05/01/2013 5:05PM

Kentucky Derby effect: Winning sire gets big-money yearlings

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Barbara D. Livingston
Flower Alley, the sire of 2012 Kentucky Derby and Preakness winner I’ll Have Another, saw his yearlings almost triple in value from 2011 to 2012.

Winning the Kentucky Derby is good for business.

While the benefits to those most closely associated with the horse are obvious, the residual effects of a Kentucky Derby win have proven to be more far-reaching, even affecting prices in the yearling market in the months following the classic race.

Over the past 20 years, the average price for yearlings by the sire of the most recent Kentucky Derby winner has increased 34 percent, rising from $119,018 the year before the Derby win to $160,061 during the sale season immediately following it. The median price for newly crowned Derby-winning sires jumped 16 percent from $88,751 to $103,222.

Bulk figures show that breeders are more willing to put yearlings by those sires through the auction ring, with an average of 22 percent more horses sold for revenue that improved an impressive average of 65 percent.

Perhaps most important for sellers, the one universal truth during the past two decades was a willingness from buyers to bid higher for the sire’s best offerings. The highest price paid for a yearling by the most recent sire of a Derby winner improved over that sire’s previous crop in each of the past 20 years, often drastically, by an average of 73 percent.

“It’s all about ‘What have you done for me lately?’ and that’s the way the sales go,” said Pat Costello of consignor Paramount Sales. “It’s amazing. Some horses can be really hot in the spring of the year, and by September, they can cool again, or vice versa.”

The increase in buyer interest and dollars has been most dramatically felt among the younger, less established sires, whose Derby winners came in their first or second crops.

Flower Alley, the sire of last year’s Kentucky Derby winner, I’ll Have Another, from his second crop, is a prime example. The Distorted Humor horse was lightly regarded in 2011, and his yearling sales were equally modest, with 18 of his yearlings selling for an average of $14,437.

A year later, with a dual classic winner on his résumé, the number of yearlings sold by Flower Alley nearly doubled to 35, for an average price of $40,314. Perhaps most impressively, the highest price paid for a Flower Alley yearling increased 600 percent in 2012, from $30,000 to $210,000.

While Flower Alley’s rise in popularity among buyers was dramatic, it paled in comparison with the Derby sire of a year earlier, Leroidesanimaux.

The Florida-based sire of 2011 Derby winner Animal Kingdom, also from his second crop, sold seven yearlings during the 2010 auction season for a total of $48,174 and an average price of $6,882. The most expensive Leroidesanimaux yearling of the season cost $22,000.

After Animal Kingdom’s win, the sire had 21 horses sell, up 200 percent, for a total of $783,160, an improvement of 1,526 percent. While the gross figures would naturally improve with additional horses sold, the averages were just as astounding, with the average price rising 442 percent to $37,293 and the median improving 1,000 percent to $22,000, the same price that the top Leroidesanimaux yearling sold for the previous year. In 2011, his highest-priced yearling sold for $250,000.

On the opposite end of the spectrum, horses with several foal crops and established reputations were far less volatile in their yearling prices following their Derby wins. In fact, the two sires with the most foal crops at the time of their Kentucky Derby wins over the past two decades, Mr. Prospector with Fusaichi Pegasus (2000) and Cormorant with Go for Gin (1994), actually saw slight decreases in their average and median sale prices immediately following their wins.

“When Fusaichi Pegasus won it, it was just another feather in Mr. Prospector’s cap,” said Mark Taylor of Taylor Made Sales Agency. “It wasn’t really going to change the dynamic too much, but when you look at a horse like Distorted Humor, when Funny Cide won it, that was a major boost for him. When Smarty Jones won it for Elusive Quality, he was a horse that started out at a modest fee and was still very early in his career, so it put them on a big stage, like those horses could be the real deal.”

When Costello has horses in his upcoming yearling consignment by the same sire as the Kentucky Derby winner, he said the first thing he does is reconsider where he wants to place them in the sale books, now that they have a new marketing point.

“If it was previously a not-so-popular sire that turns red-hot, you’d obviously be moving it up,” he said. “You’d be going on the individual, and you want to make sure it’s in the right book, but your plan would be to move it up a book or two. You’re obviously going to be more excited about it.”

However, Costello stressed that conformation is the most important factor when selling a yearling, regardless of its pedigree or catalog updates.

“It’s all about the horse’s physical,” he said. “If they’re not a great physical, they’re going to be tough to sell, no matter what they’re by. But if they’re a really good physical, we definitely try to highlight them being by the Kentucky Derby sire.”

Taylor agreed that bad conformation can sink a yearling by a Derby-winning sire in spite of the big update, but selling a foal in utero does not come with those concerns.

“When you’re selling a mare that’s carrying a baby, you’re selling more ‘blue sky’ than you are conformation,” he said, “so I think it’s more interesting to have a big update like that when you’re selling a mare that’s carrying a baby by that stallion than when you’re selling a direct offspring.”

Derby year Stallion Winner Foal crop
of winner
Yearlings sold
pre-Derby
Yearlings sold
post-Derby
Change Average price
pre-Derby
Average price
post-Derby
Change Median price
pre-Derby
Median price
post-Derby
Change Highest price
pre-Derby
Highest price
post-Derby
Change
2012 Flower Alley I'll Have Another 2 18 35 94% $14,437 $40,314 179% $12,000 $25,000 108% $30,000 $210,000 600%
2011 Leroidesanimaux Animal Kingdom 2 7 21 200% $6,882 $37,293 442% $2,000 $22,000 1000% $22,000 $250,000 1036%
2010 Maria's Mon* Super Saver 10 39 N/A N/A $82,677 N/A N/A $40,000 N/A N/A $500,000 N/A N/A
2009 Birdstone Mine That Bird 1 8 26 225% $27,770 $56,788 104% $16,500 $20,000 21% $105,000 $400,000 281%
2008 Boundary* Big Brown 10 1 N/A N/A $15,000 N/A N/A $15,000 N/A N/A $15,000 N/A N/A
2007 Street Cry Street Sense 1 68 57 -16% $101,580 $127,556 26% $66,322 $67,000 1% $725,000 $750,000 3%
2006 Dynaformer Barbaro 13 34 25 -26% $185,663 $284,640 53% $162,500 $235,000 45% $900,000 $1,050,000 17%
2005 Holy Bull Giacomo 7 23 51 122% $41,922 $49,526 18% $25,000 $30,000 20% $160,000 $450,000 181%
2004 Elusive Quality Smarty Jones 2 18 47 161% $52,944 $170,234 222% $38,500 $75,000 95% $160,000 $950,000 494%
2003 Distorted Humor Funny Cide 1 27 38 41% $37,730 $103,684 175% $32,000 $45,000 41% $135,000 $675,000 400%
2002 Our Emblem War Emblem 2 31 26 -16% $9,116 $28,631 214% $5,200 $12,750 145% $37,000 $210,000 468%
2001 Maria's Mon Monarchos 1 40 35 -13% $50,094 $87,043 74% $21,000 $37,000 76% $325,000 $575,000 77%
2000 Mr. Prospector Fusaichi Pegasus 22 11 15 36% $1,302,360 $1,257,000 -3% $1,000,000 $790,000 -21% $3,000,000 $4,400,000 47%
1999 Summer Squall Charismatic 4 25 16 -36% $121,320 $125,688 4% $60,000 $52,500 -13% $835,000 $1,000,000 20%
1998 Quiet American Real Quiet 3 18 24 33% $30,779 $95,420 210% $22,250 $83,500 275% $100,000 $275,000 175%
1997 Silver Buck Silver Charm 11 12 16 33% $6,809 $30,275 345% $5,754 $23,000 300% $15,000 $125,000 733%
1996 Unbridled Grindstone 1 24 23 -4% $116,458 $159,000 37% $97,500 $160,000 64% $300,000 $330,000 10%
1995 Gulch Thunder Gulch 3 19 23 21% $115,632 $162,604 41% $95,000 $125,000 32% $390,000 $475,000 22%
1994 Cormorant Go for Gin 13 5 8 60% $33,620 $26,563 -21% $32,000 $20,250 -37% $60,000 $65,000 8%
1993 Polish Navy Sea Hero 2 22 23 5% $27,563 $38,841 41% $26,500 $35,000 32% $70,000 $110,000 57%
  Average 5.55 23 28 22% $119,018 $160,061 34% $88,751 $103,222 16% $394,200 $683,333 73%

*Final crop of yearlings sold before Derby win.