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Derby Horses Cheaper Thanks To Economy

Out of the 12 horses in the Kentucky Derby that were purchased at auction, nine of them have earned more money than what they cost.

Although it's still a rich person's game, return on investment — the average horse in the race cost $175,000 — striking it rich if your horse does well is easier.

Why?

Well, much of it has to do with when these 3-year-olds were born. By the time they entered yearling sales, the economy had crashed and many of those who speculated on the expensive hobby of buying horses has less money to spend. The prices of horses at auction plummeted.

As yearlings, some that went on to become Derby competitors sold for peanuts. Twice the Appeal was bought for $4,000 and Comma To The Top was bought for $5,000. Horses that have the potential to be in tomorrow's race never go for that low. (The two were sold again for $22,000 and $35,000, respectively)

As two-year olds, relative values could still be had. Even though 2010 was better than 2009, the horse business had still not recovered. Horses like Sway Away ($75,000), Decisive Moment ($70,000) and Twinspired ($140,000) likely would have sold for much more had the general economy not faltered.

Horse racing ownership will never quite be affordable, or rational for that matter, but the market correction that took place as a result of the economy means that this year's $1.4 million winner's check could be a whole lot sweeter to the owner than it was in years past.

Questions? Comments? SportsBiz@cnbc.com