11/13/2015 3:45PM

Simon: Coolmore skilled at turning risk into reward

Photos by Z
Coolmore's M.V. Magnier poses with Triple Crown winner American Pharoah on the colt's first day at Ashford Stud.

A number of championships were decided at the Breeders’ Cup on Oct. 30-31, with fortunes made and dreams dashed through the 13 races. The biggest winner of all may well have been Ashford Stud, home now to Triple Crown hero American Pharoah – who blitzed the Classic field and solidified his status as one of the best racehorses seen in decades. With that came validation of a high stud fee for the son of Pioneerof the Nile when he covers mares for the first time in 2016 at the Versailles, Ky., farm.

Coolmore made a big offer to owner and breeder Ahmed Zayat last spring to secure the breeding rights to American Pharoah when he retired at the end of 2015, and that high-risk proposition looks like a smart gamble now. The Irish-based operation could possibly recoup its investment in a single season given Ashford’s longtime penchant for attracting large books of mares to its stallions.

That Ashford, the American division of Coolmore Stud, went after American Pharoah early was not unexpected; in fact, the move came straight from its standard playbook. Ashford has acquired an interest in almost every American champion juvenile colt of recent years, an approach that is paying big dividends. Since 2009, Ashford has bought into five 2-year-old champions: Lookin At Lucky (champion in 2009), Uncle Mo (2010), Hansen (2011), Shanghai Bobby (2012), and American Pharoah (2014). The blank year is 2013, when America’s champion juvenile male was Shared Belief, a gelding.

This formula, fueled by American breeders’ fascination with speed and precocity, has been both productive and lucrative for Ashford. Lookin At Lucky has covered an average of 109 mares in four years at stud; Uncle Mo has averaged 172 mares for three years; Shanghai Bobby, who entered stud in 2014, covered a two-year average of 181 mares.
The outlier here is Hansen, who covered 147 mares in his only Ashford season, after which he was sold to Korean interests.

As economically successful as this formula has been, it has been equally successful in producing results on the track.
Since 2011, Ashford has been represented by America’s leading freshman sire three times. Stallions Scat Daddy and Dunkirk topped their respective lists in 2011 and 2013. In 2014, Lookin At Lucky ranked third, not far off leader Quality Road. And this year, Uncle Mo is the premier freshman sire by a very large margin through mid-November, already setting a North American record for progeny earnings among both freshman and juvenile sires – topping previous dual record holder Tapit’s marks set in 2008.

Coolmore knows the American market and how to make a stallion successful here, a point Zayat made when he announced that the operation had bought the majority breeding rights in American Pharoah.

Precise terms of the agreement between Zayat and Coolmore have never been revealed, but the deal included escalation clauses for winning legs of the Triple Crown. Put any number on the value you want, from $10 million to $20 million or even higher, and it is a bargain. When the deal first went public in May, before American Pharoah swept the Crown, Zayat said the colt’s stud fee could be in excess of $200,000. As outlandish as that may have sounded at the time – since the highest fee then and now is the $300,000 for leading sire Tapit – it turned out to be spot on.

American Pharoah will be priced at $200,000 his first year, and if Ashford is as successful as it has been in the past in getting mares to a promising young stallion, there is a good chance the operation will recoup whatever it paid for the rights in the very first year.

While Coolmore will not be selling all available seasons on the open market – it will use some breedings for its own mares, some for foal-sharing arrangements with top mares owned by others, and some will be used by Zayat – the dollars will add up fast if he gets a large book.

Ashford attracted some impressive numbers to its top young progenitors this past breeding season: Uncle Mo, 221 mares; Scat Daddy, 217; Shanghai Bobby, 202; Munnings, 196; Declaration of War, 192; and Verrazano, 185. Farm denizens took six of the top nine places among North American stallions by most mares covered in 2015.
If American Pharoah covers 150 mares in 2016, the retail market value of his services will be $30 million. If he covers 200 mares, make that $40 million.

As astronomical as that may seem, it is still short of what Storm Cat generated at the height of his career with some 100 mares a year at $500,000 a pop, an economic output of about $50 million annually.

In any event, the value of breeding rights in American Pharoah illustrates why many owners and breeders play the high-risk game: If you hit the home run, there is nothing like it anywhere in sport. Or business.