The Inquisitor
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 Original Post 2009-Jan-12, 10:30 AM
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The sale where money changes pockets rather than hands
John Schell - SMH
January 12, 2009
WELCOME to "Rortsville", better known as the Magic Millions sale. An extravaganza where million-dollar babies make headlines. But does money really change hands?
"This is a good walking colt," screams the auctioneer as a juvenile enters the ring.
Good walker. Please. Aren't thoroughbreds supposed to run?
At $2 million for the sale-topping Encosta De Lago colt you'd want a really fast horse. Or would you?
"This colt has a real stallion's pedigree," is another catchcry. "You've bought yourself a nice colt there."
Over the past five days, 885 yearlings were catalogued for sale at the Gold Coast.
Gai Waterhouse will train the $2m colt as well as a $1m Redoute's Choice colt. A $1.2m Redoute's Choice-Kapchat colt will go to the stables of David Hayes while he will also train a $1.1m colt by the same super stallion.
Those high prices look great in the sale statistics. They bump up the average and tell us what a success it's been despite the global economic crisis.
Great things happen at Rortsville.
And just who will race the $2m baby that is a brother to champion Sydneysider Racing To Win? Surely not worldwide breeding giant Coolmore Stud, which offered the colt for sale?
Of course it will. The Coolmore crew indicated it would keep part of the colt to race then breed with him. The remaining shares, however many, will be on-sold at the inflated sale price of $2m.
Take a look at the $1m Redoute's Choice-Strawberry Girl colt. Another with "a stallion's pedigree".
He was sold on account of Strawberry Hill Stud. That is the stud of advertising boss John Singleton, who is a part-owner of Magic Millions.
Singo has always been a great supporter of his own sale. Sells plenty of horses but buys plenty back. Don't be surprised if this one graces the track under the ownership of John Singleton and friends. He could even win next year's Magic Millions Classic sporting Singo's silks.
What about Hayes's $1.2m purchase. What a lovely looking colt he was. Well worth the money. What money?
The horse, offered by Widden Stud, was purchased as a weanling for around $620,000 by Peter Devitt and Les Gordon. After Hayes was announced as its trainer, who do you think he said he would prepare it for? Peter Devitt and Les Gordon. Yet another buy back.
There's nothing illegal or wrong with buying a horse back that you've offered for sale. But to most people the practice may seem to be aimed at obtaining the greatest benefit while remaining inside the law - Rortsville. Just be open about it.
(Finally, the truth about the Magic Millions!)
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Bundy
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2009-Jan-12, 11:07 AM
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The concept is not a new one....Dapto dogs for example were doing it years ago....not sure if they still do.....selling a pup via their auction got you into their big race.....if someone wanted (and did) to inflate the value of a pup for possible future advertising the owners would buy it back for a ridiculous sum. Many, many owners bought their own pups back simply to get into the race....they had to be sold via the auction to get there. MM looks no different....'cept the prices  |
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BillandTony
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2009-Jan-12, 11:10 AM
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Has been going on for years, but few dare speak of it for fear of pissing off the people who matter.
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Authorized
Steward
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2009-Jan-12, 12:21 PM
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 John Schell |
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Antitab#
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2009-Jan-12, 01:17 PM
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As usual old, incompetant Bart Sinclair couldnt see through the hype and wrote an article this morning glowing in the results of the Magic Millions.
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Hamish Crayfish
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2009-Jan-12, 05:55 PM
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I guess the syndicators have a ball and get handy extra margins out of it.
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InJapan5
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2009-Jan-13, 03:21 AM
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Brave man  |
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Kato
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2009-Jan-13, 06:42 AM
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Saw the article in the paper yesterday & I have to say how refreshing it is to read an honest assessment of an over hyped auction Good to know there's at least one legitimate journo |
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Jeunes
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2009-Jan-13, 07:20 AM
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I thought there were laws to prevent this sort of crap. The underbidder or successful bidders are being rorted so it amounts to fraud.
It used to happen in the real estate all the time when people used to make fake bids on behalf of owners and agents knowing where the reserve was. Some state gov't had to ensure new laws were brought in to reduce this kind of rorts.
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gallopers
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2009-Jan-13, 08:09 AM
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surely they are entitled to bid and buy back thier own horse.
maybee they should announce if an owner is bidding, but that could get messy as the owners sister or friend could then bid and buy.
whats the answer if an owner wants to run in the MM and the horse has to go through the sale.
?
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BurntToast
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2009-Jan-13, 08:42 AM
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The simple answer gallopers is that they don't get to go through the sales and run in the MM if the owner/breeder wants to keep them. It has been outlawed in most states in real estate - all bidders must now register before the auction starts etc., but obviously horse auctions don't fit under that legislation. I guess everyone can bypass the sales and just let all the breeders piss in their pockets and buy their own horses back, that'll be good for the industry  |
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gallopers
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2009-Jan-13, 09:36 AM
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BT, i dont think its that simple mate. If you breed a horse and decide you would like to run it through the MM and are prepared to buy it back to qualify for thier races, surely thats ok. Its up to the individual to set a price they think a horse is worth and bid to that price. I doubt there would be a person buying at the MM that didnt know breeders sometimes buy back thier own horses to qualify for the MM races. Its not like some secret.  |
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Jeunes
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2009-Jan-13, 09:46 AM
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The problem is not the breeders buying their own horses. If I I was bidding on a horse and I was competing against the breeder / owner who was artificially putting up the price with their bidding, then if they drop out, I would be paying an inflated price. Thus the question is it fraud as the auctioneers usually don't care if they are getting a percentage of the sale price. The other question is that the sale convenors usually only choose a certain number of yearlings to be sold at the sales depending on the sale. Thus some genuine breeders / vendors are then being deprived of selling their horses due to this practice of buybacks. Call me naive as I don't know too much regarding the breeding industry but how the vendors explain buybacks on the profit / loss side unless it is a tax rort as well with creative accounting.  |
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gallopers
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2009-Jan-13, 09:53 AM
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The problem is not the breeders buying their own horses. If I I was bidding on a horse and I was competing against the breeder / owner who was artificially putting up the price with their bidding, then if they drop out, I would be paying an inflated price. Thus the question is it fraud as the auctioneers usually don't care if they are getting a percentage of the sale price. The other question is that the sale convenors usually only choose a certain number of yearlings to be sold at the sales depending on the sale. Thus some genuine breeders / vendors are then being deprived of selling their horses due to this practice of buybacks. Call me naive as I don't know too much regarding the breeding industry but how the vendors explain buybacks on the profit / loss side unless it is a tax rort as well with creative accounting. if you do your homework and value a horse at $100,000 just bid to that amount regardless of the breeder or another vendor bidding. |
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MagiC~*
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2009-Jan-13, 10:07 AM
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I think a solution maybe for breeders wanting to get their horses qualified for the MM would be to pay a fee and not send their horses throught the sale at all.
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