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In a response to yesterday’s post about leading sire Giant’s Causeway standing on the precipice of stallion superstardom, The Observer posed some intriguing questions and comments.

First, he asked “what do you think is the current market value of Eskendereya? And what would his value be if he wins the Derby?”

That is not the limit of the conundrum, however, because Eskendereya’s owner, Zayat Stables, is in default on about $36 million in loans from Fifth Third Bank. This is a serious consideration because the owner cannot escape some level of pressure to sell and turn that money over to the bank.

Observer noted that “I am sure Fifth Third Bank would love to have him sell this afternoon. … but I just feel like at least 50% of this horse will sell before the Derby.”

Surely, from the bank’s perspective, selling now opens the prospect of taking a considerable sum off the table, reducing THEIR exposure, bulking up THEIR bottom line, but also consequently reducing their upside should Eskendereya win the Kentucky Derby or … the Triple Crown.

These considerations are not lost on the stallion operations in Lexington, Newmarket, Japan, and elsewhere. Nor are the risk and the financial repercussions if they purchase an interest in the colt, then see him finish fifth on the first Saturday in May.

Adding in the current financial depression, with its squeeze on cash and the banks’ unwillingness to make loans on horses, it is easy to see how these factors have a deflating effect on the colt’s valuation, as well as the ease of putting together a deal before the Derby.

Observer, who is a pretty sharp appraiser of value, wrote: “I would guess he is currently worth about $12-$15 million. If he wins the Derby I would say his value could go to $18 million.” Those sums are certainly in the ballpark of where the horse would be valued in the present market, although $10-$12 million would be a more conservative valuation based on the colt’s ability to stand for $25,000 to $30,000 with his present record.

But what would it take to buy him? Owner Ahmed Zayat is not known as one especially keen on selling horses, even under duress, and he wouldn’t be in racing if he didn’t like the prospect of a high-stakes gamble. Furthermore, Zayat Stables already had turned down at least one multi-million dollar offer for the colt before he won the Fountain of Youth.

With two G1 victories since and the drama of coming into the Kentucky Derby as the favorite, my guess is that it would take $20 million to buy the colt before the race.

Which raises the question, “who would pay that much?” Well, the Japanese have some cash left. The Irish aren’t broke, and the oil barons are still selling crude. It’s mostly a question of desire.