Bill Oppenheim: Good Gamble

When Coolmore did the deal to buy the breeding rights to American Pharoah in January, before the Eclipse Awards, they were just hoping they were buying their fifth champion 2-year-old colt in six years to stand at their Kentucky arm, Ashford Stud. They couldn't have bought the sixth anyway; that was the gelding Shared Belief, in 2013. But they stand 2009 champion Lookin At Lucky; 2010 champion Uncle Mo; they stood 2011 champion Hansen for a year before he was sold to South Korea; and they stand 2012 champion Shanghai Bobby. Buying American Pharoah–and taking the gamble he would win the Eclipse Award ahead of GI Breeders' Cup Juvenile winner Texas Red–was consistent with the operation's policy for the previous five years.

A figure of $8 million has been quoted as the base valuation of the deal; if that figure is accurate, it was plenty to pay for a 2-year-old champion, since, if nothing went right, a horse with that profile would go to stud in the $25,000 range. Of course, there were contingencies, but if you start at $8 million any cap on contingencies is unlikely to be in the stratosphere.

American Pharoah was a gamble that's paying off for the Coolmore 'Lads'–Messrs. Michael Tabor, Derrick Smith, and John Magnier. Not all those stallion gambles pay off after they write those big checks: think Fusaichi Pegasus. There is a lot of speculation in the financial papers about what American Pharoah is worth now, and that attention is good for our business. Most estimates of a horse's value entering stud are multiples of the real or imagined stud fee. In the old days we would use 150x or at most 200x predicted or actual entering stud fee, but these days 300x estimated entering stud fee is a reasonably conservative estimate of the prospective sire's earning power before the results are in, and his value goes one way or the other.

Estimates I've seen of American Pharoah's entering stud fee as of now range from $75,000 to $250,000. Two points must be kept in mind about any estimate: first, if things go according to plan he's not through racing; second, he is the first Triple Crown winner in 37 years and only the fourth in the 67 years since 1948. For that reason alone he's not going to be standing for a fee on the lower end of that estimated scale. The traditional top entering stud fee for years was $150,000. Only a handful of horses, literally, have entered stud at a higher fee in the last 30 years. The last two superstar racehorses to go to stud are Sea The Stars in 2010, when the market was at its lowest point in 30 years, and Frankel in 2013. Sea The Stars retired for a depressed figure of €85,000, which at the time was worth about $120,000; now being a successful third-crop sire, his fee went up to €125,000 this year, but after a 25% drop in the Euro, that's still 'only' about $140,000. Frankel retired for £125,000, which at the time was close enough to US$200,000. Speculation on social media yesterday was pegging American Pharoah's fee at $175,000 or more, which really would make him a $50-million horse.

With regard to his future racing, breeders of course want to see how this current 3-year-old star stacks up against older horses, which looks like a strong, deep group, as future Lane's End stallion Honor Code (A.P. Indy) demonstrated by his impressive win (Beyer 112) over last year's GI Belmont S. winner Tonalist (Tapit) in the GI Metropolitan Mile, one of six Grade I races on a fantastic Saturday card put together by NYRA Director of Racing Martin Panza. One of the great assets American Pharoah demonstrated during the Triple Crown campaign was toughness–obvious, I guess, since he's the first horse in 37 years to win those three races in a five-week period–so we can look forward to seeing the question of how he stacks up against his elders addressed.

From the cold-blooded handicapping viewpoint, it looks like American Pharoah will have to continue improving to beat the best older horses. His three Classic-winning Beyer numbers were 105-102-105. The Belmont 105 is good for that race, but the other two numbers are just okay. Of the three Triple Crown winners in the 1970's, two of them really proved they were great racehorses, period, as well as Triple Crown winners, during the Triple Crown series: Secretariat won the Belmont by half a 'pole' (a pole is a sixteenth of a mile), and Affirmed beat Alydar three times. By contrast, Seattle Slew beat up on a lot of nobodies, as it turned out, and didn't establish his greatness beyond being a Triple Crown winner until he was a 4-year-old. We don't know yet how good the 3-year-olds American Pharoah has dominated will eventually turn out to be, but we do know horses like Honor Code, Tonalist, and California Chrome (once he is repatriated) are really good.

Handicapping guru Andy Beyer put it to me this way in an email:

“Great horses run fast, and if American Pharoah is to be considered among the all-time greats, he needs to do the same. He hasn't done it yet. His Beyer Speed Figures in the Triple Crown series were 105, 102 and 105–and he earned those figures with the aid of perfect trips in the Kentucky Derby and Preakness. His performances are slower than 3-year-olds of the last decade such as Afleet Alex, Street Sense, Curlin and Bernardini, and not remotely close to the best efforts of the Triple Crown winners of the 1970s.”

So that's the challenge, and after all this time it's great for racing to have this opportunity, to see a Triple Crown winner take on an older generation of genuinely good older horses. If they all stay sound, touch wood, we could be in for some epic racing this fall.

You can imagine the impact of A.P.'s win in the sire charts. His sire, WinStar's Pioneerof The Nile (what will he stand for next year? $100,000+ is a certainty), leaps into third place on the TDN Year-to-Date General Sire List (click here), and is now miles clear of Coolmore's Mastercraftsman on the TDN Year-to-Date Third-Crop Sire List (click here). Australian Champion Sire Fastnet Rock, who is a third-crop sire up North and another Coolmore sire, solidified his hold on third with the 50-1 win by Qualify in last Friday's G1 Epsom Oaks. WinStar's Colonel John, whose Cocked And Loaded won the Tremont S., for 2-year-olds, last Friday, is fourth on the Year-to-Date Third-Crop list, followed by Gilltown Stud's Sea The Stars, who leads third-crop sires this year by number of Black-Type Winners (six), number of Black-Type Horses (11), and number of Group Stakes Horses (six). On the cumulative third-crop list (click here), Pioneerof The Nile has now overtaken Mastercraftsman, who is second; Sea The Stars is third; and Fastnet Rock is fourth. The leading French third-crop sire, Haras de la Cauviniere's Le Havre, is fifth on the cumulative third-crop list, followed by Colonel John.

Mention of the Tremont reminds us that 2-year-old racing is now getting underway in earnest on both sides of the pond, and a peek at the TDN 2015 Year-to-Date 2-Year-Old Sire List (click here) as we start to see more 2-year-old Black-Type races is interesting. There has been a lot more 2-year-old racing in Europe; among the top 20 by progeny earnings, eight European sires have six or more 2-year-old winners already, headed by Tally Ho Stud's Dark Angel, who leads the list by both progeny earnings and number of winners (12). His sire, Rathbarry Stud's Acclamation (#6 by 2015 2-year-old progeny earnings) has sired seven 2-year-old winners, and his sire, the Royal Studs' Royal Applause (#14 by earnings), has eight. Another son of Acclamation, Newsells Park Stud's Equiano (#12 by earnings), has six. Tally-Ho, which stands Dark Angel, also stands Kodiac (#7 by earnings), who has 11 winners from an amazing 59 2-year-old runners already (that is precocity), and Zebedee (#16 by earnings), who was leading NA/EU freshman sire by number of winners last year (32), and has eight 2-year-old winners already this year. Current fs21softlineleading European freshman sire, Coolmore's Zoffany, has six winners, including BTW Argentero and BTP Washington DC. Among North American sires (click here), Colonel John yesterday had a $300 lead over Darley's Street Boss, followed by another from Darley,Medaglia d'Oro, sire of last week's Astoria S. winner Moment Is Right. California's Vessels Farm's Square Eddie ranks fourth among North American sires of 2-year–olds this year, with Ashford's Uncle Mo, current leading North American freshman sire, rounding out the top five.