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Stakes are high for the first-season sire gamble

NOTHING in the thoroughbred world is more talked up, chatted about, promoted, dissected, and gambled upon than the first-season sire.

Such is the interest in the phenomenon that, for the last several years, they have even had their own betting market. The main gamble, however, is placed by the vast number of breeders and buyers who pile their chips each year on what they hope will be a lucky number.

You can see the popularity of first-crop sires each year in the double-digit entries of their first yearlings in the sales. Even so, it is still surprising to see the extent to which the freshman sires invariably work their way into the general two-year-old standings.

As of Monday, for instance, we have Oratorio (in seventh place), Footstepsinthesand (ninth), the deceased Le Vie Dei Colori (tenth), Pastoral Pursuits (thirteenth), Avonbridge (fourteenth) and Chineur (sixteenth) among the top 20 sires of two-year-olds.

These are the top six first-season sires of the moment; but where will they be four, six, or eight years from now?

The question, in a general sense, has interested me for a long time, and a few years ago I began compiling data on US freshman sires. Because the data includes yearling sales information as well as racing statistics, the broader American market appealed to me as less biased towards a narrow range of sires, buyers and end users.

The data includes the top 30 stallions ranked by first-season two-year-olds' progeny earnings from 2001-2006, as well as stallions retired with fees of $10,000 or more, and selected sires who have been highly ranked with their later crops.

I also included second and third-season earnings, general North American earnings for 2008, number of Group/Graded winners, per cent stakes winners to foals, current average earnings index, comparable index, average earnings per starter and median earnings per starter.

To gauge commercial success, I looked at first-crop yearling averages, number of first crop two-year-olds and number of 2009 two-year-olds, as well as stud fees from the stallions' initial crops to the present.

Finally, to measure the wisdom of the experts, I incorporated the results of a Thoroughbred Times survey which each year since 1997 has asked four industry professionals to name, in order, their top five choices for freshman sire.

Giving each sire points according to whether it was picked first, second, third etc, I calculated the experts' predictions against the real results.

To begin with the experts: they were not good predictors. Although with a total of 20 shots taken each year, someone usually managed to hit the target, there was a near zero correlation between the experts' consensus opinion and the sires' actual first-season standing.

The experts did slightly better when their choices were compared with third-season standings, but there was again a nearly nil correlation between their picks and the 2008 general sire standings. Theconclusion: if you want to know who the leading new sires will be, go stick a pin in the stallion catalogue.

Moving on to commercial results, it appears that successful first-season sires have managed to keep a foothold. There were 30stallions who were ranked in the top five with their first two-year-olds; four were exported or died.

Of the remainder, 18 (70 per cent) have a larger two-year-old crop this year than their initial crop. Their average initial crop size was 82, while their average current crop size is 109 – an increase of 33 per cent. This compares to a 13 per cent increase for all stallions in the study.

Another way to measure commercial success is to compare the sire's fifth crop fee (the year after his first two-year-olds run) to his current fee. For successful first-season sires, their fifth crop fee might be their highest.

The same group of 26 top-five stallions yielded 14 (54 per cent) sires who had higher fees in 2008 than in their fifth crop. For the 14, their fifth crop fee average was $29,000, while their 2008 average was $69,464 – an increase of 140 per cent.

For the 12 top-five freshman whose fees did not increase, the average fifth crop fee was $50,625, while the average 2008 fee was $32,792 – a decrease of 35 per cent. This group's averages were affected by dramatic fee reductions for Giant's Causeway ($200,000 down to $125,000) and Fusaichi Pegasus ($125,000 down to $45,000).

The most important measure of success is racetrack performance, and here there was some indication that first-season results are no mere flash in the pan.

Ofthe 26 remaining stallions who were ranked in the top five with their first two-year-olds, 15 (58 per cent) achieved top five status in their second season, while 14 (54 per cent) achieved top five status in their third season. A total of 11 stallions (42 per cent) were ranked top five in all three seasons.

Additionally, there were strong correlations between first-season ranking and per cent stakes winners to foals to 2009, and between first-season ranking and current average earnings per starter, although these figures could be heavily biased by the first-season results.

For the full group of 202 sires, the attrition rate was close to 30 per cent, as 16 stallions died, 37 were exported and five were untraceable.

While this suggests that stallion owners are among the biggest gamblers, the ultimate punt is taken by the thoroughbred industry itself, as it bets its future every year on a new group of freshman sires.

US FRESHMAN SIRES 2001-2006 and subsequent performance, shown by ranking in crops (DATA FROM BLOODHORSE.COM)
Year Sire 1st crop 2nd crop 3rd crop NA 2008
2006 Street Cry 1 1 1 20
2006 Johannesburg 2 2 2 89
2006 Pure Prize 3 10 9 72
2006 Officer 4 7 7 68
2006 Orientate 5 4 6 48
2005 Tiznow 1 16 2 3
2005 El Corredor 2 5 4 36
2005 City Zip 3 6 5 44
2005 Songandaprayer 4 11 13 101
2005 Broken Vow 5 2 1 31
2004 Successful Appeal 1 15 21 109
2004 Yes It's True 2 4 1 21
2004 Fusaichi Pegasus 3 2 6 47
2004 Giant's Causeway 4 1 1 4
2004 Cape Canaveral 5 19 15 143
2003 Stravinsky 1 3 3 UR
2003 Victory Gallop 2 1 4 23
2003 Doneraile Court 3 13 19 29
2003 Forestry 4 2 2 62
2003 Old Trieste 5 16 5 UR
2002 Distorted Humor 1 2 7 2
2002 Awesome Again 2 6 2 15
2002 Elusive Quality 3 5 6 14
2002 Tale Of The Cat 4 3 3 6
2002 Grand Slam 5 1 4 10
2001 Valid Expectations 1 4 5 145
2001 Open Forum 2 6 12 UR
2001 Smoke Glacken 3 5 3 41
2001 Siphon 4 21 18 UR
2001 Louis Quatorze 5 8 19 134
 

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