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SEPTEMBER 29, 2008

Horse Racing 101: Economics, Inflation and Curlin

by Vance Hanson

With his second consecutive victory in the Jockey Club Gold Cup (G1), reigning Horse of the Year CURLIN (Smart Strike) has become North America's all-time leading money winner and the first to surpass $10 million in earnings. While this achievement is not overly surprising given the preponderance of multi-million dollar stakes across the globe, it is a noteworthy accomplishment given the relatively short careers of the modern Thoroughbred. It's to the credit of both Curlin and his connections that he has maintained a standard of excellence and health to have been in a position to accomplish such a milestone.

While we etch Curlin's name in the history books, let's pause briefly to put the relevance of this record in context. Most everyone associated with the sport would agree that being the all-time leading money earner does not necessarily make Curlin the best American-based Thoroughbred of all time, though he is certainly one of the more effective in recent years. The same can be said of the previous holders of the title over the past nine decades. Durability, a premium in the life of every racehorse, has been a key factor in the success of Curlin and those that preceded him as leading money winner. Favorable economic conditions have also played a significant role, so much in fact that Curlin's claim to the honor he now possesses begins to get hazy.

Having the foresight to think Curlin might surpass Cigar's career earnings record this season, I undertook a little research earlier this year to determine what the career earnings of previous holders of the title would have been in today's dollars. Since we are generally more familiar with the value of the dollar as it presently stands, adjusting these records for inflation gives us a better perspective of the monetary achievements of the champions of yesteryear. Perhaps the sport's record keepers would be well served by annually indexing the earnings of leading money winners for it to remain a relevant statistic.

The tool I used was the Federal Reserve's inflation calculator, which uses the Consumer Price Index to determine the purchasing power of the dollar over time (see disclaimer below). For as accurate a figure as possible, I calculated the year-end earnings of each horse for every season it competed in. This was done solely because some of the former title holders might have competed in times of both high and low inflation.

It has been several months since these calculations were made, but any changes since then have surely been nominal (no pun intended). Beginning with Man o' War, here are the adjusted career earnings of the leading money winners since 1920:

Man o' War






Gallant Fox



Sun Beau
























Round Table









Spectacular Bid  


John Henry









Having raced in an era when purses of $1 million or more became, or were, more commonplace, it's no surprise that three of the top five former money leaders (John Henry, Alysheba and Cigar) are still among the leading earners of all time when their purse winnings are adjusted for inflation. Note, however, that the monetary achievements of Round Table and Kelso, who competed in an era when the gross purse of most major races was less than $150,000, compare quite favorably with their successors.

As stated earlier, possession of the money title does not imply that a certain horse should be considered the best of all time. One who would top some people's list on sheer talent, Man o' War, only earned the equivalent of $2.8 million in his 21-race career. Virtual nobodies can and do make that much or more in a single season today. But a simple statistic does not say everything that needs to be said. It's no secret that Man o' War's earning power is skewed lower because he competed in an era when pari-mutuel wagering in New York, where he made all but three of his starts, was non-existent, thus purse money derived from revenue on betting was very low or negligible.

One horse historically ill-served by the decline in the value of the dollar is Affirmed, Triple Crown winner of 1978 and dual Horse of the Year. He was the first horse to go over $2 million in career earnings, but his adjusted earnings are only slightly more than half than those of Kelso, the horse whose record he surpassed. Kelso certainly enjoyed a much a longer career (63 starts compared to Affirmed's 29), but the economic stagflation of the 1970's had a profoundly negative impact on Affirmed's adjusted earnings.

There is little doubt that if Affirmed had won the same races today as he did in 1977-79, his career earnings total would be through the roof. Of course, the same could also be said about the horse a large plurality, if not a majority, of racing fans consider the greatest of all American runners.

This research would not have been complete without adjusting the earnings of Secretariat. By my calculations, Secretariat's two seasons of brilliance netted him $6,532,082 in today's dollars.

I can already hear the cries of blasphemy.

Most everyone would agree that $6.5 million is not an accurate picture of what Secretariat could have earned if he ran today, not with a $5 million Triple Crown bonus and lucrative races like the Breeders' Cup Classic (G1) available to be plundered. A noted turf scribe of my acquaintance once devoted an entire column to make the argument that Secretariat would be the leading money earner of today by going race-by-race through Big Red's record, crediting him with money based on current purse structures and substituting races now run with those Secretariat won which are either defunct or of lesser stature today.

That exercise missed the point. The reality is that revising Secretariat's career record is not a sound argument on which to build a case for him being universally acknowledged as the leading money winning horse of all time. We'll say it again -- possession of this title does not confer on its owner anything more or less than being the leader in this particular statistical category. Throughout life we all become acutely aware that the most talented or deserving do not necessarily reap the financial rewards commiserate with their ability, and this is no different.

The figures do not lie. Secretariat's career was far too brief for him to come remotely close to challenging Kelso's contemporary earnings mark. If blame needs to be posthumously applied for the fact his career earnings pale by historical standards, let's pin it on the knaves and scoundrels working in our nation's capital in the decade before and after Secretariat graced us with his presence on the racetrack. It was they who claimed we could have both guns and butter, and that keeping the printing presses humming would have no ill effect on the value of our pocket change.

Aside from comparing the bank accounts of Hall of Fame runners, the inflation calculator is also useful at giving us a better understanding at how far the industry has progressed, or regressed, over time with respect to purses and handle. That will be the subject of a future commentary.

Disclaimer: I am aware that there are criticisms within the economics world, particularly among those associated with the Austrian School, that the government's Consumer Price Index is not only an inaccurate indicator of the purchasing power of the dollar, but through manipulation actually understates the rate of inflation. Be that as it may, I have not yet discovered or been exposed to any other calculating tool that gives me a general idea of the comparative purchasing power of our currency over time. If the more enlightened know of a better way to make such calculations, I'll gladly entertain any useful information they might provide.



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