American Pharoah Page 5
Bill Mack and Bob Baker, real estate titans, let their Hall of Fame trainer D. Wayne Lukas pick their horses—he had won four Kentucky Derbies, after all. Others relied on bloodstock agents like John Moynihan, who blends the skills of both a horseman and pedigree sleuth with the polish of a salesman who can persuade billionaires that they-got-the-horse-right here, one certain to be a Kentucky Derby winner and money machine as a stallion. There is no surefire prescription for identifying the next LeBron James from what essentially is a group of seventh graders. Still, they get paid handsomely for trying—usually 5 percent of the purchase price. All were looking for one thing: a horse with an exquisite blend of balance, structure, intelligence, and athleticism. They can ogle the horses all they want, read up about them, and watch them stand and walk a bit, but they can’t take them out for a run.
There are no lemon laws when it comes to buying racehorses, and legal disputes over horse sales gone sour do happen. Horsemen who value their reputations have policed the line between proper disclosure and high-stakes swindling.
Nearly everyone who has persevered in the racing business seems to have been stuck with a horse that was not quite as advertised. Charlotte Weber, whose family founded the Campbell Soup Company and who is an owner and breeder, once took an expensive yearling home to her farm in Ocala, Florida, only to discover he had a broken leg. Without a money-back guarantee, Weber could only acknowledge the flaw by naming the horse Fissure.
Sometimes, alterations aside, you get lucky. In 1996, Baffert bought a colt for the bargain-basement price of $17,000 because he looked athletic.
“Does he have cancer?” asked Baffert’s friend and the new owner of the colt, Mike Pegram.
Only later did they discover that the colt had undergone a transphyseal bridge, or what is known as a “screw and wire,” to straighten a knee. Two years later, that colt, Real Quiet, went on to capture the Kentucky Derby and Preakness Stakes in 1998, and his Triple Crown bid was thwarted by only a nose in the Belmont Stakes.
It was a client of Moynihan’s, the late Jess Jackson of Kendall-Jackson wine fame, who did the most to clean up the horse-trading industry a bit by putting some safeguards in place. There always have been whispers of false bidders who conspire with agents to run up the prices of horses as they pass through the sales ring. Rumors circulate of back-room deals between sellers and the agents for wealthy newcomers to the sport: They agree on a price, say $250,000, entice the buyer to pay $300,000, then split the difference. Jackson filed a lawsuit, saying that what one horse trader calls commission to an agent for help in selling a horse is actually a bribe or a kickback. He lobbied for legislation in Kentucky that prohibits a practice known as dual agency, in which an agent receives money from the buyer and the seller in a horse trade.
Breeders and consignors have acknowledged that agents of buyers had approached them, seeking to inflate prices on their horses.
“When you tell them no, you understand that they are never coming back to buy one of your horses,” said Arthur Hancock III, whose Stone Farm has produced three Derby winners. “Honest sellers can’t compete with those who cheat. I’m a fourth-generation horseman, and I’m ashamed that a winemaker had to clean up our sport.”
It is a combination of hubris, deep passion for the sport, and the expense and embarrassment of litigation that has kept many new owners out of the courtroom and, eventually, run them out of the business. Satish Sanan, a computer magnate, who built a farm and racing operation, Padua Stables, in Florida, became a reformer after an admittedly rough start in the business in the late 1990s. He had invested more than $150 million in the sport.
“Most of us have come from other fields where we’ve done well and think we won’t make the same mistakes the guy before us did,” said Sanan, who left the horse business in 2012. “But we all do make those mistakes. Some just take their lumps and go away.”
Zayat was determined not to be taken advantage of or be chased from the sport. He had reached the top levels of the game extraordinarily quick but at a deep cost. He had cut his racing and breeding operation in half and was still paying the bank and his creditors. Horses carrying Zayat’s distinctive blue and gold silks splattered with Zs included twelve Grade 1 winners and five Eclipse Award finalists. In the past six years, three of his horses had finished second in the Kentucky Derby, first Pioneerof the Nile, followed by Nehro in 2011 and Bodemeister the next year. He had come close, agonizingly close, to winning the race that everyone in the sport most wants to conquer. He had the bank breathing down his neck and knew there only was one way out for Zayat Stables.
“I got to sell horses,” he said.
It is, indeed, the golden rule of horse racing: take the suitcase full of cash today because the talented horse you love now may, God forbid, twist an ankle or suffer something worse tomorrow. Frances Relihan was not the only horse person who had fallen hard for the Littleprincessemma colt; the crew at Taylor Made Farm, where the bay was transferred the previous January, marveled at how the weanling was filling out.
For Frances, it was heartbreaking to see horse vans descend upon her farm and take away the mares and stallions, along with their babies. Simon had put the Vinery up for sale and now Frances’s life’s work was somebody else’s. She was especially bummed to see the Littleprincessemma colt be driven off to Taylor Made. The farm was owned and run by four brothers—all third-generation horsemen—who had earned a reputation for operating a first-class operation specializing in high-quality horses. She knew the colt was in excellent hands but brushed and caressed him a little longer than she had some of the others. Frances cried when the Littleprincessemma colt was led into the van and driven off. She knew she was not likely to see another one like him and she told the Taylors so.
Mark Taylor, who took care of marketing and public sales, understood immediately. The colt came in with a large group of better bred peers—sons and daughters of Tapit and Giant’s Causeway—but the bay moved among them with a confidence that said they were going to spend the rest of their careers chasing him.
Taylor called it the “It factor”—the colt had something that no one could put a finger on… at least not yet.
John Hall, the farm’s yearling manager, recognized the colt as an “old soul” because he projected a been-there-done-that aura. The yearling was so cool and unflappable that Hall felt he must have been a top-class racehorse in a previous life. It was the colt’s walk, however, that moved Taylor the most.
“You know when horses kind of unhinge their shoulder and just really flow when they walk?” he said. “It was a walk that the more you looked at him, the more you loved him.”
So when the Taylors told Zayat that the Littleprincessemma colt was the best yearling on their farm and was likely to fetch a big price, all agreed that the Saratoga Sale was their target. Zayat looked at the amount of money he needed against what he thought the colt would bring and put a $1 million price tag on the colt. He decided not to take a penny less. Zayat would buy the colt back if he had to, just write a check to himself and consider the 5 percent commission he had to pay Fasig-Tipton as the cost of doing business.
It was a plan, a pretty good one, until the colt banged himself up in the weeks before the sale and two members of Zayat’s horse-picking team sowed some seeds of doubt in the owner.
There were some among the team that believed $1 million was overly ambitious. He was a good-looking colt, but the first crop from Pioneerof the Nile was just now hitting the racetrack, and there weren’t many of them yet because it was early in their two-year-old careers. The sire was a decent racehorse with a nice enough pedigree, but there were scores of stallions that fit that profile at this stage of their career and were now standing for $2,500 to $5,000 in the hinterlands of California and Florida, Pennsylvania and New York. Buyers weren’t going to go deep in their pockets without a proven track record. The sensible price point was $250,000 or perhaps $300,000, but then some bad luck visited the colt and left a blemish.
> No one is sure when or how exactly, but the colt got a scrape on the back of his front ankle that was starting to swell. He could have gotten his foot caught in an opening in his stall or banged it in the trailer or just stepped on himself. Suddenly, however, Hip No. 85, as he was listed in the catalogue, was drawing attention for all the wrong reasons. This large, lovely bay yearling had a swelling the size of maybe two marbles below his fetlock, or ankle. He wasn’t lame. He didn’t limp. The Taylors’ veterinarians shrugged it off and said it would vanish by the following week. Still, his potential sales price continued to drop each time prospective buyers watched him walk amid the barns and spotted the imperfection.
“It was just like a pimple on a kid’s face on prom night,” Taylor told Zayat. “It’s unfortunate it happened, but it’ll be gone by next week. Prom pictures might get screwed up, but that’s kind of the way it is at a horse sale.”
Whether Hip No. 85 was nicked up or not, Jeff Seder and Patti Miller believed—no, knew—that this colt was not only the best horse in the sale, but also potentially one of the best horses they had seen at a horse auction in many years. They were the principals of EQB (Equine Biomechanics and Exercise Physiology), a Pennsylvania-based bloodstock agency that was as unusual as its name, mainly because of its reliance on science and an ever-evolving database. This database was maintained by Seder, a Harvard-educated MBA, attorney, entrepreneur, and business-turnaround-artist who had spent much of the last forty years trying to convince horse owners that he wasn’t a crazy voodoo doctor. Seder was a free spirit but a disciplined one, who was interested in the impact of genes and organs and design on athletic performance of horses as well as humans. In the early 1980s, he had worked with the U.S. Olympic Sports Medicine Committee on ways to identify, nurture, and build better bobsledders, shot putters, and figure skaters. He was an excitable sort who talked in riddles and often lectured with the verve of a favorite professor.
“Pedigree is really a set of variables used to predict the probability of what you’ll get before the horse is born,” he said, laying out the foundation of his core belief. “After the horse is a physical specimen standing in front of you, there are more reliable measures. The fact that something may have been unlikely in a horse because of its pedigree should not overrule the observation of an individual who has that quality anyway.”
To that end, Seder measured horses’ hearts, spleens, throats, and airways often with instruments that he invented and subsequently patented. He employed a high-speed, high-definition camera that clicked off up to 500 pictures per second. He kept precise measurements ranging from stride lengths, stance times, limb segment velocities, center of gravity deviations, and step lengths. Seder wanted to know how a horse interfaces with the track and what happens to its gait as it goes faster. He sought out the best minds at the best medical, engineering, and biomechanics universities and collected his data and built his models to the most rigorous academic standards as well as contributed to scientific veterinary journals.
EQB was not just about collecting wall-to-wall data but putting it into the proper context and interpreting it precisely. Much has been made, for example, of the large heart the great Secretariat possessed. The legend goes that Dr. Thomas Swerczek, head pathologist at the University of Kentucky, estimated it at twenty-two pounds or nearly twice the normal size found in racehorses. Seder was less interested in the size of the heart. His data included 2-D echo ultrasound scans of many heart variables and digitized slow motion videos of racing speed workouts of real racehorses at major racetracks around the world. His database took decades to build and covered more than 50,000 horses and every detail of every race they ran.
“So the heart measurement has to be looked at tightly in the context of a huge database so you only compare it to other horses of the same sex who are also similar within thirty days of chronological age and within a tight weight and height comparison as well,” Seder said.
It was Miller, however, who brought two attributes that Seder needed help with: horsemanship and a human touch. She grew up around horses, riding pony races and fox hunting throughout the Mid-Atlantic region, graduating to steeplechase racing and eventually becoming one of the nation’s first professional female jockeys. She learned the racetrack in prominent barns on both the East and West Coast before starting her own public stable and becoming a leading trainer at Delaware Park. While Seder started with measurements and spreadsheets, Miller could recognize a runner with her eyes and hands. She also was more plainspoken and patient with EQB’s clients and delivered their assessments with a gentler touch.
In short, they complemented each other, and in Zayat they had a client who believed in their system. There’s a Middle Eastern proverb that says the horse created by a committee is a camel and with EQB on the payroll and in charge of selecting breeding stock as well as sales horses, Zayat Stables was finding itself in the winner’s circle of Grade 1 races and in the stallion barns of top breeding farms with horses like Eskendereya and Pioneerof the Nile.
Like Seder, Miller thought the Littleprincessemma colt was hands down the best-looking prospect among the 150 horses on the sales grounds. She knew the colt’s pedigree well, as she and Seder had picked out Littleprincessemma. Miller, too, was awed by his physical aura. Hip No. 85 earned the high marks on her physical checklist of physical attributes from walk to balance, intelligence to conformation. Miller agreed with Seder as well that the colt’s cardiovascular scans were “literally as good as it gets.” She was not concerned by the blemish on the colt’s ankle, but she knew it was dropping the price on the colt.
“It was something you might get if you got a little paper cut, or a scratch from a rose or something,” she said.
Miller called Zayat on the eve of the sale and told him how impressed she was with his homebred. She told him that she had seen horses fall out of favor at sales before and it usually turned out for the best. In 2004, at the Mid-Atlantic two-year-old-in-training sale, a well-bred and well-put-together colt had an allergic reaction to the ointment that the sales company put on a small cut, prompting his ankle to swell up to the size of a cantaloupe. His price fell to $75,000 and a group of Philadelphia businessmen new to the trade snatched him up. The following year the colt, named Afleet Alex, went on to win eight of his twelve races, including the Preakness and Belmont Stakes, and earned more than $2.7 million.
“This is the kind of horse we try to buy, so why are we selling it?” she asked him.
Seder urged him to hang on to the Littleprincessemma colt.
“Sell your house; don’t sell this horse,” he told him. “This is your get-out horse.”
On Tuesday, the last of the two-day sale, Hip No. 85 was led into the sales ring looking as regal as the tuxedoed groom at the end of his shank. He stood still with ears pricked high and head turned as if he were posing for a sculptor. He circled once, twice as the auctioneers sang in the singsong melody of money to a crowd that wasn’t listening—or at least bidding. They couldn’t get past Hip No. 85’s flawed ankle or Pioneerof the Nile’s lack of credentials. Zayat listened on his phone from Disneyland, where he was on a trip with his family. There were some ringers—or plants—who signaled interest solely to get the bidding started, but there was no one out there who really wanted the colt. It didn’t take long for the auctioneer’s cadence to lose steam, much like a bag of microwave popcorn loses its pop when the kernels are cooked. Zayat told another sales agent to buy back the colt at $300,000, far below what he had hoped for.
By the end of the evening, a total of 137 horses would bring in more than $31.8 million to the Saratoga Sale. The sales topper was a Dynaformer filly that fetched more than $1.2 million. The Littleprincessemma colt remained with Zayat. Seder and Miller could not have been happier.
CHAPTER FOUR
GET HIM OUT OF HERE
March 23, 2014
The McKathan brothers knew their horses. They might as well have been foaled themselves in a stall, seeing how they spent the bett
er part of their lives with runners in their backyards. Their father, J.B., or Luke trained quarter horses at the long-gone Seminole Downs in Central Florida before deciding to chase bigger purses at racetracks from Florida to California. A quarter horse was an American breed that excelled at sprinting short distances, usually in races of a quarter mile or less. He eventually switched to Thoroughbreds and did all right on the grits-and-hard-toast tracks of West Virginia and later Tampa Bay Downs. Luke McKathan eventually returned to Florida and became a pinhooker, buying horses as weanlings or yearlings, raising and training them himself, then selling them at auction or privately long before they hit the racetrack. More often than not, he did this at a profit. If horses were automobiles, Luke McKathan had earned the reputation as an ace mechanic who could take apart and put back together a fast machine in the course of a weekend. No one was surprised that his sons, J.B. Jr. and Kevin, ended their formal education after high school to go into the family business. They had already been home-schooled by a master in the only subject they truly cared about. They had learned their lessons well enough to strike out on their own in their mid-twenties, owning and operating a 200-acre training, boarding, and breaking center in Citra, Florida, near Ocala.
While Central Kentucky had its bluegrass and history dating back to before the Revolutionary War, Central Florida was an upstart Thoroughbred incubator, the vision of a post–World War II highway builder named Carl Rose. He believed horses would thrive in the region’s eternal sunshine and would build strong bones from eating the calcium- and phosphorus-enriched grass and water that seeped through the more than 70,000 acres of lush farmland. In 1957, Needles became the first Florida-bred horse to win the Kentucky Derby. Twenty-one years later, in 1978, another colt by the name of Affirmed, born and bred on Harbor View Farm, swept America’s three classic races to become the eleventh Triple Crown champ. The wait has been on for another one ever since.