American Pharoah's next big win: Stud fees

Why American Pharoah wins without the triple crown
Why American Pharoah wins without the triple crown

American Pharoah is the first Triple Crown winner in 37 years, but his biggest payday won't be on a race track.

The big money will come from the stud fees he'll earn once his racing days are over.

The horse's owners, Zayat Stables, sold his breeding rights on May 20 for an undisclosed amount, just four days after he won the Preakness and became a contender for the Triple Crown.

Justin Zayat, racing manager for Zayat Stables, told ESPN that they had passed on an offer "north of $20 million" for the breeding rights.

But when the sale was announced, his father Ahmed Zayat told the sports network it was an offer he just couldn't pass up.

Jockey takes third shot at Triple Crown
Jockey takes third shot at Triple Crown

Even if they paid tens of millions for the breeding rights, the new owners have a very good shot of making back their investment. American Pharoah could collect between $6 million to $7.5 million in stud fees every year for decades to come.

Related: The best bet for American Pharoah? Hang onto those tickets

As a Triple Crown winner, American Pharoah could collect as much as $100,000 per foal in stud fees, according to Evan Hammonds, executive editor of BloodHorse, the trade publication that covers the horse breeding industry. A horse can father 100 foals a year.

Prior to the Belmont, when he just had Kentucky Derby and Preakness wins, it was estimated that he would collect $60,000 to $75,000 per foal,

That kind of stud money means most successful racing careers are short, Hammonds said.

Related: Big money at the Belmont Stakes

Additional races would put American Pharoah at risk for an injury that could force his owners to put him down before he ever gets put out to stud. There is also the risk that Pharoah could start losing, cutting into his stud fees.

It's not just his success on the track that makes American Pharoah so valuable. It's also his blood lines.

His father, Pioneerof the Nile, (that's not a typo) makes $60,000 per foal because he's fathered so many successful horses. And that rate is likely to climb next year given Pharoah's success.

Related: American Pharoah's jockey earns peanuts compared to other sports

California Chrome, which won the Derby and Preakness last year, hasn't been put out to stud yet since his blood lines aren't as prestigious. His stud fee is probably in the the neighborhood of $25,000.

So his owners decided to race him for another year. He went to the Dubai World Cup where he placed second, scoring another $2 million in winnings.

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