With Gale Brophy, President of GSB Racing
Steve spoke with Gale Brophy, co-owner of the winner of the 1991 Kentucky Derby Winner, Strike the Gold. Gale is the president of GSB Racing, a winner of the New York Breeders Award, and has been involved in owning many Stakes winners.
The Kentucky Derby is also called “The Run for the Roses,” you may have heard that. It’s also called “The Most Exciting Two Minutes in Sports.” It’s a one-and-a-quarter-mile race for three-year-old thoroughbred horses which draws an average of 150 thousand visitors each year, including residents, out-of-towners, celebrities, Presidents, and even members of royal families.
The Agony Of Defeat And The Thrill Of Victory
Gale thought for sure that she had the horse—36 Red—that would win the 1990 Kentucky Derby. She was so sure that she invited over a hundred guests to join her to celebrate at the Derby that year. It was a sad and sobering moment when 36 Red failed to come through. She was also supremely confident of winning the Derby the following year with Strike the Gold, so much so that she turned down many offers to buy the horse prior to the race. However humbled by her experience the previous year, she only invited a couple of friends to the 1991 Kentucky Derby. It was an exciting race, as Strike the Gold performed as it always had, as a “come from behind” horse. He was so far back early on that he wasn’t even visible on the TV shot of the leaders. But with Chris Antley as the jockey, Strike the Gold caught the leaders and pulled ahead in the last leg of the race to win by less than two lengths. It was, of course, the opposite experience of the year before, with sadness and disappointment replaced by joy and celebration.
The Changing Business Of Horse Breeding
The business of horse breeding, which Gale has been involved in for more than two decades, has changed in recent years. Buyers and investors in horses are looking more for perfection, for instant gratification, more of a sure thing. The market has shifted somewhat from people buying yearlings to buying two-year-olds that they can actually see racing at the track. Their thinking is why take a risk on a yearling that might not even make it to the race track. So, they’re looking to hedge their bets a bit more by buying older, more proven horses.
Raising a horse to race is an expensive undertaking. Figuring in the cost of a trainer, just the daily expenses can easily run over a hundred dollars a day. And the really big money—like tens of millions of dollars big money—only comes in if you have a horse that wins a major race like the Derby or the Preakness. When that happens, the horse is usually retired to stud because that’s where you really make the money. And that’s why you don’t see Kentucky Derby winners coming back and racing as four-year-olds; it’s more profitable to put them out to stud.
The Sport Of Horse Racing
Horse racing as a spectator sport has fallen off a bit in recent years, to the point where a lot of tracks are having trouble staying financially viable. However, there is still plenty of interest in the three legs of the Triple Crown: the Kentucky Derby, the Preakness, and the Belmont Stakes. And horse racing will likely continue to be a thriving business overall because there are still people making large sums of money. Plus, it’s still “the sport of kings,” with royalty from Arab sheiks to Queen Elizabeth owning and racing horses.
How The Average Person Can Invest In A Race Horse
The best advice for the average person with some money to spend wanting to get involved with horse racing is, first of all, only do it if it’s your passion. In other words, only do it if you’re going to enjoy the experience, not just hoping to own a Kentucky Derby winner because the odds on that are very long. Also, hedge your bet by investing in more than one horse. The easiest way for the average person to get involved is by buying in with a group of other investors. Through an organization called Fasig Tipton, people can buy into ownership of four horses with just a one-time fee of $7500. If one of the horses gets injured, they bring in another horse to replace it. And if one of the horses proves to be a genuine money winner, then the winnings are divided among the investors. So that’s a good way to get involved in the sport of horse racing without investing a life savings on just one horse that might or might not one day win “The Run for the Roses.”
You can learn more about Gale Brophy at https://estatesbybrophy.com/gale-s-brophy-biography/. You can also watch Strike the Gold’s exciting Kentucky Derby win on YouTube.
Disclosure: The opinions expressed are those of the interviewee and not necessarily United Capital. Interviewee is not a representative of United Capital. Investing involves risk and investors should carefully consider their own investment objectives and never rely on any single chart, graph or marketing piece to make decisions. Content provided is intended for informational purposes only, is not a recommendation to buy or sell any securities, and should not be considered tax, legal, investment advice. Please contact your tax, legal, financial professional with questions about your specific needs and circumstances. The information contained herein was obtained from sources believed to be reliable, however their accuracy and completeness cannot be guaranteed. All data are driven from publicly available information and has not been independently verified by United Capital.
Steve Pomeranz: With the running of the Kentucky Derby last week, it reminded me to break out one of my favorite interviews. This was an interview that took place two years ago around this time with an owner of a horse that won the Kentucky Derby. This is one of my favorite interviews. Actually, one of the most moving interviews I think I’ve done, and also there are references to the website. Definitely go to the website and watch the video of that horse’s win. Anyway, stay tuned, because here we go with Gale Brophy, the owner of the Kentucky Derby winner.
The Kentucky Derby is also called “The Run for the Roses,” you may have heard that. It’s also called The Most Exciting Two Minutes in Sports. It’s a one-and-a-quarter-mile race for three-year-old thoroughbred horses, and it draws an average of 150 thousand visitors each year, including residents, out-of-towners, celebrities, presidents, and even members of the royal families. The first Kentucky Derby Race occurred in 1875 and close to 10 thousand people watched as 15 thoroughbred horses ran what was then a one-and-a-half-mile course
In 1876, the length of the race was changed to one-and-a-quarter-miles, and by the early 1900s, owners of winning Kentucky Derby horses started sending their winners to run in the Preakness Stakes in Maryland and the Belmont Stakes in New York. In 1930, sportswriter Charles Hatton coined the term Triple Crown in reference to the same horses running in three races consecutively.
I was fortunate to meet my guest, Gale Brophy. She’s the co-owner of the 1991 Kentucky Derby winner Strike the Gold. Gale is a resident of Palm Beach and is president of GSB racing. And she’s also run the New York Breeders Award and has been involved in owning many other Stakes winners. Welcome to the show, Gale.
Gale Brophy: Steve, thank you so much for having me. I greatly appreciate it.
Steve Pomeranz: You know, I went to your website, GSB racing.com, and on it you have a video of the Kentucky Derby win. And I have to tell you, it brought chills to my spine. I recommend anybody watch that video because, basically, Strike the Gold came from the back of the field to win the race. So looking back, tell us about getting to Derby and what it felt like to win, that was in 1991.
Gale Brophy: Well, for the listeners. I had 36 Red who took me to the Derby the year before and we were very excited about him. He won the Wood Memorial, the Gotham, Florida Derby. And we thought we had the winning Kentucky Derby horse and invited about a hundred people to come with us to Louisville for the Kentucky Derby.
Steve Pomeranz: You had a great horse. You ran the Kentucky Derby.
Gale Brophy: Positive we were going to win, which we didn’t care about a 20-horse field, we were going to win. And it was like death when we didn’t. It was a solemn moment in life. And still with a good horse. And then the next year, my husband and I had Strike the Gold, with Katrin and [inaudible 00:02:53], and MC Hammer was trying to buy the horse. And kept offering money, and I was like you’re not buying this horse. This horse is going to win the Kentucky Derby.
But sure enough, we went and we didn’t invite anybody. We invited a couple people so they didn’t have to go through the burial again. And so horse is starting to race, and it’s a closing horse.
Steve Pomeranz: What does that mean when you say closing?
Gale Brophy: He lets the speed get out there first, and he doesn’t go wire to wire. And he’ll make up the time. And I think when we won, I think we were about five horses and he wasn’t even on the television screens.
Steve Pomeranz: I know I was watching the video. And he wasn’t in play until really the last leg or whatever. And there he comes up on the side. He pulls ahead by a length. It was amazing.
Gale Brophy: Yeah. And whoever watches the video, it’s on YouTube or on my website. But you’ll see I am screaming because Nick Zita was our trainer, Chris Antley was the jockey.
Steve Pomeranz: Everybody was crying.
Gale Brophy: Crying. It was just, we’re crying, we’re thanking God.
Steve Pomeranz: It was wonderful. So how long have you been in the field of horseracing.
Gale Brophy: I’ve been in horses for about 20 some odd years, since a little girl.
Steve Pomeranz: Really?
Gale Brophy: I’ve ridden my whole life, I’ve played polo, I’ve show jumped, I’ve owned horse farms down here in Florida. I used to own Runaway Sell in Wellington in a quarantined facility, and upstate New York in the Catskills, I’m very actively involved with the New York breeding program.
Steve Pomeranz: Is that where the GSB farm is?
Gale Brophy: Yes.
Steve Pomeranz: Gale S Brophy is, by the way, GSB. So you still own that, it’s still active?
Gale Brophy: Yes, it’s still active.
Steve Pomeranz: So tell me what it’s like to own a breeding farm like that. What’s the business like?
Gale Brophy: Well, the business, it used to be an extremely, as a breeder, a profitable business. And unfortunately, with the times, markets have changed now, and people are looking for more perfection more instant gratification. So as a breeder, the market has slided. But as a seller in the two-year-old and training sales, I’m seeing more activity there because people are seeing these are two-year-olds that are at the track that can race. So why take a risk more on the yearling that might not even make it to the race track.
Steve Pomeranz: It’s too early, and so they’re buying the older horses.
Gale Brophy: More proven.
Steve Pomeranz: More proven horses. Yeah, kind of hedge their bets.
Gale Brophy: Right.
Steve Pomeranz: Is racing, you know you’ve been in it for so many years, and especially so active in the 80s and 90s, how would you say it’s changed in terms of as a sport, as a spectator sport? Does it have a large backing, a large following still?
Gale Brophy: It’s kind of sad because actually, it’s fallen off a lot. And the race tracks are having a hard time. And that part of it’s sad. Of course, the triple crown is the finest in the world.
Steve Pomeranz: It’s always exciting.
Gale Brophy: It’s the finest in the world. I mean, you have everyone through Sheikh Mohammed Al Maktoum, the ruler of Dubai. You have everyone in the world trying to compete to win this coveted trophy. So it is perceived still as our Superbowl of the thoroughbred industry.
Steve Pomeranz: Is it, basically, the sport of kings still?
Gale Brophy: It is a sport of kings.
Steve Pomeranz: If the average person with a few bucks in his pocket wants to get into racing, what’s the playing field like these days and what’s the advice you might give someone.
Gale Brophy: I always believe it’s always better to hedge your bet. So rather than buy one horse and then this horse gets hurt, you lose your investment. And also, you don’t look at horses for an investment, you look at horses because it’s your passion. You don’t go out to play golf on the golf course because you’re going to make money. You do it because you enjoy doing it.
Gale Brophy: And that’s why they say horses are the sport of kings because you have to be able to afford to have a disposable income.
Steve Pomeranz: Well, sure, the cost of just daily care.
Gale Brophy: It’s astronomical. It could start anywhere from 60 to 120 depending on the trainer you pick a day.
Steve Pomeranz: I was down at Gulf Stream park attending an event, the Haven, a charity down here. And it was really quite exciting. Actually, Gulf Stream has changed a lot; they put a lot of shopping in there.
Gale Brophy: Gulf Stream is beautiful. Beautiful.
Steve Pomeranz: And they parade the horses around. They’re making a spectacle. By the way, it’s a great place to bring your kids.
Gale Brophy: Absolutely.
Steve Pomeranz: Because you get to see the horses up close and they parade them around. It’s really exciting.
Gale Brophy: Absolutely. Saratoga’s like that too.
Steve Pomeranz: Yeah? I’ve never been there.
Gale Brophy: Oh, it’s spectacular. Gulf Stream is modern and new, but they’ve done a tremendous job with Gulf Stream.
Steve Pomeranz: If you just joined us, you’re listening to On the Money. My name is Steve Pomeranz, and we’re re-airing a segment that I did two years ago running of the Kentucky Derby. This is with a past winner of the Kentucky Derby, the interview continues.
Well, now what about the Kentucky Derby, is the business up in Kentucky, is that a thriving business still or is that a difficult business these days?
Gale Brophy: It’ll always be a thriving business because there are always still people making a large sum of money. Wall Street’s still doing well right now. And you have to remember, the kings, Queen Elizabeth, she races. They haven’t won the Derby yet. So there’s people that are just competing to win the Derby, win a triple crown. It hasn’t been done in years.
Steve Pomeranz: My guest is Gale S Brophy. She is the co-owner of the 1991 Kentucky Derby winner Strike the Gold. And she’s owned many horses that have won many stakes. And she’s also won the New York Breeders Award among other things.
After Strike the Gold won, what was life like after that in terms of the horse itself, and I guess the next step is to put it out to stud, is that correct?
Gale Brophy: Yes.
Steve Pomeranz: Well, so what are the processes, but just tell me, let us share in your experience a little bit about having a winner for the Kentucky Derby.
Gale Brophy: Okay. Well, there is a two-step process, actually. A lot of people sometimes after winning the Derby or the Preakness and the Belmont will retire the horse because the value of the horse changes drastically.
Steve Pomeranz: It’s at its peak, I guess.
Gale Brophy: It’s at its peak of stud fees. Stud fees are based on if it’s an extremely well-bred horse, and it has won a tremendous amount, like Cigar, who won a tremendous amount of races, and Cigar, I think, I think was syndicated out at 16 million dollars.
And where they base their value number is a horse breeds about 100 times a season if they do southern hemisphere, which means they ship them down to South Africa and breed them again. They get 200 seasons out of this horse. But if they just do the United States, which is one breeding season, if you do it at 10 thousand times 100 or if you still put the stud fee at 100 thousand dollars times 100.
So that’s where the big payoff is. And that’s why you don’t see horses really still racing at six years old because if they’re good, they’re out at stud, that’s more money.
Steve Pomeranz: How much does training actually account for a championship horse? It seems to me a lot of it is perhaps genetics and kind of the luck of the draw you find a horse that’s very talented or something like that. But how much does training actually matter?
Gale Brophy: Yes, there’s the luck of the draw. But there’s so many factors that go in. And you really need to have a trained person that can look, evaluate a horse, look at the pedigree, evaluate a pedigree. A pedigree is made up for speed or maybe a sprint. So you’re really looking at the pedigree.
Then you’re looking at the legs. If you have one horse, it toes out a little, or if they toe in. That’s like a child that’s walking pigeon-toed, and they’re going to stumble over themselves.
Steve Pomeranz: So you have to have a lot of experience to be able to recognize that.
Gale Brophy: You really do.
Steve Pomeranz: But I would imagine any seasoned trainer is going to see all of those features.
Gale Brophy: Absolutely. But you have to be very careful in who you pick. Like in every industry, as we’ve seen in banking and everything, there’s good and there’s bad.
Steve Pomeranz: Right.
Gale Brophy: And my advice is, go with the winning teams, hedge yourself out, get a lot of people involved. Right now, Fasig Tipton is having a wonderful program where they’ll have people for 75 hundred dollars. They join a club. It’s like you go out and you pay your dues for a golf membership of the year. Well, they give you four horses.
Steve Pomeranz: So for 75-hundred-dollars, now what is the name of this group?
Gale Brophy: Fasig Tipton.
Steve Pomeranz: Fasig Tipton.
Gale Brophy: Fasig Tipton would be equivalent to Sothebys or Christies in the sales arena, okay?
Steve Pomeranz: So for 75 hundred, you could be part of a group and own four horses you said?
Gale Brophy: Yes. It’s owned by Sheikh Mohammed Al bin Maktoum of Dubai. And what they do is they bring together a group. You just pay one expense; you never have to retire the horse if the horse doesn’t do well. And it’s a one year fee. And they have four horses. And if one of those horses gets hurt, they bring another horse to replace it. If the horse wins, those winnings get divided amongst the people that put in.
Steve Pomeranz: So you get to participate in the sport of kings for a relatively modest amount.
Gale Brophy: You get to live the life of the sport of kings.
Steve Pomeranz: That’s exciting.
Gale Brophy: And they have it set up like a concierge service, so if you want to go to Gulf Stream for the day or if you want to go to the Kentucky Derby at Louisville, if you want to go to Saratoga, you call them and they arrange the boxes and where you sit. So I think it’s a brilliant idea because when you race and own a horse privately yourself, and as I said you need a tremendous amount of money to do this. If the horse doesn’t do well, you have a horse and you have to be responsible for taking care of it and feeding it and housing it.
If the horse gets hurt, then you’re not racing and you’ve lost that racing season. Where when people come together as a group and funny side, they had, I think, 100 owners. But it was great. They all had a lot of fun, and that’s what racing needs to go back to.
Steve Pomeranz: Yeah, I see.
Gale Brophy: The fun.
Steve Pomeranz: Yeah, exactly. So are you, you’re not going to the Derby this year again.
Gale Brophy: I don’t go unless I have a horse racing. I’m a snob. I’m an absolute snob. I want the police escort.
Steve Pomeranz: Yeah, but wouldn’t you be treated like a queen if you went because you’re a former winner?
Gale Brophy: Oh, yeah, absolutely. And it’s a blast, but it’s just so much better. I’ve had four horses go Derby, and the day of the Kentucky Derby when I won, I had also 36 Red win the Churchill Downs.
Steve Pomeranz: On the same day.
Gale Brophy: On the same day.
Steve Pomeranz: Wow.
Gale Brophy: I went up and down twice to get trophies out of nine races. It was fabulous. It’s timeless. It’s just absolutely wonderful.
Steve Pomeranz: Well, unfortunately, we’re going to have to stop here, but my guest Gale Brophy, if you want to find out more, I really recommend that you go to this website, it’s gsbracing.com, watch the video, get to know a little bit more about Gale. You can also google Gale which is GALE S Brophy and find out a little more about her. But also, go to the site gsbracing.com. You can find out more about Forum at the Foothills of the Catskills near Hancock, New York. Thank you so much, Gale.
Gale Brophy: Steve, it was a great pleasure. And also, if they want to find out about getting involved Fasig Tipton.
Steve Pomeranz: Okay. How do you spell that? Do you have any idea?
Gale Brophy: Fasig Tipton. Oh, God, they’re going hate me.
Steve Pomeranz: Fasig is an f or a ph?
Gale Brophy: It’s FASIG TIPTON
Steve Pomeranz: Okay.
Gale Brophy: And Dan Pride is who you ask for. Tell them I said so.
Steve Pomeranz: I will. Thanks.
Gale Brophy: Thank you, Steve.