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Beyer: California Chrome's stud value has ceiling
By Andrew Beyer
Before the Kentucky Derby, the owners of California Chrome turned down an offer to sell 51 percent of their colt for $6 million. The offer pegged his value at about $12 million. After California Chrome proceeded to win the Kentucky Derby and the Preakness, trainer Art Sherman declared: “Now the horse is worth $30 million.” The owners surely expect that his value as a prospective stallion will soar further if he wins the Belmont Stakes and completes a sweep of the Triple Crown.
The reality is likely to surprise owners Steve Coburn and Perry Martin, as well as most casual fans of the sport. In Thoroughbred racing, the big money is made when star racehorses become stallions; their sales price typically dwarf their earnings on the track. Fusaichi Pegasus won $2 million in competition and was syndicated for $60 million when he retired. But California Chrome will not generate such a windfall return. No matter what he achieves on the track, the breeding industry will view him warily. “He’s going to be a tough sell,” predicted Kentucky-based bloodstock agent Tom Clark.
One of the principles in the breeding business is that horses are not judged solely on their merit as runners, but also on the basis of their family trees. It may sound un-American, but if a superior racehorse possesses an inferior pedigree, that pedigree will always be a drag on his value.
People who buy and breed Thoroughbreds covet genes that have proved themselves generation after generation. They are skeptical of a successful runner who may be an outlier. At the very least, a good sire prospect needs to be the son of a high-class stallion, and he ought to come from a female line that includes good blood and some stakes winners.
Coburn has said that California Chrome “has low-cost breeding but the pedigree is there,” pointing to the presence of Secretariat, Seattle Slew, and Northern Dancer four or five generations back. But almost every Thoroughbred has some distinguished distant ancestors. Sophisticated pedigree students do like the fact that the great, influential mare Numbered Account appears twice in the family tree.
Nevertheless, California Chrome’s pedigree may be the weakest possessed by the winner of any Triple Crown event since 1986. His sire, Lucky Pulpit, though well bred, never won a race of consequence in 22 career starts and stood for a $2,500 stud fee. His dam raced for an $8,000 price tag, and the dam’s dam was just as cheap. (The experts do say that the pedigree would look a lot better if Lucky Pulpit sired one or two more Grade 1 stakes winner, proving that his son is not a genetic fluke.)
His humble origins did not prevent California Chrome from developing into an outstanding racehorse. Horses can and do surmount weak pedigrees and become champions. Snow Chief was the son of a stallion with a $2,000 stud fee and a dam who earned $2,308 racing in Mexico, but he was a brilliant racehorse who won the 1986 Preakness and 3-year-old championship. Still, he was little regarded when he went to stud, and in his career he sired only one offspring who won as much as a Grade 2 stakes. That’s what history tells breeders to expect. Ill-bred racehorses don’t become high-level stallions.
Even success is America’s most important races won’t necessarily sway the opinion of breeders. They are not mesmerized by horses who excel in the Triple Crown series. “Winning the Kentucky Derby is no guarantee of stud success,” said pedigree expert Bill Oppenheim. “Almost the reverse, in fact.” Big Brown and Smarty Jones have been recent flops at stud, even though they both won the first two legs of the Triple Crown. The latter started his career in Kentucky with a $100,000 stud fee and now stands in Pennsylvania for $7,500.
The benchmark for determining a horse’s value is his fee when he first goes to stud. When a horse is retired and either syndicated or sold to a single buyer, the industry’s rule of thumb is that his value is 300 to 400 times the initial stud fee. Thus, to be worth the $30 million figure cited by his trainer (and widely quoted in the media), California Chrome would have to command a fee of $75,000 to $100,000. Will he?
The history of I’ll Have Another might shed some light on his prospects. I’ll Have Another won the Derby and Preakness in 2012 and looked as talented as California Chrome does now. He had an excellent chance of sweeping the Triple Crown until an injury forced his retirement one day before the Belmont Stakes. His pedigree was quite respectable. His sire, Flower Alley, had won the Travers Stakes, though he was an unfashionable stallion in the U.S. When Jamie McCalmont, bloodstock adviser to owner Paul Reddam, surveyed the domestic interest in I’ll Have Another, he received chilly responses. “He would have been able to stand for $15,000, and if he had won the Belmont it might have been $20,000,” McCalmont said.
Reddam wound up selling his horse for $10 million to a farm in Japan, where his stud fee is about $35,000.
So what is California Chrome worth? Oppenheim thought he might be worth as much as $10 million now and that the value would go up with a Belmont victory. He said, “The absolute maximum he could stand for is $50,000.” Clark said, “I don’t think he can stand for $50,000 whatever he does. I can’t imagine [a stud fee] less than $30,000. He’s a potential $10 million horse.”
This modest valuation may disappoint his owners but it could be good news for the sport. The best colts are frequently retired as 3-year-olds so that they can cash in on their stud value, depriving Thoroughbred racing of the stars it so badly needs. California Chrome has another option. If he is as good as his owners believe, his total purse earnings could soar well past $10 million by March if he captures the Breeders’ Cup Classic (worth $2.75 million to the winner) and the Dubai World Cup ($6 million). Even though the breeding industry will always be skeptical of him, California Chrome can be a very valuable horse by continuing to do what he does best: run.
© 2014 The Washington Post
California Chrome has been ranked #4 in the World. Read it in Bloodhorse...
Wow. You said he was "tired" at the end of the Derby, when it was obvious to anyone who has seen a few horse races that Victor was gearing him down. Then, he put away all challengers, after moving early and posted a nice fast time for the Preakness. And still, you cannot be positive about this horse. California Chrome proves that the "experts" who sent Sunday Silence to Japan, and sold a bunch of wealthy chumps some 6 and 7 figure horses, are not always right. Are they, Andrew? Don't bother trying to jump on the bandwagon a few years from now - we will remember how you disparaged Chrome and his connections.
Ah, bah!~~ The owners should keep CC and breed him themselves. Betcha they would get some really good stock from CC. The owners proved the corporate breeders wrong when CC won the Derby. They did it again when he won the Preakness. They will do it again today. Maybe they should go into the breeding business with CC and prove the Kentucky corporate breeders wrong again. Just sounds like sour grapes out of Kentucky. They just can't come to grips with regular working stiffs winning their triple crown. ....and they did it their way. Go CC! Win one for us common folk!
Zenyatta would sleep with CC for free and so would Madona
Yes, it's not quite like it was in the old days (not that long ago really) when blueblooded stallions could win one Gr I and be carted off to stud for cartloads of cash. But there is some truth to the fact that good horses make pedigrees fashionable. California Chrome is a very good thoroughbred - I like him better than I'll Have Another by sizeable margin. Why not stand the horse in California? I know the mares aren't there like Ky. but who cares.
Good article, Andy. I've been telling people all week that "if" Cal. Chrome does manage to win the Belmont, it'll be by a neck, but his most likely finish is 3rd. My pick that'll beat him is "the other CC".
Beyer this colt is for real & you cannot handle it !!!!
CC is inbred to Me. Prospecter & Numbered Account the fabulous filly. I believe he has the big heart big lungs gene & will pass it to his colts & fillies
Here is a list of CALIFORNIA CHROME's sire line just as an example of how silly some of these arguments are.i will try not to go back to 1764 and ECLIPSE. 2001....LUCKY PULPIT.......young sire from limited opportunity's produced C.C . derby and preakness winner. 1994....PULPIT......great sire good racehorse. 1989....AP INDY...great sire ..great racehorse. 1974....SEATTLE SLEW....great sire.great racehorse. 1968....BOLD REASONING...good racehorse..died after only two seasons at stud yet produced a triple crown winner. 1963....BOLDNESIAN...won santa anita deby..good sire. 1954....BOLD RULER....great racehorse.champion sire . 1940....NASRULLHA......champion 2yo uk.champion sire. 1935....NEARCO.......champion racehorse..champion sire. 1920....PHAROS......great racehorse.champion sire. 1913....PHALARIS....great racehorse.champion sire. 1902....POLYMELUS...most influential sire of his era.good racehorse. 1895....CYLLENE...great racehorse..champion sire uk and argentina. 1889....BONA VISTA....5 x leading sire in hungary. 1877.....BEND OR.....great racehorse .great sire. 1870....DONCASTER...champion race horse. champion sire.. and so on and on to ECLIPSE. if this horse can not be a great sire i dont know who can.
Mikey, Ok. But not as simple as you make it sound. Look at the top 2014 Stud Fees, the top fees are mostly for Classic distance types, not sprinters (Street Cry, Bernardini, Medaglio D' Oro, Malibu Moon, Kittens Joy (all $100,000+), Tiznow (75K) and Giants Causeway (85K)). The top sires that command the top stud fees not only inject speed, but give promise of a classic distance horse. A glance at the top sires list actually supports Beyer's point, and negates your point. Tapit and Speightstown are top sires that don't scream a mile and a quarter, but their pedigrees are laced with quality, proven horses. So, again, this supports Beyer's point as to the valuation of CC.
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