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Home / Sport / Racing

The business of racing: Equine diamonds await buyers at Karaka

Michael Guerin
By Michael Guerin
Racing Editor·NZ Herald·
28 Feb, 2022 07:37 AM6 mins to read

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General view of auction. Photo / Photosport.co.nz

General view of auction. Photo / Photosport.co.nz

The thousands of Southern Motorway commuters who stream past Karaka every day will be largely oblivious to the fact next week they will be just 100m from sporting greatness.

The only problem is the greatness at the thoroughbred racing's National Yearling Sales is still to be discovered, hidden inside horses a year or usually more away from starring on the racetrack.

They are equine school kids who might become equine All Blacks and that $100 million guessing game is where the fun begins next week. And lives change.

Horse sales are nothing new in this country, with its connection to the land and a proud history of producing world class racehorses.

But what is less widely known is the Karaka sales complex, run by New Zealand Bloodstock and rated one of the iconic sales grounds in the racing world, a diamond kept polished but only brought out of its box for about a fortnight every year.

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It will be at its most dazzling next week, with the sale bringing nearly 1100 of New Zealand's best bloodlines pulsing through the one-year-old thoroughbreds to the market place.

Horses have sold at Karaka for $3.6 million. Others have sold for $1000.

In 2008, a yearling colt sold for $110,000. He grew to be champion racehorse So You Think and a majority share sold in him valued him at close to $50 million.

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If that makes sales week, which starts next Monday, sound like a rich man's playground, that is misleading.

One of the fasted-growing developments in horse racing, particularly in New Zealand and Australia, has been in professional horse racing syndications: less buy-in, same thrill.

That can turn relatively small investments, even a few thousand dollars, into 1000 per cent profits or even more.

Just last year, top Kiwi racemare Avantage, who was bought at Karaka for $210,000, retired the winner of $2.1 million on the track and was sold for a world record online auction price of $4.1 million.

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While small players can also win big at the yearling sales, the market for racehorses and breeding stock worldwide has stunned even the most optimistic analysts since Covid came visiting just a few weeks after the Karaka sale in 2020.

Some countries halted racing briefly but the industry, which already runs on far stricter rules, restrictions and protocols than most sports, with almost all participants being professional, was perfectly-placed to bounce back quickly.

In a world starved of live sport, racing largely continued, and because for many the primary enjoyment is based around the betting, televised racing is just as good as being there. And the beer is cheaper.

Racing rolled on and the bloodstock market took off, fuelled by rising stakes, international demand and, quite frankly, bored people looking to spend money they would usually spend on now non-existent overseas travel.

Racing in New Zealand has been through its struggles, ones it seems to be emerging from, but the bloodstock prices are not a product of the domestic market.

The promised lands of horse selling are Australia and Hong Kong, and New Zealand horses, with strong bones and in-bred toughness, are popular in both.

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"We are very lucky to be living right next door to Australia, where racing is thriving," says New Zealand Bloodstock managing director Andrew Seabrook.

"New Zealand horses like Verry Elleegant [Melbourne Cup winner] and Probabeel winning at the absolute highest level in Australia means there will always be demand for our horses.

"That success, and all the classic races we win over there, has been huge in the last two years, and the market for horses over there has been very, very hot.

"We sell horses, often at real value compared with overseas markets, who can beat Australian and international horses in their $1 million races or even the dream races like the Melbourne Cup."

The Hong Kong market is smaller but crucial, as many New Zealand horses are sold there after they enter training or even race here first.

That helps boost the domestic buying market as horses purchased by Kiwis can stay here, trial or race, and attract overseas offers of well over $1 million.

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Auction in progress inside the auditorium. Photo / Photosport.co.nz
Auction in progress inside the auditorium. Photo / Photosport.co.nz

"Those markets, whether at the yearling sales or for going horses later in life, are huge and create their own economies," says Seabrook.

"And we also have some really good things happening in New Zealand racing, particularly in Auckland.

"It is an exciting time."

While syndication has made racehorse ownership cheaper, the reality is most people will never own a horse and many would never want to.

That doesn't mean they won't make money out of somebody else owning one, though.
Racing is a huge contributor to the economy, with more than 58,000 full or part-time employees, some in the most unusual of ways.

There are horse dentists, masseurs and chiropractors. There are entire businesses based around horses getting fit walking on aqua treadmills (it builds muscle without strain on joints) and there are people who help horses, well, breed.

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They, and the trainers, jockeys, stable staff, stud farm workers, racing club employees and TAB staff all pay tax just like everybody else, so the economic footprint is huge.

Next week is when it is loudest, though, the week when the rubber meets the road.

Close to $100 million could change hands, even though many of the hands won't be at Karaka or even in the country.

"Buyers purchasing from overseas is nothing new, as a lot of owners will buy through their trainer or agents who are here to advise them," says Seabrook.

"But for the last two years, we haven't been able to have almost any overseas visitors here, owners, horse trainers or even overseas agent. It has been very challenging."

NZB met the challenge by super-sizing their existing auction website which now provides real time bidding and broadcast of the sales ring, and has been lauded in the bloodstock world for its speed and efficiency.

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"We had to innovate and move quickly because of Covid and the market has responded well because both the product and platform are good," says Seabrook proudly.

"And our vendors who sell the horses have moved with us, they now provide amazing information to the market in videos, pictures and almost everything potential buyers could want to know."

Still, the national sale is more than just business. For many it is an annual pilgrimage, one NZB did everything to enable them to attend.

They moved this year's sale from its traditional late January date to next week with the hope our borders would be open.

But with only Kiwis allowed home yet, a few based in Australia have braved home isolation to be at Karaka next week and will act as go-betweens for those who couldn't make the trip.

Which raises the obvious question: will those now used to buying from afar return when the borders open up?

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Or will Karaka, which will not be open to the public next week because of the Red Light restrictions, become more mouse clicks than baby horses and bubbles?

Anybody who has witnessed the theatre, drama and athletic beauty of a high-end horse sale, just 100m from the Auckland motorway, will know the answer to that.

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