July 5, 2020

What’s a Kentucky Derby win worth?


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Kentucky-Derby-Horse-Racing-Orb-Shug-McGaugheyFrom The Financialist

The Kentucky Derby, held in Louisville, Ky., is the most famous horse race in the world and has been called the most exciting two minutes in sports. Its winners, including Secretariat, Seattle Slew and Affirmed, rank among the most celebrated horses in racing history. But for all the adulation, the Run for the Roses has a mixed record in producing top racing sires. Producing offspring is the main source of a horse’s value after its days on the track are over, so while a Derby winner becomes part of racing history, the win does not necessarily have a large impact on its future earning potential.

There are obviously tangible financial benefits to winning the Derby. This year’s winner stands to earn $1.24 million – not bad for two minutes’ work*. For some Derby winners, such as 2005’s Giacomo, the victory purse makes up a huge portion of lifetime earnings.

[*The 2013 Kentucky Derby winner was Orb, the favourite, at 5-1. The second horse past the line was outsider Golden Soul at 34-1 and in third place was Revolutionary at 6-1]

Double click on each photo to enlarge

Winning the Derby also confers instant name recognition on a horse, which can mean another payday for the horse’s owner, said Dan Metzger, president of the Thoroughbred Owners and Breeders Association, a trade organization. “You can expect horses with decent value to double, triple or quadruple in value – stud value – after winning the Derby,” he told The Financialist. If a horse enters the Derby valued at $1 million to $2 million, a win could boost its value as high as $10 million, he said.

Value, in this case, means how much the horse is expected to earn in the first three to four years as a breeding stud. Breeders have selected this window because it allows them to see what kind of racing offspring a stud creates. If the foals are a bust, word spreads.

“After those first three to four years, a lot of horses don’t make it,” says Metzger. “(The sire’s) stud fees are cut in half. And the winners of the Kentucky Derby are not among the top (breeding) stallions in the world.”

Not to pick on poor Giacomo, but he won the Derby as a 50-to-1 long shot and has not sired enough high-profile winners to fetch much as a stud. He only earns $5,000 for siring a live foal. One top Derby-winning stud, Street Sense, earns $53,500 for a foal that stands and nurses. Even this isn’t much in the racing world. Top breeding stallions like Bernardini can earn $150,000 for a foal that stands and nurses.

Why doesn’t the Derby translate into higher breeding value? Partly because it’s an oddball race, says Lenny Shulman, features editor at The Blood Horse.

“There are 20 horses in the race and a lot of traffic, bumping and bad horse positioning,” he says. “The best horse is not always the winner.”

Plus, at 1.25 miles, the Derby is simply longer than most races, meaning that the victors don’t always have the qualities breeders seek.

“Horses that are fast at a mile, 7/8 of a mile, are more sought (after),” Shulman said.

A highly valued sire must possess a cocktail of attributes, said John Hamilton, who works in bloodstock services at Three Chimneys Farm, in Midway, Ky. “You’re looking for a horse that is big, powerful, good-looking and well-bred,” he says. He points to 2000 Derby winner Fusaichi Pegasus as a horse that combined all those attributes. Fusaichi Pegasus set a record when he sold for a reported $70 million not long after winning the Derby.

Hamilton says a Derby win is best understood as a sort of “cherry on top” for a valued horse. Winning multiple legs of the Triple Crown can impress breeders even if a horse’s pedigree is ordinary, as was the case with 1997 Derby and Preakness Stakes winner Silver Charm.

“He damn near won the Triple Crown!” Hamilton explained. “He got five times what he would’ve gotten by winning the Kentucky Derby and not much else.” But on the other hand, a horse that has an impressive pedigree but wins only the Derby still has the potential to fetch big bucks in the breeding shed.

In the end, Hamilton says, stud values are not an exact science. The price depends on whether a stallion impresses the 2,500 wealthy owners of top thoroughbred mares.

“They want to know, will the foal be good-looking? They want to know if the stallion has done anything, what is its pedigree, and the price,” Hamilton says. “And if it all jives, they’ll proceed. It’s like applying to Dartmouth.”

And even if Derby winners have a spotty record as studs, the couple of minutes it takes to win the race remains an unbeatable thrill for owners.

“If you ask anybody that’s won a big race, they will say nothing else in their personal lives gave them the same thrill, including the birth of a child,” he said. “They’re buying those goose bumps, or the chance for them.”

Find out what some recent Kentucky Derby winners are worth as studs, according to bloodhorse.com’s online stallion register, in the slideshow below. Prices are given in the local currency where the horse is stabled.

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