Kentucky Derby: American Pharoah chases racing crown

(CNN)It's been dubbed the most "exciting two minutes in sports."

But if you're a top racehorse owner, the Kentucky Derby can also be the most nerve-racking 120 seconds of the year.
"I'm extremely hopeful, scared and excited," Ahmed Zayat, who has three thoroughbreds running in the most decorated of all horse races Saturday, told CNN. "I can't sleep and I'm counting the minutes."
His nervousness is warranted.
    The 141-year-old cup known as the "Run for the Roses" arguably has as much to do with lady luck as it does with pageantry and competition.
    "You have to be the best horse on the first Saturday in May at 6.35pm," said John Ward, the executive director of the Kentucky Horse Racing Commission, who won the Derby as a trainer in 2001.
    "It doesn't matter if you're the best horse in April or you're the best horse in July. And you don't get to call a timeout, or do anything like in other championship sports," he explained. "It takes a good horse, it takes skill in preparing your horse, and it takes an awful lot of luck."
    No one would agree more than Zayat.
    The Egyptian-American championship breeder has come up just short, finishing second at the Derby three times in the past six years, once to a 50-1 longshot.
    His biggest heartache of them all never even got to the starting gate. Just six days before the Derby in 2010, favorite Eskendereya was scratched with a leg injury and never ran again.
    "Horse racing is a very humbling sport," Zayat said, adding that the Kentucky Derby is "the most prestigious horse race in the world, period."
    But 2015 might just be Zayat's year. For one thing his New Jersey-based Zayat Stables, which only began breeding in 2006, owns one of the favorites, American Pharoah.
    In his five races to date, American Pharoah has won four and collected $1.412 million in earnings. A win in Kentucky would double the three-year-old's career earnings in just one race.
    His name -- a play on Zayat's dual citizenship -- was misspelled when registered at the Jockey Club in New York. The fact that he is homebred at Zayat Stables, co-run with Zayat's son Justin, prompts gushes of pride from his owner.
    "I would be lying if I didn't tell you that this horse breathes a different air than any other horse that I have had," Zayat said. "He is showing all signs of being a once in a lifetime horse."
    Furthering his odds, Zayat managed to qualify two other thoroughbreds, Mr. Z and El-Kabeir, into the highly coveted field of 20.
    No other owner this year has a majority interest in more than one entry. The race attracts thousands of candidates that are eliminated using a points system tallied during the season. The odds of having just one entrant are low, much less three.
    But there's method behind Zayat's track record.
    The 52-year-old with an MBA from Boston University has a knack for turning risky prospects into gold. In 1997, he took over a derelict brewing company from the Egyptian government and turned it into a profitable cash cow, selling non-alcoholic beer to most of the Middle East.
    Five years later he sold Al Ahram Beverages to Heineken Brewing, making way for his true passion.
    Along with breeding at his own stables, Zayat spends a great deal of money on yearlings (one-year-olds) purchased at auction. With the help of a large team, he tries to identify a few with exceptional potential.
    Like his counterparts in modern-day baseball and soccer, Zayat said he uses data analytics to try and minimize the risk in a notoriously risky sport.
    To fill out his criteria checklist, he hired experts to chart fatigue analysis and conduct heart scans (some medics claim horses with oversized hearts have a greater chance of becoming champions).
    "This business is mainly run by people who have been in (it) for centuries, and they kind of inherited the trade," he said. "There was a lot of tradition and they really weren't questioning it. We are in the 21st century; we need to introduce new technology."
    Sometimes, however, Zayat admits emotions can override business decisions.
    Fresh off his sale to Heineken in 2005, Zayat said he outbid horse racing's deepest pockets to pay $4.6 million for an exquisite looking yearling at a Kentucky stable. He named him Maimonides, after an ancient Egyptian philosopher. "I like naming things that go back to my heritage," Zayat said.
    Some insiders, however, consider spending on the likes of Maimonides as more foolhardy than value-driven.
    "You're looking at a one-year-old (horse) who has never had a saddle on his back," said Jerry Brown, president of Thoro-Graph, which provides data and consulting to racehorse investors.
    "It's the equivalent of looking at a 10-year-old for the NBA draft based on how he looks and how his parents played basketball. That's what buying yearlings is like. It's a total crapshoot."
    Maimonides's career was cut short due to injury after only two races (of which he won the first by a distance) and $62,000 in prize money. Today, his stud fee fetches just $2,500, according to The Blood-Horse Stallion Register.
    On the other hand, American Pharoah's sire, Pioneer of the Nile -- who finished second at the Kentucky Derby in 2009 -- commands $60,000 per mare.
    "You don't really make money per se in racing, because the purses that you win are not enough to offset all your expenses," he explained. "Once you hit, that is where the money is, in breeding."
    Zayat owns nearly 130 horses, each of which cost him $5000 to $6000 per month to maintain.
    Those expenses -- which total more than $9 million annually -- need to be covered, and each of his thoroughbreds "retired as stud" can breed between 120 and 160 horses a year for up to 20 years, he explained.
    "You need to have one star. One horse can make up for all the mistakes," he said.
    American Pharoah may well be his next star. He is trained by racing Hall of Famer Bob Baffert, although the three-time Derby winner also happens to train Zayat's biggest competitor in the race, Dortmund (owned by IT baron Kaleem Shah).
    Baffert is not without controversy. Seven horses mysteriously died under his watch in a 16 month span, beginning in late 2011. None of the horses happened to belong to Zayat, and Baffert was cleared of any wrongdoing.
    "He was thoroughly investigated by the horse racing commission, and he was totally cleared. That's good enough for me," said Zayat.
    The Egyptian native faced another challenge last year when his trainer Steve Asmussen was accused of abusing horses in an undercover investigation by the People for the Ethical Treatment of Animals (PETA).
    After watching a 10 minute video released by PETA that involved his horse Nehru, Zayat withdrew all 12 of his stallions from the care of Asmussen and his assistant Scott Blasi.
    Asmussen was exonerated in a 49-page report by the Kentucky Horse Racing Commission. "We couldn't find anything that substantiated PETA's claims," said Ward. "His horses are well taken care of."
    Zayat, however, wasn't convinced.
    "I was horrified, and for me there is no tolerance for anything like that," he said. "It was a very hard decision to sever the relationship, but I had to do it in the best interest of my horses and what I believe is morally right, not just politically right."
    The incidents were among several in the horse racing sphere which prompted some owners to call for 24-hour surveillance cameras before big races. New York has installed cameras throughout the state's racetracks and Kentucky is heading in that direction, said Ward.
    As for doping -- an issue that has intermittently plagued the sport over the past few years -- Zayat said the intentions of horse racing's various governing bodies are good, but implementation is still a work in progress.
    "It's a very big mishmash from one jurisdiction to another," he said. "They have been working on it, but we are behind the curve."
    Nevertheless, over 15 million television viewers are expected to tune in on Saturday to watch the likes of Dortmund and American Pharaoh battle for all the glory.
    Zayat calls American Pharoah a Cinderella story because of his home grown parentage, but he knows better than to get ahead of himself.
    "Cinderella stories don't always have Cinderella endings," he said.