A recent article about the bankruptcy proceedings against Ahmed Zayat, owner of Triple Crown winner and leading freshman sire American Pharoah in the Paulick Report, might actually say more about the economics of the thoroughbred industry than it does about Mr. Zayat. One can certainly criticize Zayat's business plan but it’s worth noting that even coming up with the first Triple Crown winner in almost 40 years (who has now gone on to be the leading Freshman sire), has not come close to covering the cost of spending millions to buy the “best” horses. Paulick states, “In 2018, the stable purchased 19 horses at public auction for $5,247,000, but purse earnings barely topped $2 million. Earnings declined further to $1,418,402 in 2019. There were no purchases in 2019, according to Bloodhorse.com. Despite spending nearly $27 million at public auction on 107 horses over four years, from 2015-18, Zayat Stables' last Grade 1 win was American Pharoah in the 2015 Breeders' Cup Classic at Keeneland. It's registered just one graded stakes win since then”. 

The ‘teachable moment’ here is that the only way to have a shot to make money is to not overspend for horses at the sales. Purse money, even including the value of quality horses for breeding upon retirement, simply do not support paying top dollar for the supposedly 'best' horses at sales. As one of our previous blog posts demonstrated, even the most savvy buyers with unlimited funds to spend have regularly purchased sales toppers than end up being total duds on the racetrack. Zayat recent results - spending 27 million dollars on 107 horses, with just one graded stakes win in four years between them, certainly does not indicate a great level of success. Have others produced better results with that kind of budget? Sure, but spending millions does not guarantee you will end up with any top stakes winners. For everyone, at all levels, this is a game of hot and cold steaks. If you work within a realistic budget, don’t overpay, and run it like a business, you have a shot at making money, but this isn’t a game for little boys (or girls) in short pants.