If California Chrome wins the Belmont Saturday, his value could soar as a stud horse.
But experts say that even with a win, his value as a breeding horse will remain well below today's top earners. The reason: His mediocre genes.
A Thoroughbred's stud value is based mainly on his bloodline—and mainly from the sire, or paternal line.
Simply put, Chrome is not a member of horse royalty. His grandfather is the famous Throughbred Pulpit, but his father, Lucky Pulpit, is not as impressive.
Chrome may be a supreme racer. But in the highly traditional world of horse breeding, Chrome is seen as a genetic outlier— unlikely to produce a reliable line of lucrative racers.
"Chrome doesn't have sire power," said Thomas Clark, a respected bloodstock agent in Lexington, Kentucky. "He's not sired by a top commercial stallion. That's an important factor that he's missing."
Clark said that breeders can forgive a weak mare, but not a weak stallion as a father.
"With horses, it's OK to have a middle-class dam. But they don't forgive a middle-class sire," Clark said.
Estimates of Chrome's value vary widely. While his owners, Steve Coburn and Perry Martin, say Chrome is worth $30 million or more, Clark and others say he's probably worth $10 million to $12 million if he wins the race. But buyers may offer as much as $16 million if they're willing to make the bet, Clark said.
Either way, Chrome isn't likely to unseat the top horse in the stud race: Tapit. Tapit has the largest winnings of any current stud when it comes to his offspring. He can fetch as much as $150,000 for a successful foal.
Horses typically fetch between 300- and 400-times their per-stud fees. And Tapit is valued at more than $50 million based on his breeding record. Another stallion, named Warfront, has fetched a stud fee of $300,000 with no guarantee in a private deal, Clark said.
Clark said there are about 60 stallions who are the top breeders and each will "serve" an average of 130 mares a year. At an average of $45,000 per stud, that makes Throughbred breeding a more than $350 million a year business—just in stud fees.
It's unclear whether California Chrome will head to the breeding shed after the Belmont.
Clark said he expects Chrome will at least race for the rest of the year, given the big prize money available. However, if someone bought the horse for breeding, they would probably require Chrome to retire from racing at the end of the year, he said.
Whatever his price, California Chrome can look forward to continued earnings for the rest of his life—and a long line of mares lining up outside his stable.
—By CNBC's Robert Frank