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June 1, 2016 | by: Bill Giauque
The Stronach Group announced creation of The Pegasus World Cup on May 11. By May 19, all 12 starting post positions, priced at $1 million, were sold out. The announcement was made at Pimlico Race Track, a Stronach Group property, a couple of days be for the running of the Preakness Stakes (G1), won by Exaggerator.
The $12-million purse immediately makes the Pegasus World Cup the richest race in the world surpassing the $10-million Dubai World Cup. To be held Jan. 28 at Gulfstream Park, another Stronach Group property, the Pegasus Cup will boast $7-million for the winner.
Founded by Frank Stronach, who owns Adena Springs South farm near Williston, Stronach Group also owns Santa Anita and Golden Gate Fields in California.
The purchasers of the starting gate positions are allowed to use their spot in the starting gate, sell or lease their position or partner with another horse owner. The positions went on sale May 16 and were sold out within a couple of days.
The buyers are: The Stronach Group, the promoter of the Pegasus World Cup; Starlight Pegasus Partners, of which Jack Wolf is a partner and the CEO of Pegasus World Cup; Paul Reddam, the owner of Kentucky Derby winner Nyquist; Coolmore, the worldwide racing operation based in Ireland;
Other buyers include: California Chrome LLC, Perry and Denise Martin, original partners in California Chrome, Taylor Made Farm and some significant Kentucky breeders; Jim McIngvale, furniture icon and horse owner; prominent horse owners Jerry and Ronald Frankel; Sol Kumin, owner of Exaggerator, and James Covello of Goldman Sachs.
Additional buyers are: Dean and Patti Reeves' Reeves Thoroughbred Racing of Suwanee, Geo; Ruiz Racing; Daniel Schafer, a Detroit racing fan with a million bucks; and Jeff Weiss of Rosedown Racing Stales, a Florida real estate executive and owner of a small stable.
Obviously, the Pegasus World Cup has caught the attention of horse owners, great and small, and even a horseless racing fan. They all have two things in common—they are interested in horse racing and have a million bucks.
Some of the buyers are hoping to run their own horse in the world's richest race, while some of the buyers are looking at it as an investment with options. Reddam, who owned 2012 Kentucky Derby winner I'll Have Another, which was purchased at the Ocala Breeders' Sales' Co.'s April Sale, has already put his Pegasus post position on the market for $2 million, a 100 percent return on investment.
The buyers will have the opportunity to share in the purse money, but that's not all. They also will have share in all net proceeds, including handle, advertising, and media rights, according to the Stronach Group.
To be run at a mile and one eighth, the Pegasus Cup features several innovations. The entry procedure (get your hands on one of those post position rights) is essentially up to the holder of a post position, and the participation in all net proceeds is also an expansion of return on investment possibilities.
Stronach has been innovative before. In 2003, Stronach brought the Sunshine Millions to Florida and California, where he was the owner of Gulfstream Park in Florida and Santa Anita in California. The idea was a showdown between Cal-breds and Florida-breds with four races at each track.
The races were restricted to only horses bred in those two states. The winning state was determined by a point system for horses placing in the races. Florida was to dominate.
However, Stronach cultivated greater interest than the two participating states when he secured a television contract with NBC. The feature was the $1-million Sunshine Classic.
It was a longshot, but Stronach pulled it off. The television contract lasted longer than most observers expected. California hung to the Millions longer than CBS. Finally, the last few years the Sunshine Millions was reduced to Florida Sunshine when California dropped out.