The Kentucky Derby’s Billion-Dollar Secret
The Kentucky Derby’s Billion-Dollar SecretFrom six-figure stud fees to global breeding syndicates, today’s newsletter explains how Kentucky Derby winners become cash machines long after the race ends.
The 151st running of the Kentucky Derby takes place this Saturday. The race will only last two minutes, but more than 150,000 people will pack Churchill Downs in Louisville, Kentucky, to see twenty of the world’s fastest three-year-old horses race. These thoroughbreds will reach top speeds of nearly 40 mph during the two-minute, 1.25-mile race. Fans in attendance will consume 120,000 Mint Juleps, generating more than $2.6 million in sales. And while many jockeys starve themselves to ensure they meet the 126-pound weight limit (including seven pounds of gear) that a horse can carry, the payoff is worth it, with the winner taking home $3.1 million in prize money. That’s just the headline number, though. The more interesting part is what happens after the race. The Kentucky Derby-winning horse’s value immediately soars due to its breeding rights. Farms begin to develop financial models to determine how much they should pay for the horse, and some places even take it a step further, moving horses between the Northern and Southern Hemispheres to maximize their breeding rights. Some of these farms are worth hundreds of millions of dollars. There are syndicates full of 50+ people trying to divvy up a horse’s future earnings, and everything from mortality insurance to infertility is considered by the sport’s most savvy investors… Subscribe to Huddle Up to unlock the rest.Become a paying subscriber of Huddle Up to get access to this post and other subscriber-only content. A subscription gets you:
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