Just after three o'clock last Wednesday the arena hosting the Goff 's Million yearling sales in Kildare began to fill quietly. A daughter of Montjeu was walking effortlessly around the ring as a man standing above her spoke fast and loud in a language that might well have been English. He was enticing bids in increments close to the average industrial wage but this filly was not the reason for the sudden swell in attendance.

People were drifting in to see what would happen to Lot 517, who was about to enter.

Those who believe flat racing is merely a sport for the pampered rich should visit the yearling sales to witness the full might of a whole industry. Horses that make it as far as here are about halfway along a supply chain that starts with a meticulously planned mating and if it routes successfully through big-race triumphs it ends with a return to stud where the circle of life starts all over again. Thousands of people are employed on this chain and fortunes are made . . . and just as often lost. It's been said that the best way to make a small fortune breeding horses is to start with a large one, so what happens in two minutes in the sales ring decides what price stallion is visited next spring and whether there will be pedigree improvements bred into the owner's bloodstock.

Lot 517 had no pedigree concerns at all. Three years ago this Sunday his nephew, Bago, cut down a strong field to win the Prix de l'Arc de Triomphe at Longchamp. If the victory was a minor surprise on form it was almost predestined on breeding. Bago's dam never made it to the races but her mother, Coup de Genie, was the best two-year-old filly in France and a full sister to the great Machiavellian . . . a champion both on the course and at stud.

To date, Coup de Genie has bred four runners and all have won top-class races. Her daughter, Denebola, was the champion of France at two and Lot 517 is her full brother, by Storm Cat. In a sale that attracts some of the best-bred horses in the world, this blood stood out as bluer than blue.

Storm Cat is reputed to be the world's most expensive sire at 500,000 a cover and is responsible for a long list of greats in America as well as champions such as Giants Causeway and One Cool Cat here. When the Niarchos family, owners of Lot 517, decided to send their mare to him, his yearling colts were averaging well over 1m at public sale. By the time he walked in to the sales ring on Wednesday it had plummeted to only a quarter of this. It doesn't take an actuarial genius to work out this is a high-stakes game subject to intangible swings in sentiment, but even so there were many who thought that with the brilliance on his damside that Lot 517 might still break some records as there was both money and big spenders about.

There were reasons for the optimism. The previous day a daughter of Saddlers Wells was bought by the Coolmore syndicate for 2.4 million, the highest-priced yearling in five years, and horses bought at this sale are exclusively eligible to run in two lucrative races next autumn, an initiative that has helped the average price rocket by over a third in the last couple of years. Perhaps the most crucial trend of all though is the continuing influx of new money much of it from Eastern Europe. As the two biggest buyers of yearlings in the world, Coolmore and Godolphin, are still boycotting each other's stallions this purchasing diversity is hugely important to the industry. Racing's version of Roman Abramovich could be just around the corner.

Lot 517 wouldn't have known all this of course as he sauntered behind eagleeyed bid spotters ready to yelp loudly when they recognised an imperceptible nod of a head or twitch of a finger that can signal the promised land for a lucky vendor. The little bay colt was blissfully unaware of the pressure as the auctioneer eulogised the feats of his family and then asked for an opening bid of a cool million quid.

Most eyes stole a glance to the top of aisle 'B' where the Coolmore delegation had congregated. Nobody moved.

The requested opening bid dropped like a stone and after some minor skirmishes stopped abruptly at �550,000. John Magnier sat down.

The auctioneer tetchily reminded buyers of the pedigree they were missing out on and pleaded for another bid, but only tumbleweed blew through the arena. "I am not selling him for that. I won't sell him for that. I am not letting him go for that." He waited another beseeching moment before rapping his hammer on his rostrum. "Lot 517. Not Sold."

The arena emptied almost as quickly and quietly as it had filled. Two men queuing at the exit were trying to make sense of what hadn't happened. "Jesus, what's the world coming to if that is not enough. Half a million is not enough!" Well, not enough for Lot 517 anyway.