American Pharoah’s Second Life as a $200k-a-Night Stud
Bloomberg Businessweek|February 15 - February 21, 2016

The profitable second life of the world's fastest horse.

Monte Reel, photos by Thomas Prior

The verb to use in polite company is “cover.” The stud covers the mare. Or: About 11 months after she was covered, the mare gave birth to a healthy foal.

The deed itself, here in the hills of Kentucky horse country, is governed by strict rules. Section V, paragraph D of The American Stud Book Principal Rules and Requirements is clear: “Any foal resulting from or produced by the processes of Artificial Insemination, Embryo Transfer or Transplant, Cloning or any other form of genetic manipulation not herein specified, shall not be eligible for registration.” No shortcuts, no gimmicks. All thoroughbreds must be the product of live, all-natural, horse-on-horse action.

Herein lurks tension and peril. When one 1,300-pound animal climbs on top of another, both sacrifice their natural sure-footedness for about 20 seconds of knee-buckling magic. Necks can be bitten, causing legs to kick and prompting centers of gravity to shift. An unlucky fall could break a delicate foreleg—a potentially fatal injury for a thoroughbred.

“Things can go wrong,” says Richard Barry, the stallion manager at Ashford Stud, a 2,200-acre farm in Versailles, Ky. “Before any stallion is led into the breeding shed, there’s an awful lot of preparation that has gone on behind the scenes. An awful lot.”

Barry will soon choreograph the most hotly anticipated covering in recent history: American Pharoah’s first coupling with a mare. Pharoah—the name was misspelled early and it stuck—last year became the first horse since 1978 to win the Triple Crown. Now millions, and possibly billions, of dollars in revenue depend on his talents in the breeding shed. In November, about two weeks after American Pharoah retired, his 2016 stud fee was set at $200,000, the highest ever for an unproven, first-year stallion. Only one other active stud—a tested, 15-year-old veteran named Tapit - commands that much per successful cover. Tapit’s first-year fee was $15,000; his rate rose to its current $300,000 only after a decade of producing stakes-winning foals.

But Tapit was no American Pharoah on the track. He wasn’t revered as a once-in-a-lifetime freak of nature. He didn’t draw 15,000 fans to a training track on a summer day in Saratoga Springs, N.Y., when no races were being run. He wasn’t a savior, the Chosen One who returned his sport to the national spotlight.

“We have never seen interest like this in a horse,” says Barry, an Irishman who’s worked with plenty of celebrated stallions over the past 40 years. “Even Cigar—no disrespect to him—didn’t generate excitement even remotely close to this.”

Cigar was the highest-earning thoroughbred in racing history. Early in 1997, when he was led to the breeding shed for the first time, he seemed a natural-born stud, successfully mounting 34 mares in short order. But weeks passed, and none of those mares got pregnant. Cigar was sterile. “There are no guarantees,” Barry says, smiling and releasing a sigh so heavy it trembles on the edge of a groan. “It’s in the lap of the gods.”

Successful stallions are routinely matched with more than 100 mares in a five-month breeding season. Particularly energetic ones might cover as many as 200 a year. If American Pharoah produces several seasons of healthy and fast foals, standard pricing norms suggest that his stud fee will multiply exponentially. Very quickly, the $8.6 million he earned during his racing career would begin to look like small change.

The 2016 breeding season begins on Feb. 15. There’s a good chance one of the mares already on Pharoah’s calendar will ovulate shortly before that date. If so, Barry says, the farm could push the season’s first session up by 24 hours to take advantage of her optimal reproductive conditions.

Happy Valentine’s Day, American Pharoah. No pressure.

Green fields roll toward the horizon, and a mid-December sun arcs across a marbled sky. A few stubborn leaves cling to branches. In the distance, American Pharoah ambles along a dirt path, heading for Ashford Stud’s main stallion barn. It’s a cathedral of hand-hewn limestone, floored with nonslip, rubberized bricks. The interior shines with darkly polished, furniture-grade red oak. A cinematic band of light, swirling with motes, streams through a window.

Ashford Stud is owned by Ireland’s Coolmore Stud, a multinational breeding empire run by onetime Irish Senator John Magnier. For decades his Coolmore Boys, as they’re known in Kentucky, were considered icy outsiders who tightly guarded the mysteries of their operation. That reputation was fueled in part by envy. Until 2008 stud fees were tax-exempt under Irish law, an advantage that ate at many of Coolmore’s Kentucky competitors. When Ireland ended the tax break, much of the griping turned into respect for Coolmore, which produces more prized thoroughbreds than any other breeding outfit in the world.

Just before American Pharoah won the Triple Crown, Coolmore struck a deal for his stud rights with the horse’s owner, Ahmed Zayat. After selling the Egyptian beer company Al-Aharam Beverages to Heineken in the early 2000s, Zayat moved to Teaneck, N.J., and established Zayat Racing Stables in nearby Hackensack. His son Justin, 23, the stable’s manager, says the Coolmore contract prevents him from disclosing terms, but he confirms that the family retained a percentage of the stallion’s potential earnings for themselves.

“We’ll continue to keep close track of American Pharoah, and we’ll also keep close track of his progeny,” Justin says. “Obviously that’s partly because we still have an interest in him, but it’s also because we plan to breed our own mares with him. We’ll probably breed close to 10 mares with him this year.”

Since American Pharoah arrived in Versailles in early November, Barry has been trying to throttle the horse’s metabolism, to pack a couple hundred pounds on him, to calibrate his big, pounding heart to the farm’s slow, pastoral rhythms. “With what he’s going to be doing,” Barry says, “you don’t want a fiery, you know, torpedo going into the breeding shed.”

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