You're looking at an age-old phenomenon," said John Finney, who runs the Saratoga Yearling Sales. "For as long as we can remember, the best thoroughbred horses have been sought by whoever in the world has the most money. When the Japanese had it, they were buying. And now it is the Arabs."
Yet no group of buyers has ever had such a phenomenal impact on the racing and breeding business as these mysterious men with their petrodollars. At the Keeneland sale last month, the two major Arab buyers acquired $25 million worth of horses -- one-quarter of all the money spent at the most expensive yearling sale in history. The Arabs dominate the market so much that Finney said, "Within a given sale, there are two horse sales; one is theirs and the other is everybody else's."
Just two or three years ago, Arabs generally appeared to be wary of the horse business; they felt, some observers say, a bit ill at ease socially in this cliquish little world. The man who broke the ground for them was Mahmoud Fustok, a Lebanese related by marriage to the Saudi royal family. He quickly built his Buckram Oak Farm into an international racing operation and became well-known on both sides of the Atlantic.
Then came Price Khaled Abdullah of Saudi Arabia, who constructed the most lavish stud farm in Europe and last year began buying millions of dollars worth of yearlings at American sales. Then came Mohammed bin Rashid al Maktoum and two of his brothers from the tiny Persian Gulf sheikdom of Dubai. This year a new group, from Kuwait, got involved in the business. All had the same model and rival -- Robert Sangster.
The Englishman realized that in an era when successful, well-bred racehorses can be syndicated for $36 million (as was Conquistador Cielo Wednesday), it was a good investment to buy every superbly bred racing prospect that he could. The successes would more than compensate for the failures. Other people gasped at the money he spent, but Sangster knew that yearling prices were, in fact, cheap, and from the mid-1970s until last year he dominated the market. But when a number of Arabs decided to play the game, too, Sangster had his first real competition, and even people accustomed to seeing high prices for horseflesh were stunned by what happened.
"We used to think that Louis Wolfson was rich, that John Olin was rich," said Kent Hol-lingsworth, editor of The Blood Horse, referring to the high-flying American yearling buyers of the 1960s. "But these men have wealth that is almost literally inexhaustible."
Not only did Sangster and the Arabs bring more resources to the sale than anybody else, they brought a different outlook. "What disciplined prices in the past," Finney said, "was the fact that old-line Eastern United States money was very conservative by nature. To have peer-group respect demanded that one be restrained and prudent. But the buyers now value conspicuous consumption more than conspicuous restraint."
Sangster and the Arabs tend to pursue the same horses. All have competent advisers; all look for bloodlines that have been most successful in the European classics, notably those of Northern Dancer and his sons. When bidders are determined to acquire the same individual, the results can be astonishing. Last year, Sheik Mohammed outbid Sangster for a world-record $3.5 million Northern Dancer colt. This year at Keeneland, Sangster outbid the sheik for a $4.25 million Nijinsky colt. Tonight, the sheik paid $2.1 million for a daughter of The Minstrel, a record for a yearling filly.
The influx of Arab money naturally delights breeders, but it does have some serious consequences. It has made the breeding business extraordinarily chancy. A yearling might sell for $1 million if two Arab groups happen to like him, or go for $200,000 if they don't. Because Americans can't compete with the foreign buyers, the best thoroughbreds are now going to race in Europe. Some people in the industry worry that instead of sending the best horses back to this country to stand at stud -- as usually happens now -- the Arabs may keep them and breed them, possibly creating a thoroughbred version of OPEC.
But for the time being, the Arabs are responsible for the economic health of the breeding industry. Hollingsworth calculated that the average price of yearlings bought by Americans at Keeneland was $197,000--just about the level of two years ago. The average price of yearlings bought by foreigners was more than $400,000. "We had better hope," he said, "that the Arabs don't decide one day to fold their tents and go home."