05/25/2013 7:00AM

A new era for Calumet: Historic farm looks to future with Kelley at helm

Barbara D. Livingston
Erin Kelley, daughter of Calumet Farm owner Brad Kelley, proudly displays the Preakness Stakes trophy following Oxbow’s win May 18 at Pimlico.

Continuity and change are two themes consistently at the forefront of Thoroughbred racing.

Historic farms continue operations as they pass from hand to hand. The sport’s most prestigious events are run each year without interruption, with a new cast of characters. Each season, top horses retire to stud to perpetuate their bloodlines – and are quickly replaced on the racetrack by a new generation.

At Calumet Farm, located adjacent to Keeneland Race Course in Lexington, Ky., grazing mares keep a watchful eye on their foals as they play against a background of pristine white fences and red-trimmed barns. It’s a common sign of springtime, seen for decades since the farm was founded by William Monroe Wright in 1924.

Some 540 miles away in Baltimore on May 18, a track worker at Pimlico Race Course ascended a ladder to paint the Calumet silks onto the traditional weather vane following Oxbow’s front-running score in the 138th edition of the Preakness Stakes. But they’re not the iconic devil’s red and blue silks carried to victory by the likes of Triple Crown winners Whirlaway (1941) and Citation (1948) – they’re the black with gold chevrons of Forbes 400 member Brad Kelley, the man now responsible for writing the next chapter in Calumet’s storied history.

“I’m just so happy for Mr. Kelley,” D. Wayne Lukas, trainer of Oxbow, said. “He’s trying to revitalize Calumet, and now Calumet is back in a classic race. That’s just very gratifying.”

Calumet has lived through a number of transformations, morphing from a Standardbred facility into an elite Thoroughbred nursery as it passed through the Wright family, campaigning two homebred Triple Crown winners, and, decades later, surviving an episode of bankruptcy. Today, the farm is in the hands of Kelley, a deeply private billionaire with a passion for racing.

Names like Whirlaway and Citation have been succeeded in the Calumet idiom by the likes of Oxbow and Optimizer, while Americain and Point Given reside in the stallion barn once occupied by Bull Lea and Alydar. Kelley has continued to race in his own silks because Calumet’s original colors were purchased by a Brazilian businessman at the 1992 bankruptcy auction of the former owners of the historic farm. But the operation’s pursuit of excellence is unchanged, and the Thoroughbred industry has expressed support.

“I think the whole community is happy with it,” said John Stuart, president of Bluegrass Thoroughbred Services, which markets Calumet’s stallions. “I get stopped daily about how happy everyone is to see the farm just full of horses.”

The announcement that a new company, the Calumet Investment Trust, had purchased the 798-acre facility was made May 3, 2012. The price tag was $35,931,960, according to records filed with the Fayette County Clerk. Kelley, who leases the farm from the trust, owns two other farms in the Lexington area – Bluegrass Hall, which formerly housed his racing operation, and Hurricane Hall, home to his breeding stock. All his horses now reside at Calumet.

“He’s pretty excited,” said Calumet farm manager Eddie Kane, who has been involved as agent in the acquisition of Kelley’s top horses, including Oxbow. “He loves the game. Loves, loves the sport. He’s a big horse-racing fan, and it means a lot to him. People try to get to the Derby for a lifetime, and we’ve been so fortunate and lucky to be in the Derby two years in a row. He just loves horse racing. He’s a big, big fan of it. He’s a great guy – he’s great to work for.”

Kelley, who began racing as Bluegrass Hall in 2009, has been racing and breeding under the Calumet banner since February. During the farm’s glory days, that name was represented by a record eight Kentucky Derby winners. Oxbow is the eighth Preakness winner to run for Calumet ownership.

The rise and fall of Calumet

Calumet’s story began in 1924 as Wright, an entrepreneur who made his fortune with the Calumet Baking Power Company, moved his Standardbred operation from Illinois to Lexington. The owner died in 1931, with leadership of Calumet passing to his son, Warren Wright, Sr. The latter – a shrewd businessman who had orchestrated the sale of the family company to Postum, later General Foods, just weeks before the stock market crash of 1929 - began converting the farm to an elite Thoroughbred breeding operation, turning an eye to the bloodstock market in order to achieve that goal. One of his early acquisitions was Preakness winner Nellie Morse, whose resulting foal, Nellie Flag, was Calumet’s first champion. The filly went on to become a prolific broodmare, producing, among others, champion Mar-Kell and Kentucky Oaks winner Nellie L., both stakes producers.

In 1936, Warren Wright made two other bloodstock acquisitions that would forever shape Calumet's future. He purchased an interest in the stud career of English Derby winner Blenheim II, who was in the process of being imported and syndicated by Claiborne Farm. Wright also purchased a yearling son of Bull Dog at the Saratoga auction.

Blenheim II gave Calumet 1941 Triple Crown winner Whirlaway. The Bull Dog yearling developed into top racehorse Bull Lea, who became Calumet's foundation stallion, reigning as America's leading sire five times and leading broodmare sire four times. His most famed son was Citation, who swept the 1948 Triple Crown and became racing's first millionaire. Among his other top runners were Horse of the Year honorees Armed, Twilight Tear, and Coaltown; Kentucky Derby winners Iron Liege and Hill Gail; Preakness winner Faultless; Kentucky Oaks winner Real Delight; and champions Bewitch and Two Lea.

Warren Wright died in 1950, with his wife, Lucille, inheriting the property. She and second husband Admiral Gene Markey continued to campaign top horses, including four Kentucky Derby winners, though the farm was not producing classic horses at quite the same rate as in the 1940s.

Fortunes began to change again with the emergence of Alydar, who staged perhaps racing’s greatest rivalry alongside Affirmed, finishing second in all three 1978 Triple Crown races by a combined margin of less than two lengths. Alydar went on to become a leading sire, producing champions Alysheba, Easy Goer, Criminal Type, Turkoman, and Althea. 

"We had a hell of a run under that regime," Lukas, who trained Criminal Type and Althea, said.

However, the farm’s fortunes were rapidly unraveling. Lucille Markey had died in 1982, and Calumet passed to Bertha Wright, the widow of Warren Wright Jr. She tabbed son-in-law J.T. Lundy to handle the farm’s operations, but his business practices plunged the facility into debt. In late 1990, Alydar, who was under a multimillion-dollar insurance policy, was euthanized after breaking his leg in a stall accident, leading to accusations that Lundy had ordered the stallion killed.

In 1991, the farm collapsed into bankruptcy amid a web of lawsuits. Lundy eventually served 4 1/2 years in federal prison on counts of fraud, conspiracy, and bribery. He denied any wrongdoing in Alydar’s death.

"We honestly didn't realize how bad things had grown," Bertha Wright told The New York Times in 1991. "Not until last February, maybe. Then people panicked and started to sue us. Not the big creditors, but some of the little ones. People stabbed us in the back."

In March 1992, Calumet was put up for auction in order to pay creditors owed almost $100 million. The property was purchased for $17 million by Henryk de Kwiatkowski. The native of Poland escaped to England during World War II; later immigrated to Canada; made his fortune in aircraft trading; and eventually became involved in the Thoroughbred industry, campaigning champion Conquistador Cielo, among others.

“I am not a Kentuckian. I cannot claim such a reason to be attached,” de Kwiatkowski told Business First in 1993. “But this place Kentucky caught me so. I looked at [the farm for the first time in 1975], and I loved it very much. It was like a little boy’s dream to be a fireman. My dream was Calumet.”

Under the leadership of de Kwiatkowski – who vowed to “not change one speck of grass” on the farm – Calumet operated as a boarding farm and sales agent. De Kwiatkowski died in March 2003, with the facility passing to a trust and his children as the beneficiaries. In the ensuing years, Calumet bred and sold multiple Grade 1 winner Switch and struck deals to stand Ice Box and Cactus Ridge in 2012, bringing a stallion operation to the facility for the first time in at least seven years.

‘Sometimes you get dealt a good hand’

Kelley, who prefers to stay out of the limelight, is a self-made man whose net worth, according to Forbes, was $1.9 billion as of March. A native of Kentucky who now is based in Tennessee, Kelley grew up on a tobacco farm that also housed livestock. Kelley, who never earned a college degree, founded Commonwealth Brands, which produces discounted cigarettes, in 1991. A nonsmoker, Kelley built the operation from the ground up, beginning with just a handful of employees in Bowling Green, Ky. He eventually sold the business to Houchens Industries for $1 billion in 2001.

“I like to think [the secret to success] was discipline and patience and avoiding pitfalls and working for the long term,” Kelley told The New York Times in 2005. “I’m sure as heck not Horatio Alger. There are a lot of people out there who are real smart and work real hard, and it doesn’t happen for them. I just happened to be the one that it did. Sometimes you get dealt a good hand.”

Kelley owns more than 1.7 million acres in Texas, Florida, and New Mexico, making him the fourth-largest private landholder in the United States, according to the 2012 Land Report 100. Kelley does not typically develop the land he buys; on several occasions, he has purchased cattle ranches and leased the property back to the original owner, who keeps the operation running.

Kelley also is an active wildlife conservationist, spending millions of dollars to protect and reintroduce to the wild animals such as black rhinos, white rhinos, pigmy hippos, okapi, impalas, white-bearded wildebeests, gazelles, and Eastern bongos.

With such prominent land purchases and a passion for conservation, it is an appropriate twist in Calumet’s story that Kelley – an entrepreneur in the vein of William Monroe Wright – would acquire one of the most famed pieces of land in Lexington, seeking to protect its legacy and guide its future. Kelley is a former stockholder in Churchill Downs Inc. and formerly was a majority owner of Kentucky Downs, near his hometown.

“He gets a kick out of these horses,” Kane said. “One example is, [Irish import] Starstruck recently won her first start [in the U.S.] at Churchill Downs from here to Frankfort. He got a great thrill out of that. Stuff like that, he loves.”

In another nice twist of fate, Kelley’s main trainer is Lukas, who conditioned Calumet’s last champion, 1990 Horse of the Year Criminal Type.

“He’s a wonderful person to work for because he pretty much gives you full rein,” Lukas said. “He’s very interested, and he’ll make suggestions, but he doesn’t force his opinion on what you’re trying to do. He’s never been involved one iota in a rider selection.”

However, don’t mistake Kelley’s willingness to work with a trainer as indifference. Lukas said the owner is sharply aware of the day-to-day workings of the backstretch and is very much involved.

“He’s very competitive,” Lukas said. “He doesn’t come around and down to the barn, or even go to the races, but he’s very, very in tune with what’s going on. You call him up this morning, and he’ll know everybody’s work and everything. He’s very much involved.”

On-track success

Prior to Oxbow’s emergence this season, Kelley and Lukas had campaigned a number of standout runners under the Bluegrass Hall banner, including multiple graded stakes winner Optimizer. The homebred son of English Channel was the only member of his crop to compete in all three legs of the 2012 Triple Crown. Kelley also owns Hightail, the winner of the 2012 Breeders’ Cup Juvenile Sprint, and Skyring, the winner of the Grade 2 Dixie Stakes on the 2013 Preakness undercard.

Oxbow captured the Grade 3 Lecomte Stakes and finished second in the Grade 2 Rebel Stakes earlier this year to earn his way into the Triple Crown series. He finished sixth in the Kentucky Derby as the first starter to carry Calumet’s name in the race since 1990. Two weeks later, the son of Awesome Again rolled in the Preakness. For Lukas, it was his sixth win in the race and a record 14th in a Triple Crown event. Lukas said giving Kelley his first classic victory was more meaningful.

“They’re all special because they were all with a different client,” Lukas said of his Preakness victories. “The key, if you’re training horses, is to try to win one every once in a while for a new guy. We’ve got a new guy in Brad Kelley at Calumet, and that is just the good economics of it. You give that guy that special moment ... to know that he was watching at home, and to put Calumet – which we all know that name – back on the front pages of the racing publications is very special. I’m so happy for him, just to have the opportunity to represent him.”

Oxbow, whose immediate female family includes the likes of Tiznow, Budroyale, and Paynter, was a $250,000 purchase at the 2011 Keeneland September yearling sale.

“We like the athlete – to me and to Wayne, they have to look like an athlete,” Kane said. “We’re basically looking for athletes with some pedigree, and we go from there.

“Mr. Kelley is pretty darn good at pedigrees,” Kane added. “He loved [Oxbow’s catalog] page. We loved him as an individual. He was athletic. He looked like you could put a saddle on him and run him when we saw him as a yearling. Mr. Kelley, as I said, he loves pedigrees, and he knows pedigrees. So, as a team, we bought him. Mr. Kelley picked the horse out on paper, and we liked him as an individual, so Mr. Kelley pulled the trigger and bought him.”

While the owner takes advice from a bloodstock agent and a trainer in selecting horses, Kane emphasized that Kelley’s willingness to play at the top levels of the game is vitally important to the operation’s success.

“It wouldn’t be happening without Mr. Kelley,” Kane said. “He’s the one that’s putting his skin on the line. All the credit goes to Mr. Kelley.”

Kelley’s decision-making paid off in a big way.

“It was a great race,” said Erin Kelley, who was on hand to represent her father at the Preakness. “[Oxbow] ran really well. I’m just excited to see what’s next.”

The next step for the colt, with the 3-year-old championship still very much up for grabs, is expected to be the Belmont Stakes on June 8 in New York.

Looking to the future

Waiting in the wings behind are a number of young horses who will be the next to carry the Calumet banner. Kelley has 34 2-year-olds in training; he also has a number of yearlings and weanlings at the farm, both homebreds and sale purchases.

Calumet also is building a stallion roster, with five stallions standing the 2013 season. All but one raced through at least their 5-year-old seasons, making a combined 112 starts.

“Mr. Kelley, being a fellow that likes to race horses, is big on soundness,” Stuart said. “The thing that all these horses have that is similar – the only thing they have that is similar – is they were all very sound horses. And he is going to breed a lot of mares to each of those stallions. When he bought them, soundness was a very critical part of the equation for him. He likes to see his horses run a lot. That’s one of the reasons he’s with Wayne Lukas – because he’ll run them. We’re looking to breed sound horses over there.”

Chief among the diverse group of acquisitions is the globe-trotting Americain, the winner of the 2010 Melbourne Cup. The 8-year-old Dynaformer horse won 11 of 34 career starts and earned $5,780,679 while competing on four continents.

“He’s a phenomenal individual,” Kane said. “I say to people, ‘Come over and look at this Dynaformer.’ He’s a gorgeous, gorgeous animal. Mr. Kelley loved Dynaformer and wanted to get a good representative of Dynaformer here.”

Calumet stands a second son of the late Dynaformer in stakes winner Lentenor, a full brother to the ill-fated 2006 Kentucky Derby winner Barbaro.

The farm also is standing 2001 Horse of the Year Point Given, who moved from Three Chimneys Farm this year. The only stallion on the roster with a prior stud record, Point Given is the sire of Canadian Horse of the Year Sealy Hill, Canadian champion Points of Grace, and Grade 1 winners Coil, Go Between, and Point Ashley. The farm’s other stallions are Canadian champion and classic winner Eye of the Leopard and Dogwood Stable’s multiple graded stakes winner Aikenite.

“I think it’s very flattering to the horse that this outfit bought him, and they are breeding to race,” Dogwood President Cot Campbell told the Aiken (S.C.) Standard. “They’re not market breeders. This man is going to breed his mares to this horse. Aikenite had precocity, quality, class, and looks. I think it’s flattering that he would go to one of the great farms of all time.”

As his breeding operation expands, Kelley has been active at various Kentucky auctions. He purchased 23 horses for a combined $1,407,000 at the 2012 Keeneland November breeding-stock sale, led by young stakes winner Bai and Bai for $160,000. He also bought a number of mares at the 2013 Keeneland January and Fasig-Tipton Kentucky mixed sales.

Also in the broodmare band is Grade 1 winner Runup the Colors, purchased for $60,000 at the 2011 Keeneland November mixed sale. The A.P. Indy mare is the dam of Grade 2 winner Revolutionary, third in the Kentucky Derby.

“We like grass horses and route-of-ground horses,” Kane said. “We tried to buy quality in November, and we’ve got some great mares. I’ve got 100 babies here and a diverse group of stallions represented. We’re trying to sort of put our heads down and go to work.”

Kentucky Derby winners bred and owned by Calumet

Whirlaway (1941†)
Pensive (1944)
Citation (1948†)
Ponder (1949)
Hill Gail (1952)
Iron Liege (1957)
Tim Tam (1958)
Forward Pass (1968)
Calumet also bred and sold 1991 Derby winner Strike the Gold

Preakness Stakes winners owned by Calumet

Whirlaway (1941†)
Pensive (1944)
Faultless (1947)
Citation (1948†)
Fabius (1956)
Tim Tam (1958)
Forward Pass (1968)
Oxbow (2013)
All but Oxbow raced as homebreds

Belmont Stakes winners bred and owned by Calumet

Whirlaway (1941†)
Citation (1948†)

Racing Hall of Fame members raced by Calumet

Davona Dale
Real Delight
Tim Tam
Twilight Tear
Two Lea

† Triple Crown winner

A Calumet timeline

William Monroe Wright establishes Calumet as a Standardbred breeding and racing operation.

William Monroe Wright dies, with leadership of the farm passing to son Warren Wright Sr., who begins converting it to a Thoroughbred operation.

The Wrights purchase Nellie Morse, carrying eventual champion Nellie Flag. The same year, Hadagal is the Wrights’ first Thoroughbred stakes winner, taking the Champagne Stakes at Belmont.

The farm acquires an interest in the stud career of Blenheim II and purchases eventual leading sire Bull Lea as a yearling.

Calumet hires famed trainer Ben A. Jones, whose son Jimmy eventually joins him.

Whirlaway wins Triple Crown.

The farm becomes the first owner to exceed $1 million in purse earnings in a single year.

1947-’49, 1952-’53
Bull Lea reigns as America’s leading sire.

Citation wins Triple Crown.

Warren Wright Sr. dies, with widow Lucille Wright assuming farm leadership.

Citation becomes first Thoroughbred to achieve millionaire status.

Lucille Wright remarries, to Admiral Gene Markey. Hill Gail wins the Kentucky Derby.

Trainer Ben A. Jones dies; the year also marks the last of Calumet’s leading owner and breeder titles.

Jimmy Jones retires, and Bull Lea dies.

Forward Pass becomes the only horse to win the Kentucky Derby via disqualification after Dancer’s Image’s positive drug test.

Calumet hires John Veitch, son of Hall of Fame trainer Sylvester Veitch, as its trainer.

Alydar finishes second to Affirmed in every leg of the Triple Crown.

Lucille Markey dies, two years after Admiral Markey. The farm passes to the heirs of Warren Wright, with operational management going to J.T. Lundy.

Alydar reigns as America’s leading sire as his son Criminal Type takes Horse of the Year honors, also helping Calumet claim the Eclipse Award as leading breeder. But that November, the stallion is euthanized after breaking his leg in a suspicious stall accident.

Just months after Alydar’s son Strike the Gold, bred and sold by Calumet, wins the Kentucky Derby, the farm declares bankruptcy.

Henryk de Kwiatkowski buys Calumet for $17 million at a bankruptcy auction.

De Kwiatkowski dies, and the operation passes to his family members as a group of trustees.

Calumet is purchased for $35.9 million by a trust that leases the property to Brad Kelley. Later that year, the owner’s Hightail win the Breeders’ Cup Juvenile Sprint.

Oxbow becomes the first Kentucky Derby runner to start under Calumet’s name in more than two decades, finishing sixth. Two weeks later, the colt wins the Preakness Stakes.