Essentially, Profit Protection works like a pay-from-proceeds contract – but with much more favorable terms for the breeder. The first $5,000 of gross sale proceeds goes directly to the breeder. The remaining sales proceeds, if any, are split 50/50 between the mare owner and Darby Dan until the advertised stud fee has been paid. All further monies go to the breeder.

Example 1 [Magna Graduate - $5,000 stud fee]:
Yearling sales price is $30,000.

• 1st $5,000 – to mare owner
• $5,000 to $15,000 – split 50/50 ($5,000 to mare owner, $5,000 to Darby Dan)
• $15,000 to $30,000 – to mare owner.
• Total to mare owner - $25,000

Example 2 [Suave - $12,500 stud fee]:
Yearling sales price is $20,000.

• 1st $5,000 – to mare owner
• $5,000 to $20,000 split 50/50 ($7,500 to mare owner, $7,500 to Darby Dan)
• Total to mare owner - $12,500

Unlike a normal pay from proceeds where the entire stud fee must be paid before the breeder receives any funds, with Profit Protection the breeder gets money first. Moreover, there is no limit on the reduction of stud fee should there be insufficient sale proceeds to satisfy 100% of the stud fee. In the case of a sale of $5,000 or less, no stud fee is due.