Big Leap - by Dan Liebman

Machu Picchu is translated to mean “Old Mountain” or “Old Peak.” Discovered on a mountain ridge in Peru in 1911, it is often called “The Lost City of the Incas.” Built around 1450 and abandoned 100 years later, Machu Picchu is one of the New Seven Wonders of the World.

Visiting Machu Picchu affords a traveler a chance to journey back in time; a place to contemplate lost civilizations while also pausing to ponder what will happen to future generations.

With modern technology, one can even be visiting the ancient ruins of Machu Picchu, 8,000 feet above sea level, and communicate by satellite phone to Kentucky while negotiating a deal to stand the colt that had won the Kentucky Derby Presented by Yum! Brands (gr. I) and was the heavy favorite to capture the Preakness (gr. I).

During the week following the Derby, Robert Clay flew to New York to meet with Michael Iavarone of IEAH Stables, which races Big Brown in partnership with Paul Pompa Jr. Clay made his pitch to stand the unbeaten Boundary colt at his farm, in a stallion barn aside others such as Smarty Jones, Dynaformer, and Rahy. Big Brown could walk each day past the statue of Triple Crown winner Seattle Slew, who ended his stallion career at the farm.

Feeling so good about the meeting, Clay saw no need to cancel his scheduled trip to Machu Picchu. He instructed his son, Case, age 34 and just a few months into his new role as farm president, to work out the details.

So, while Robert Clay studied a lost civilization of the past, Case Clay delivered the horse of the future, working with Iavarone and the attorneys on both sides on a contract that was finalized on Preakness day.

Robert Clay arrived back in the States after midnight, signed the agreement at noon, and arrived at Pimlico with his family in time for the race prior to the Preakness.

With the winning connections on the infield podium following the impressive performance by Big Brown, Robert Clay took off his hat and waved it toward the jubilant throng. Spotting him and his gesture, Iavarone removed his hat and waved it in the air as well.

Iavarone, his partners, trainer Rick Dutrow, and jockey Kent Desormeaux were smiling, but they were not smiling as broadly as Robert and Case Clay.

“It was a leap of faith,” Case Clay said, noting had Big Brown lost the Preakness, the luster would have been off, his value almost assuredly worth less than the price agreed to earlier that day.

In fact, when asked if the biggest detail to work out the past week was the purchase price, Clay hesitated, smiled, and said, “Yes, yes it was.”

Both Clays refused to answer questions regarding the specifics of the deal, though Robert Clay acknowledged he and a partnership group had purchased a minority interest in the colt. A total valuation of around $50 million has been widely mentioned.

Robert Clay noted how Iavarone and his group had total control of the racing career of Big Brown, but sadly Iavarone has already stated that the colt will not race beyond this year.

In today’s civilization, far removed from places such as Machu Picchu, once a stallion deal is signed with such a hefty value, business considerations begin to far outweigh racing options. Still, it would have been better to have left Big Brown’s impending retirement unsaid. The colt is gathering quite a cheering section, and his fans will be disappointed, as were many last year, to have another of their 3-year-old stars rushed off to stud.

But for now, for the next few weeks, Three Chimneys is the only farm that has the possibility of standing a Triple Crown winner.

Whether talking about the stallion business or the advancement of any civilization, it is always a leap of faith.

5 Comments

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goodwin

Thankfully, Big Brown is not going to  foreign ownership. IEAH has made a great decision for the well-being of its horse in the years to come!

20 May 2008 1:16 AM
Lord Carson

The Big Brown deal really is a big leap by Three Chimneys when you consider how modestly bred Big Brown is. He is not exactly a ham sandwich, but he is no blueblood either. Horses outrun their pedigrees all the time, but it's much harder to overcome a modest pedigree in the breeding shed. If you look at the modern elite sires like Storm Cat, Sadler's Wells, Nureyev, Seeking The Gold, A.P. Indy, Kingmambo, Gone West, Danzig, Danehill etc they all have fantastic pedigrees. You would be hard pressed to find an elite stallion these days with modest breeding. It's all about bloodlines in the breeding shed. In recent times the only modestly bred horse that I can remember that ascended to be a great stallion was  Seattle Slew, who ironically spent his last years at Three Chimneys. Another superstar of the seventies - Spectacular Bid, was a $20 million stallion with less than stellar bloodlines and he was a major disappointment at stud. Alydar was a blueblood, Affirmed was not. Affirmed won the battle on the track, Alydar dominated the battle at stud. All the evidence shows that Big Brown will be up against it in his second career.

On the other hand here is why it's a great deal for Three Chimneys. Big Brown is a highly marketable stallion right now. If he wins the Triple Crown a lot of mare owners will be lined up to breed to him regardless of the stud fee. (Probably $150k-$200k or even higher when you consider Street Sense is $75k and he only won the Derby). Even if he doesn't win the Belmont his initial stud fee will be $100k plus. Now his foals don't hit the track till 2012 and we won't have any valid empirical evidence on the racing ability of his progeny till about 2013 or 2014 with his second and third crops. That is plenty of time for Three Chimneys and their investors to recover a significant portion or even all of their initial investment based solely on the Big Brown hype. Even if the horse doesn't live up to the expectations a profit is almost guaranteed, and if he does become a major stallion it's a financial windfall. This is why stud farms are willing to pay major bucks for even modestly bred horses like Big Brown, Smarty Jones and Afleet Alex. The marketability of the animal is as important as the pedigree. Initially anyway. You see the thing is, to try and recover as much of the initial investment before the sire's foals hit the track. So next time you think $50-$60 million dollars for a stallion is crazy. Remember it's not as big a gamble as you think. And it sure is a hell of a lot less risky than $10 million for a yearling.

What do you think about the deal Dan?

20 May 2008 10:04 AM
Jill

Lord Carson, while I agree with much of what you said, keep in mind that Brown's dam sire is one of the great stallions you mention. Indeed, his bottom line is far better than his sire line, and is most likely why he is the racehorse he is.

20 May 2008 1:51 PM
Janesville Liz

I think Big Brown will do very well at Three Chimneys. I know the seasons and matings adviser at the farm, Anne Peters, and if there is anything about pedigrees she does not know, then it is not worth knowing. She is an expert, and she will work hard to make sure that Big Brown gets mares whose pedigrees and race and produce records mesh well with his. He could not be in better hands.

21 May 2008 1:50 PM
racing fan

Lord Carson, I agree with Jill. And he doesn't just have Nureyev in there, but also Danzig. And look up a pic of Danehill....look like anyone you've seen recently? In the inexact 'science' of breeding, you just don't know how the genetic 'tumblers' are going to fall along that line of DNA...Natalma 'danced' with Neartic 5 times, but only produced one Northern Dancer.  What might be making this horse special is Special...producer of Fairy Bridge..producer of Sadler's Wells.  Who knows what the double dose of ND in the 3rd gen might do. He might just jump up and become another ND in the breeding shed (wouldn't that be awesome)

To sum up, I see lots!! of blue in that blood to nick with. :)

GO Big Brown!

22 May 2008 5:47 PM

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