Thursday, May 2, 2013
The cost of owning a Kentucky Derby horse
By Kristi Dosh
The odds of owning a horse who races in the Kentucky Derby are pretty slim. All Derby horses are 3-year-olds, meaning each horse has just one chance in its lifetime to race the Kentucky Derby. According to the Churchill Downs communications department, approximately 26,000 thoroughbreds were foaled in the United States in 2010. Just 1.4 percent (369) of those horses were nominated to the Triple Crown, and only 20 will race on Saturday in the 139th Kentucky Derby.
If those odds don’t scare you off, and you still think it might be fun to attempt to raise a Derby contender, consider the cost.
First, you’ll have to purchase a horse at auction or breed. At an auction, be prepared to spend anywhere from the low six figures to the low seven figures. Fusaichi Pegasus, the 2000 winner of the Kentucky Derby, was the most expensive winner ever purchased at $4 million as a then-yearling.
If you want to go the breeding route instead, you’ll need to purchase a good mare. Horse owner Nelson Clemmens said the cost can range from $50,000 to $400,000 or more.
The owner will then have to pay a stud fee, which ranges from $10,000 to $150,000, a price that is largely dependent on the perceived strength of a stallion’s blood line and the accomplishments of other horses he’s sired. For example, after Big Brown won the Kentucky Derby and Preakness in 2008, his stud fee was announced at $65,000. Flower Alley, who sired last year’s Kentucky Derby winner, I’ll Have Another, has a stud fee of $20,000 this year.
Once you have a horse, and it’s weaned around 5 months old, you’ll incur approximately $1,500 per month to develop the horse. That cost will increase up to $2,500 to $3,000 per month as the horse matures.
The cost to train a horse, including transportation, entry fees and other costs, will escalate to approximately $150,000 per month once it’s running at a high level. Clemmens says there are also some additional administrative costs associated with preparing a horse for the Kentucky Derby.
According to the Kentucky Derby Museum, the nomination fee an owner pays to make a horse eligible for the Kentucky Derby is $600 per horse -- if you register during the “early period,” which runs through late January. After that, the fee goes up to $6,000 through late March. Last-minute entries will pay a supplemental fee of $200,000.
The entry fee for the Kentucky Derby is another $25,000. Another $25,000 is paid if the horse enters the starting gate. By now, the owner has also paid entry fees at a number of other races through the winter and spring as the trainers prepare the horses in “prep” races.
The purse for the Kentucky Derby is guaranteed at $2,000,000, with the winner receiving at least $1,240,000. The Kentucky Derby Museum estimates the value of the gold Derby Trophy presented to the winner at $95,000. It is the only gold trophy presented to a winner in major American sports.
Sixty percent of a purse will go to the horse’s owner, Clemmens says. Ten percent more will go to the trainer, and 10 percent to the jockey. The remaining 20 percent will go to pay grooms’ bonuses and other track expenses.
The owners aren’t the only ones forking over money for the Derby, however. Last year, a record $187 million was wagered on the Kentucky Derby Day, including a record $133.1 million on the Kentucky Derby alone. Eighty-two percent of the money wagered ($153.3 million) was paid out to customers with winning tickets in 2012.
Saturday, more than 165,000 fans are expected at Churchill Downs to watch the “fastest two minutes in sports.” Last year, a record 165,307 packed in to watch the races.
Shannon Barbara of StubHub said by email: “Demand for the 2013 Derby is up in comparison to previous years, and we will likely see it surpass both 2011 and 2012 on all fronts.”
Currently, the median price on StubHub for a ticket is $325 and the get-in price is $50. The most expensive seat currently offered on the site is $10,001 for Turf Terrace.
StubHub says tickets have been purchased by people in 47 of the 50 states and four Canadian provinces. Tickets have been purchased by buyers from as far away as Buenos Aires, Australia and London.
Unlimited standing-room-only tickets are available at Churchill Downs on race day for $50. They can be purchased online in advance for $40.
At the end of the day, it’s Churchill Downs who comes out in the lead. The purse for the winning horse likely won’t cover the expense or raising and training him, although other winnings and future stud fees may. In the meantime, Churchill Downs brings in revenue from over sponsors and over 165,000 people buying tickets and consuming 7,800 liters of bourbon, 142,000 hot dogs and the rest of the standard Derby fare.