After being acquired at auction for $1,000, Medina Spirit won the Kentucky Derby just 2 years later.
The craziest part?
In addition to a $1.86M purse, Medina Spirit might now be worth $50 million.
Here are the FASCINATING financials.
Time for a thread 👇👇👇
The craziest part?
In addition to a $1.86M purse, Medina Spirit might now be worth $50 million.
Here are the FASCINATING financials.
Time for a thread 👇👇👇
1) Let's start with some history...
In 2019, more than 400 horses were sold at an auction in Florida.
The most expensive horse went for $200,000, while a group of 23 horses sold for the $1,000 minimum.
At $1,000, that means they only received a single bid.
(h/t @darrenrovell)
In 2019, more than 400 horses were sold at an auction in Florida.
The most expensive horse went for $200,000, while a group of 23 horses sold for the $1,000 minimum.
At $1,000, that means they only received a single bid.
(h/t @darrenrovell)
2) Now, just two years and one ownership change later, 1 of those 23 horses has made history.
Medina Spirit completed a wire-to-wire victory at the 147th Kentucky Derby this weekend.
The result?
A $1.86 million purse.
But that's just part of the story…
Medina Spirit completed a wire-to-wire victory at the 147th Kentucky Derby this weekend.
The result?
A $1.86 million purse.
But that's just part of the story…
3) With less than 5% of all racehorses earning more than $100,000 annually, horse racing has long been considered a money-burning experience reserved for elites.
But on the uncommon chance that your racehorse becomes a champion, well, that changes everything.
Here's why…
But on the uncommon chance that your racehorse becomes a champion, well, that changes everything.
Here's why…
4) When Medina Spirit retires in 12-18 months, he'll be sent to a "stud farm" — where horses are kept for breeding.
The best horses command $100k+ per live foal (baby horse) that they produce & are expected to mate at least 100x per year.
That's $10 million in annual income.
The best horses command $100k+ per live foal (baby horse) that they produce & are expected to mate at least 100x per year.
That's $10 million in annual income.
5) Even more interesting?
Investors will pay top dollar for the breeding rights to a legendary horse, entitling them to free breeding & a share of the stud fees.
They will also attempt to maximize revenue by transporting the horse around the world to increase annual breeding.
Investors will pay top dollar for the breeding rights to a legendary horse, entitling them to free breeding & a share of the stud fees.
They will also attempt to maximize revenue by transporting the horse around the world to increase annual breeding.
6) Here's an example:
After Justify won the Triple Crown in 2018, his breeding rights were purchased for $75M by Coolmore — the "New York Yankees of Horse Racing."
That made Justify the most valuable horse in racing history.
After Justify won the Triple Crown in 2018, his breeding rights were purchased for $75M by Coolmore — the "New York Yankees of Horse Racing."
That made Justify the most valuable horse in racing history.
7) After spending $75M, Coolmore wanted to quickly see a return on their investment.
They shuttled the horse between the Northern & Southern Hemisphere, enabling him to breed at least 250x per year.
At $150k per live foal, they would make $37.5M in the first year alone.
They shuttled the horse between the Northern & Southern Hemisphere, enabling him to breed at least 250x per year.
At $150k per live foal, they would make $37.5M in the first year alone.
8) The craziest part?
Justify was purchased as a yearling (1-2-year-old horse) just a couple years prior for $500,000.
Sure, there are expenses like training, feed, vet, transportation, and more, but regardless, turning $500,000 into $75 million is obviously impressive.
Justify was purchased as a yearling (1-2-year-old horse) just a couple years prior for $500,000.
Sure, there are expenses like training, feed, vet, transportation, and more, but regardless, turning $500,000 into $75 million is obviously impressive.
9) As for Medina Spirit, most of his future value depends on how his first set of offspring perform.
If they are fast, the stud fee increases; if they are slow, the stud fee decreases.
As a general guide, a stallion is typically worth at least 300x their stud fee — if not more.
If they are fast, the stud fee increases; if they are slow, the stud fee decreases.
As a general guide, a stallion is typically worth at least 300x their stud fee — if not more.
10) Medina Spirit's value will fluctuate over time, but here's the best part:
Despite going up against horses that were bought for $500k+, Medina Spirit won the Kentucky Derby as a $1,000 horse.
As trainer Bob Baffert says:
"He doesn't know how much he cost."
He just runs.
Despite going up against horses that were bought for $500k+, Medina Spirit won the Kentucky Derby as a $1,000 horse.
As trainer Bob Baffert says:
"He doesn't know how much he cost."
He just runs.
11) If you enjoyed this thread, make sure to follow me @JoePompliano.
I tweet interesting stories about the money and business behind sports every day.
I tweet interesting stories about the money and business behind sports every day.
12) Prefer a deeper dive than Twitter?
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