Unreservedly Unreserved

It's been a fortnight since my blog Transparency? I Can't See It was posted and it elicited plenty of reaction.

It was picked up by a couple of media outlets which had the effect of rapidly increasing the hit-rate on this site - Google might pay me for running those ads at the foot of the page - and I've even had an approach from a non-racing TV channel which is intending to spotlight the industry on a regular basis.

Several bloggers added their comments to my piece which you can see under the original post, and I thank them for entering into the debate.

There are a range of views: not-to-be-wondered-at voices of discontent, balanced by others who think people should spend their money elsewhere if they're not happy with the marketplace.

I've also had a number of responses directly to my personal email. One, from a person holding a prominent position in the industry, felt that until purchasers were willing to disclose to vendors who they were buying for then there was no case for vendor transparency. This seems slightly at odds with how the commercial world normally operates, summed up by one blogger who wrote that the golden rule is "he who has the gold makes the rules", which I loosely interpret as 'I want to know where my money is going'.

(As an aside, a virus destroyed my email at the weekend so I'm strategies49@hotmail.com until further notice!).

Someone made mention that sales would be tidier if they were conducted on an unreserved basis. This is something I have long favoured.

Anyone who has been to the US, in particular Kentucky, where every horse is knocked down to a buyer, be it a vendor's bid or a purchaser's, appreciates it's a better system. Better than the charades we're constantly exposed to out here where we are asked/expected to accept that the name on the result sheet represents an arms-length transaction. I can't understand why some well-respected 'buyers' allow themselves to be humiliated in this way.

Make no mistake, collusion between vendors and buyers can and would occur just as readily in an unreserved environment. If people feel a need to create illusions at auction, for whatever reason, then there's nothing to stop them. But whoever owns the horse pays commission on the last bid and this may, over time, encourage a more frank approach.

In the US, I don't sense there's such a stigma attached to seeing RNA (reserve not attained) on the result sheet as there is passed in out here. Using RNA encourages sales after the fall of the hammer. If the last bidder was the vendor or his agent, they tick the box for a buy-back and it's then shown as an RNA. In our part of the world, once a vendor's dummy bidder signs the purchase docket but the horse goes back home, it's pretty difficult to drum up interest when the sheet says sold when in fact it wasn't.

They make no bones about it in Kentucky. Before the auction, they announce that the vendor may bid, that agents for the vendor may bid and even the auctioneers may bid on behalf of the vendor. So you know where you stand. Treat every auction as alive. Work out what you think the horse is worth and bid up because you will have no idea if the bidding has passed the reserve and the hammer is definitely going to fall - invariably without warning.

Another positive spin-off from the unreserved approach is that it does away with the auctioneer calling for ridiculously high opening bids (based usually on the vendor's inflated idea of his horse's worth) then laboriously and embarrassingly dropping down the scale until someone is brave enough - often the auctioneer himself - to stick up their hand.

Auctioneering is different in the US, both in style and in procedure. An 'announcer' introduces the horse with a succinct wrap-up of its selling points, plus any announcements required under the conditions of sale. With barely time to draw your breath, the auctioneer then takes over. It's his job simply to take and advance bids, not to wax about the quality of the object. He won't waste time. Because he knows the reserve, the auctioneer just kicks it off at a sane level and gets the ball rolling - the implication is, bid up or miss out. Vendors or consignors in an unreserved sale have no business to be anywhere near the auctioneer. They are out the back protecting their horse in the bidding, if they must. Compared with our long, drawn out, often personalised auctioneering encounters where the auctioneer thinks he's the star of the show, it's refreshing and businesslike. And I believe they get every last bid in the house.

They figured out the best way and they got it right.

The conditions of sale are not read out prior to the start of the auction. Keeneland's conditions run to 23 printed pages, for God's sake. As a preamble, they pointedly draw your attention to the rules, mention some important points and describe how the auction will be conducted.

I'm sick of people telling me it's a legal requirement here. If it is, it's yet another case of the law being an ass. No one is gathered around listening, it's just some pimply-faced intern trying to untwist his tongue in front of an empty auditorium. For those who have had a bit of practice at it, they rip through it so quickly you can't understand what they're saying even if you wanted to, making an even bigger mockery of the process.

Why don't we ditch this ridiculous practice!