05/04/2013 7:10AM

Kentucky Derby effect: Winning sires see stud fees spike

Photos by Z
Birdstone’s stud fee went from $10,000 to $30,000 after Mine That Bird and Summer Bird earned victories in two 2009 classics.

The Kentucky Derby carries a purse of $2 million, but America’s most famous race can pay further dividends for the connections of the winner’s sire.

The stallions represented by Kentucky Derby winners – particularly those early in their stud careers – typically see significant fee increases the following season and can also garner larger books filled with higher-quality mares.

“The American classics are the key races,” said Michael Hernon, director of sales at Gainesway in Lexington, Ky. “They can really propel a [stallion] forward and result in appreciation for the horse himself.”

Gainesway stands 2004 Belmont Stakes winner Birdstone, who produced 2009 Kentucky Derby winner Mine That Bird, along with Belmont winner Summer Bird, from his first crop to race. The son of Grindstone, who began the 2009 season standing for $10,000, saw his fee climb to $30,000 the following year as a result.

Birdstone belongs to a group of young sires who have dominated the Derby in recent years. In the 20 most recent editions of the Kentucky Derby held prior to 2013, the winner emerged from his sire’s first or second crop 10 times. Producing an early classic winner proved to be a valuable accomplishment for young stallions establishing themselves in the market.

The average fee increase for a stallion who produced a Derby winner from his first or second crop and returned to stand for a public fee in North America the following season was 225 percent over the past two decades, compared with 31 percent for an older sire whose classic winner came from this third crop or later.

The biggest jump over that time span was seen by Our Emblem, who was standing for $4,000 at Murmur Farm in Darlington, Md., when his son War Emblem, from his second crop, won the 2002 Kentucky Derby and Preakness Stakes. Our Emblem promptly moved to Kentucky, where he stood at Taylor Made Farm in Nicholasville for a fee of $35,000 in 2003 – a 775 percent increase.

Leroidesanimaux produced 2011 Kentucky Derby winner and Eclipse Award-winning 3-year-old male Animal Kingdom from his second crop, pushing his fee from $10,000 to $22,500 in 2012. His fee has since climbed to $25,000 for this season as Animal Kingdom has found additional success, finishing second in last fall’s Breeders’ Cup Mile and winning the Dubai World Cup in March.

“The support of all the breeders and the industry has been phenomenal,” said Marc Haisfield, who stands Leroidesanimaux at his Hallmarc Stallions at Stonewall Farm in Ocala, Fla. “He has some big crops coming.”

The most recent young sire to see significant success on the Triple Crown trail was Flower Alley, who stands at Three Chimneys Farm in Midway, Ky. The stallion produced two Kentucky Oaks starters – including Grade 1 winner Lilacs and Lace – from his first crop, then followed up with dual classic winner and champion I’ll Have Another in his second crop.

Flower Alley’s fee jumped from $7,500 in 2012 to $20,000 this season, the biggest increase for any returning stallion in the United States this year.

“Any time you have a $7,500 stallion who gets a Grade 1 winner in each of his first two crops, that’s obviously going to make more of a difference in the horse’s fee,” said Kyle Wilson, who handles stallion-season sales at Three Chimneys.

The fee increase for a younger sire can be more dramatic than one for an accomplished older stallion who achieves classic success. Three Chimneys also stood the late Dynaformer, whose fee rose from $100,000 to $150,000 in 2007, the year after Barbaro captured the Kentucky Derby. Although the dollar amount of his increase was higher than Flower Alley’s six years later, the percentage change was lower since his fee was already six figures.

“You can only go so high,” Wilson said.

Of the established stallions of the past two decades who produced a Kentucky Derby winner from their third crop or later, two saw no fee change at all – Holy Bull, whose fee remained at $15,000 after Giacomo won the 2005 Kentucky Derby, and Summer Squall, who produced 1999 dual classic winner Charismatic and stood for an unchanged fee of $25,000 the following season.

While early success can boost the value of a stallion, he still must continue to produce top-quality runners to remain at that level.

“The market is very much ‘What have you done for me lately?’ ” Hernon said, noting that Birdstone’s fee has gone back to $10,000 for 2013. From his first six crops, the stallion has produced three other U.S. graded stakes winners in addition to the two classic winners from his first crop.

“I think there has to be a continuance of the performance of the product,” Hernon added. “Birdstone had that very good start, then he was a little quiet for a couple of years. We had to back up on the fee in light of the market. It’s important to price your horse fairly in correlation with the market. You don’t want to miss the target. Otherwise, you’ll struggle to sell seasons. There’s a lot of choice out there, and we try to price our horses fairly.”

Perhaps helping a stallion build on initial success, book sizes tend to increase for classic-producing sires, with the quality of mares being bred to an individual also improving.

“We went from 75 mares in [Flower Alley’s] book on Oaks Day to [132] by the time the season was over,” Wilson said. “Obviously, the Derby and Preakness had a huge impact; we nearly doubled his book. We had a little bit of a response after the Santa Anita Derby, but the Sunday morning after the Kentucky Derby, someone called me up wanting to breed five mares to him.”

This season, Wilson said, Flower Alley’s book will be kept to “around 100,” with a focus on quality.

“The quality [of the mares] has gone way up,” he said. “We’re making sure we protect the horse with good mares.”

Haisfield likewise expressed big hopes for Leroidesanimaux’s future, saying the stallion’s crop of foals to arrive in 2014 will be his largest yet.
“There are very few sires that have had the chance to sire more than one Kentucky Derby winner,” Haisfield said. “We’re very excited about the future of Leroidesanimaux.”

Derby sires' stud fees

Derby year  Winner Sire Crop Fee year of Derby win Fee year following Derby win Percent change
2012 I'll Have Another Flower Alley 2 $7,500 $20,000 167%
2011 Animal Kingdom Leroidesanimaux 2 $10,000 $22,500 125%
2010 Super Saver Maria's Mon 10 N/A (died 2007) N/A N/A
2009 Mine That Bird Birdstone 1 $10,000 $30,000 200%
2008 Big Brown Boundary 10 N/A (pensioned 2005) N/A N/A
2007 Street Sense Street Cry 1 $50,000 $100,000 100%
2006 Barbaro Dynaformer 13 $100,000 $150,000 50%
2005 Giacomo Holy Bull 7 $15,000 $15,000 0%
2004 Smarty Jones Elusive Quality 2 $50,000 $100,000 100%
2003 Funny Cide Distorted Humor 1 $20,000 $50,000 150%
2002 War Emblem Our Emblem 2 $4,000 $35,000 775%
2001 Monarchos Maria's Mon 1 $12,500 $35,000 180%
2000 Fusaichi Pegasus Mr. Prospector 22 N/A (died 1999) N/A N/A
1999 Charismatic Summer Squall 4 $25,000 $25,000 0%
1998 Real Quiet Quiet American 3 $20,000 $35,000 75%
1997 Silver Charm Silver Buck 11 $6,000 $7,500 25%
1996 Grindstone Unbridled 1 Private Private N/A
1995 Thunder Gulch Gulch 3 Private Private N/A
1994 Go for Gin Cormorant 13 $7,500 $10,000 33%
1993 Sea Hero Polish Navy 2 Stood in Japan (fee unavailable) Stood in Japan (fee unavailable) N/A

Average fee increase for stallions who stood in North America for a public fee the following year: 141%    
Average increase for sire whose Derby winner came from first or second crop: 225%    
Average increase for older sire: 31%