Barry Irwin sometimes used to make the business of syndicating thoroughbreds look easy. He and a partner would spot a racehorse with the potential to improve, buy the animal, sell shares to investors. They often won stakes races this way, and almost won the Kentucky Derby and the Preakness.
The game was spoiled when too many people got into it. Sheikhs and tycoons started looking for the same types of horses that Irwin was seeking, and they were driving up the prices. Irwin had to find more creative ways to obtain racing prospects for the syndicates formed by his company, Team Valor International. One example: He bought a 4-year-old filly at an auction in Germany, brought her to the United States, where she flopped as a racehorse, bred her to an unfashionable stallion, syndicated the foal — and won the Kentucky Derby.
The Post Sports Live crew looks forward to the Preakness and debates what is more exciting - the actual horse race or the Kegasus-inspired infield party.
That is the story of Animal Kingdom, who will try to win the second leg of the Triple Crown on Saturday at Pimlico. The Derby was not only a triumph for Irwin but for the concept of syndicating racehorses that he has championed since the 1980s. Twenty investors shared the rare joy of winning America’s greatest horse race.
Irwin, formerly a writer for the Daily Racing Form, started this venture with press-box colleague Jeff Siegel — once of the country’s sharpest handicappers —with the idea of “trying to find horses with hidden form that we could improve.”
They bought Captain Bodgit on the basis of some promising speed figures, and in 1997 he finished second in the Derby and third in the Preakness. They bought Martial Law, a colt who had been performing poorly at minor tracks in England because his pedigree suggested he would be much more effective on dirt than on grass. When they brought him to the United States and put him on dirt, Irwin recalled, “we knew we had hit the mother lode.” Martial Law won the $1 million Santa Anita Handicap at odds of 50 to 1.
But after a multitude of agents started trying to buy promising racehorses, paying sky-high prices for horses such as Captain Bodgit, Irwin reinvented his business. He bought out his partner. He concluded that breeding horses might be a better gamble than buying racehorses. And he decided that other countries offered better buying opportunities than the United States.
His business works this way: If Irwin buys a horse for $100,000, he marks up the price, typically around 30 percent. He sends information about the horse to his roster of clients and invites them to take a percentage of the $130,000 sale price. People who join the syndicate get billed for their prorated share of training expenses, typically $50,000 a year per horse. The company receives a 10 percent share of any net profits as well as a 5 percent commission when a horse is sold.
The vast majority of racehorses in the United States lose money, and the arithmetic of horse ownership is even more daunting when the owner has to pay extra fees and markups to a manager. But Irwin’s approach to the business allows his clients to make horse investments that they could never undertake on their own.