🐎 It Cost $800K To Lose the Kentucky Derby

It’s Kentucky Derby weekend, which got me thinking: Why has it always been legal to bet at the race track but not anywhere else?

Well, it’s because of a loophole that still gets exploited to this day with real-money daily fantasy games: You’re not betting against the “house,” you’re betting against everyone else at the track.

Also, my two favorite Kentucky Derby charts are at the end:

🗞 The Big Story: Nintendo Saved the Seattle Mariners

📉 Biggest Loser: It Cost $800K To Lose the Kentucky Derby

🏆 Winner’s Circle: The Kentucky Derby’s Trophy is Incredible

🗞 The Big Story

How did Nintendo save the Seattle Mariners from being relocated, and why did they do it as a personal favor?

Shout out to @aaronitmar on TikTok for turning me onto this story. It might be one of my favorite hidden gems of the year.

Floundering Team: After entering the league in 1977, the Mariners averaged fewer than 7,000 fans per game.

In 1991, the team’s debts were growing so much that owner Jeff Smulyan began secret talks with the league about moving the team to Tampa Bay, but first, he decided to try to sell the team instead.

As per the stadium lease, he first had to offer it to local buyers, but the team would move to Florida if no parties were interested.

This caused a new organization called The Baseball Club of Seattle to form, which was set up by local business owners. However, none of them had the money to actually buy the team.

The Savior: So, they started reaching out to every rich person they could think of to see if they might be interested in contributing the majority share. But after being turned down by Bill Gates, Senator Slade Gorton stepped in and made a call on his favorite team’s behalf.

See, Gorton had gotten to know executives at Nintendo over the years as they had picked Washington State as their entry point into the American market.

So he called and asked if any of their American executives might be interested in helping keep the team in Seattle, but a few days before Christmas in 1991, he received a call that changed everything.

See, it wasn’t the American executives at Nintendo who were interested in buying the team; instead, it was Nintendo's owner, Hiroshi Yamauchi.

Evidently, Yamauchi was interested in joining the Baseball Club of Seattle and buying a majority stake in the team to thank the community for helping Nintendo find its footing in America.

Yamauchi said, “We believe we owe something to the community. If you need $100 million to buy a baseball team, you’ve got $100 million.”

However, the Baseball Club of Seattle would actually need $125 million to buy the team, $75 million of which was to be contributed by Yamauchi, with the other $50 million being put forward by other Seattle businesses.

This would give Yamauchi a 60% share in the team; there was just one problem.

MLB Steps In: In the early 90s, MLB was completely against the idea of foreign ownership of one of its teams, especially Japanese ownership.

Since Japan’s economy was doing so well, other MLB owners were worried that Yamauchi would start throwing endless money at free agents and cause the league’s average salaries to skyrocket.

Commissioner Fay Vincent even called the possibility of Yamauchi being an owner “unlikely.”

But then Vincent got an equally unlikely call.

See, Senator Gorton was good friends with George W. Bush, the then-owner of the Texas Rangers, whose dad just so happened to be the President of the United States.

So he got George H.W. Bush to call MLB and convince them to let Yamauchi help buy the team.

The MLB agreed but under one condition: Yamauchi limited his voting interest to 49%. He could still own 60% of the team but couldn’t make any final decisions.

Funny enough, for Yamauchi, that didn’t even matter because he was genuinely buying the team as a favor for the city of Seattle.

Silent Partner: In fact, during his 21 years of owning the team, he never attended a single game, not even when the Mariners traveled to Tokyo. He never even visited Seattle once while owning the team.

He did, however, leverage the team for Nintendo’s benefit, which saw the company publish four games starring Ken Griffey Jr. and even introduce a limited-edition Mariners DS Lite where fans could:

• Order food and drinks to their seats

• Check player stats and scores

• Stream Mariners’ games

Yamauchi died in 2013; in 2016, Nintendo sold all but 10% of its shares in the club.

And even though he bought the team as a favor, his original $75 million investment would be worth over $1.3 billion today.

I wonder if Bill Gates is kicking himself…

📉 Biggest Loser

It costs over $800,000 to enter a horse in the Kentucky Derby, but it might be the best deal in all of sports.

Let’s break it down.

Step 1 - The Horse: You’re not allowed to race just any horse at Churchill Downs; it has to be a three-year-old thoroughbred, which costs an average of $446,000 at auction.

Then, you would have to spend around $150,000 per year to feed, transport, and care for the horse.

Step 2 - Qualify & Register: Next, to qualify for the Kentucky Derby, you’ll have to enter any number of prep races, and entry fees and transportation for those costs an average of $175,000.

Luckily, you can make some money back by winning these smaller races, but it’s nothing compared to what the Kentucky Derby is paying this year.

But before you can even think that, there’s a nomination fee to get your horse into the Kentucky Derby.

• $600 - Early Registration

• $6,000 - Register Before April 1

• $200,000 - Register After April 1

Then there’s a $25,000 fee to officially enter the race and an additional $25,000 you’ll have to pay to get to the starting gate.

On the low end, that’s $50,600 just to get on the track, and we haven’t even talked about the jockey yet.

Step 3 - Jockey: Luckily, their fee is only $500, but they also get a 10% split of the total winnings.

This means you've already spent $822,000 just to qualify and prepare a horse for one race.

So what’s the upside?

Step 4 - Win: This year’s Kentucky Derby has a record prize pool of $5 million, up 67% from last year.

• Winner: $3.1M

• Second Place: $1M

• Third Place: $500,000

• Fourth Place: $250,000

• Fifth Place: $150,000

Of course, you don’t get to keep all that because, typically, the jockey and trainer each get 10%, which is equal to $310,000 each this year.

That leaves the owner with a little over $2.4M in total winnings, for a net profit of around $1.6 million from just one race.

And given the fact that you can win all this money in just two minutes, it might make racing a horse in the Kentucky Derby the best deal in sports.

🏆 Winner’s Circle

The Kentucky Derby trophy costs over $100,000 to make, but it’s not actually all that valuable.

The First (Known) Trophy: Churchill Downs has presented the winner with a solid gold trophy every year since the 50th running of the Kentucky Derby in 1924.

The trophy was originally made by a local Louisville jeweler until 1999; during that time, it only underwent one design change.

That’s because the original design featured a downwards-facing horseshoe, which, in racing, means that your luck will run out.

So, in 1999, to commemorate the 125th Kentucky Derby (and correct this superstition), the 14-karat gold horseshoe was rotated 180 degrees.

Trophy Specs: Before this year, the trophy stood just 22 inches tall and weighed a little over four pounds, excluding its jade base.

Like every year, it’s made of solid 14-karat yellow and green gold. The top features an 18-karat gold horse and rider, the only part of the trophy not made by hand.

In fact, construction must begin at least six months in advance to complete the trophy by April every year.

The trophy takes around 2,000 hours of labor to complete in Smithfield, Rhode Island, where 29 hand-stamped and spun pieces are assembled.

Trophy Upgrade: The raw materials of last year’s trophy were estimated to be worth over $100,000, but this year, to honor the 150th running of the Kentucky Derby, the trophy received a major upgrade, which includes the addition of:

• 234 rubies

• 132 emeralds

• 20 diamonds

So how is it possible that this trophy isn’t valuable?

What is Rare: The Kentucky Derby trophy is actually the only solid gold trophy in American sports that is handed out annually.

This means that, unlike the Stanley Cup or Lombardi Trophy, another official Kentucky Derby trophy is made every year.

And it’s not even the only trophy that gets awarded since smaller silver replicas are made for the trainer and the jockey of the winning horse, and those are only expected to be worth around $5,000.

The last time a Gold Kentucky Derby Trophy hit the open market was in 2015 when the 1985 Trophy was sold for $187,521, less than double the price of its literal weight in gold (estimated $128,706 today).

And the reason for that is simply because, most years, these trophies aren’t all that rare.

However, the same can’t be said for this year’s 150th-anniversary trophy, which not only cost more to make but would likely fetch millions if it ever went to auction since it will be won on an anniversary year.

But look at this thing; that’s never going to happen.

📊 Charts of the Week

Racehorse retirement is second to none, especially if you have had a successful career. The most successful sires can command hundreds of thousands in stud fees, breeding thousands of foals.

But even “average” racehorses can make it big in retirement:

However, this path isn’t easy. In fact, the odds of a thoroughbred horse racing in the Kentucky Derby are about the same as a high school football player making it to the NFL:

I got all of these charts exclusively from Riley over at SportsBall. They don’t pay me to include these.

I genuinely love their work and encourage you to subscribe for more!

⏱ In Other News

• The (Unexpected) History of NBA Commissioner Adam Silver

• A Noncompete Ban Could Change Coaching Forever

• Super Bowl Ad Prices Just Went Up (Again)

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👋 I regret to inform you that my high school baseball update isn’t great. Between rainouts and bipolar performances, we have yet to get over the hump this year.

We’re the definition of a hot and cold team that crushes bad teams and gets crushed by good teams.

I thought we had shaken this pattern on Wednesday night when we got to play at the University of Minnesota’s Seibert Field. We were down 6-1 early and rallied back in the bottom of the 6th inning to make it a 9-8 game (we were still losing).

All we had to do was get out of the top of the 7th with minimal damage, as we had the heart of our line-up (2,3,4) coming to the plate in the bottom of the inning.

Instead, we had a pitcher attempt a pick-off move he’s never tried before with a runner on second, and then our catcher forgot he had to throw out the runner at first on a drop third strike.

They scored seven runs that inning, and we couldn’t recover.

A bonus stat for you: the combined batting average for hitters 5-9 in our line-up this year is 0.050.

Oh well, there are more games left to play.