending their best yearlings over to Park Paddocks in Newmarket. Therefore Goffs needed to obtain the trust of the vendors in order to persuade them that it would be worth their while to send their yearling to the Goffs Million and also to regain the confidence of the buyers that the right product would be on offer. As well as this they needed to attract new buyers into the market.
Eimear and the Goffs team took a largely hands on approach to this and more or less pretty much got out there among the vendors and said (as seems to be one of the most commonly used phrases in the Irish vocabulary) ‘Come on lads, you know yourself, we need this to work’. From speaking to vendors I think the feeling was that Goffs put so much effort into winning them over that they couldn’t really not support them and after all, it is in Ireland’s interest to have a flagship yearling sale when they stand some of the best stallions and breed some of the best horses in the world. In fact it would seem downright ridiculous if a country known so well for its top class racehorses did not have a yearling sale that was known as been one of the best sources of top class performers in the world. As well as speaking to the vendors, Goffs, working alongside Irish Thoroughbred Marketing put a huge marketing push on the Million Sale.
The sale was launched at a number of high profile locations around the world including Dublin, the USA and the famous ‘Tramp’ nightclub in London all of which were attended by celebrities, bloodstock agents, owners, trainers and vendors, basically anyone who was anyone in the racing world was involved and the fact that they were able to use the Ryder Cup as a launch for the Million Raceday was a huge PR Coup. All this went towards ensuring that the right people, that is people with the financial potential to buy an expensive yearling, knew about the sale. The launches were backed up by the production of a glossy brochure mailed worldwide and overseas agents working alongside ITM in order to try and attract new foreign markets.
So on to 26th to the 28th September 2005 and the first running of the revamped Million Sale. The well documented and still on going Coolmore/Darley sire boycott must have provided the Goffs team with some fairly pensive moments leading up to the sale, and combined with a large degree of scepticism from vendors and buyers meant that they were well and truly put under the spotlight to produce a good sale. However the arrival of Sheikh Mohammed’s helicopter was a positive sign of things to come and the sale ended showing a huge upturn in comparison to 2004.
Granted the European market across the board was strong, Tattersalls reported an increase in average price from 102,796gns in 2004 to 119,509gns in 2005, and Doncaster an average of 32,158gns from 24,643gns, but it cannot be denied that Goffs efforts to revamp the Million Sale appeared to have worked. They managed to get the right buyers to the sale, a number of which consisted of ‘new’ Irish money, mainly due to Ireland’s current healthy economic climate in the building and construction industry. They provided a top quality product in a range of well selected high class yearlings and they also provided a million euro bonus that buyers would hopefully be chasing in twelve months time.
Just to look at the figures this graph shows the number of yearlings offered and sold at Goffs for the last four years. The next two graphs show the aggregate figures and average figures over the last four years. From looking at these figures we can say that small but select book sizes in 2002 and 2003 showed good averages and aggregates then a relatively large book size in 2004 showed a poor aggregate relative to the previous two years and a very poor average. This could well be attributed to a sale of high quantity and poor quality however 2005 showed a good sized book, larger than in 2002 and 2003 and returned an excellent rise in average price and overall aggregate. Therefore you could say that Goffs produced a large but quality selection of yearlings, all of which were sold were eligible to run in one of the Million races in 2006.
And that brings me onto the raceday itself. Any of you who are sat here today who were at the Curragh cannot deny that there was a huge buzz to the place and it really was a fantastic day out. In terms of Irish racecourse attendance the figure was great at just over 11,000 and the day got a great amount of media coverage which was undeniably helped by the Ryder Cup. Both the Shelbourne Fillies Five Hundred, although controversial and the Million itself provided two top class fields. In fact eleven runners of each race hold future Group 1 entries including the English Derby, the Irish Derby, Irish Oaks and Irish 1000 and 2000 Guineas and runner Charlie Farnsbarns finished 2nd in Saturdays Group 1 Racing Post Trophy. Therefore past criticisms of sales races not having high quality fields cannot be applied to these races, especially when the winner Miss Beatrix was already a Group 1 winner taking the Moyglare Stud Stakes earlier in August over course and distance.
I think that this is an important factor in the success of the Million Concept in the future. The sale must still be a source of high class racehorses with classic potential, not just two-year-olds that are capable of winning the sales race. The huge range of owners in the two races is also an indication of the wide appeal of the Million concept and an indication of the vast diverse of people who bought at the Million Sale. For instance both Coolmore and Sheikh Mohammed had horses in the race, there were nine syndicate owned horses in the Million and five in the fillies race, Bill Durkin, owner of Miss Beatrix is predominately a National Hunt man and Wait Watchers owners owns a chain of Chinese Restaurants. There was also a large number of English trained runners and I think it is significant that the Highclere syndicate sent horses over for the race as historically they would buy horses to be aimed at the top end of the Pattern. Interestingly they did almost win the Cartier Million in 1989 with Miss Demure. Therefore all in all the day was a great success and provided Goffs with a fantastic springboard into the 2nd year of the sale the following week.
The sale was hailed as a great success with the figures in the table again showing a rise in average and aggregate. Again the sales benefited from the booming Irish economy, but also from a range of new owners who you could say are after winning the race. For instance as I’ve already mentioned Bill Durkin owns Miss Beatrix and there are a number of owners, including himself who were previously National Hunt based buying horses at the sale. In fact one of these, Duncan Davidson, director of Yorkshire based Persimmon Homes and in the past always a National Hunt man will own the €525k Danetime colt bought by agent Amanda Skiffington with a view to winning the race.
According to agents and buyers the sale featured a high quality selection of yearlings, mainly because those vendors who were not in on the sale last year wanted to be this year and there was a very strong market for well bred fillies, due to studs purchasing future broodmare prospects.
So I think it is fair to say that the last two years have shown that it is fact that the Goffs Million is a success. As I have already mentioned you could say that the sale is only back up to the same success levels as the 2002 and 2003 Orby sales, however I think it is significant that Goffs have managed to increase the book size to a good level yet maintain quality yearlings across the board and there is no doubt that the race has attracted new buyers. However I do think there are a range of challenges to Goffs in order to ensure that the Million remains a success over time. Currently the bloodstock market is strong, as is the Irish economy, therefore it is important that Goffs does not rest on its laurels and takes measures to ensure that the sale becomes robust enough to stand possible economic and industry challenges in the future.
Having spoken to Goffs I think they are very aware of this need to continually strive to innovate and improve their product. Their plan is to make use of the spring board effect that they have created and used continued strong marketing campaigns such as the sale launches and strong overseas presence in order to keep trying to attract new buyers whilst maintaining those that they already have. It is also important to Goffs that they listen to their vendors and respond to any valid concerns in order to ensure that they keep sending the best quality stock as. As is the case with any business, to be a success you need to have a good quality product. A possible concern that was raised by purchasers after this year’s sale was that the yearlings may be selected in the future as sharper two-year-old types that may be suited to winning the race rather than the three-year-old, classic horse that the premier sales are known for. In response to this Goffs are looking at running another race next year for the specific two-year-old type possibly over 6 furlongs as opposed to the 7 of the Million. The Million was run over the distance of 7 furlongs and at the back end of the year to make it a valid race option for those horses which may be possible three-year-old classic contenders.
The raceday is certainly an aspect that Goffs is looking to expand on. They have already announced that the fillies race will be worth a million euro next year and the sponsors, Shelbourne Lodge Hotel and Brown Thomas are very keen to stay involved. I think that the sponsorship is an important aspect as while the entry money for the race is not all payable at once been staggered over time it is still a significant sum to stump up, therefore they need to ensure that the pot is topped up with sponsorship contributions. However the new development of the Curragh and its facilities should make racing there much more saleable from a corporate entertainment point of view, as well as raising its media profile, therefore if the existing sponsors did threaten to pull out, if continued to be run on the Curragh the race would offer a valuable sponsorship proposal, especially if Goffs continue to use the high profile style launches around the world.
So to conclude, yes the Million concept has been a success but it is definitely early days. I think it will be interesting to see how it develops over the next few years, especially if Tattersalls decided to bring in a similar idea. However Goffs appear to have a very strong team behind them and are committed to ensuring that this sale remains a success. Thank you very much for your time ladies and gentleman.
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