Pegasus World Cup: A Jolt of Reality

When I first heard the idea behind the new $12 million Pegasus World Cup, the brainchild of Frank Stronach, I thought it was one of the worst ideas ever. After all, who would put up $1 million to run in a horse race in late January, and furthermore, who would put up $1 million to run against California Chrome, who, remarkably, already is committed to run in the race? And anyone who has nothing better to do with a million dollars doesn’t need the 12 million, right?

Also, just because someone has a million dollars to invest/throw away, it doesn’t mean they have a horse talented enough to run against whoever shows up in this gimmicky event. And vice versa; the best horses in the country at that odd time of the year could very well be owned by people who are frugal with their money or simply don’t have the resources to make such an outlandish investment, or should I say gamble?

But as news of this wild idea began to circulate, new twists in the plot began to emerge. In just a matter of days, all 12 spots were purchased. I found that astounding. It was like when the Cabbage Patch Kids hit the shelves of Toys R Us back in the ‘80s. Every kid, or in this case rich kid, on the block had to have one. It’s the reason why some people buy Gucci shoes even though the ones off the shelf at DSW may fit better.

Soon, it became Willy Wonka all over again, but this time there were 12 golden tickets hidden in a Frank Stronach Wonka Bar, and the mad rush began to get your hands on one.

Because a precious spot in the race need not be purchased outright, but leased or shared or partnered up, it added an entirely new dimension to the race. In addition, there would be revenue generated from television rights and sponsorships, making this a marketing bonanza. Was racing actually doing a good job of marketing itself? Make people purchase something they don’t need, in some cases with money they don’t have, because they want the prestige of being involved with something new, daring, and innovative. For a mere million you can look cool and hope you’re buying a Lamborghini and not a DeLorean.

Among the owners who immediately snatched up the golden tickets were Frank Stronach, of course, James McIngvale, Paul Reddam, Sol Kumin, Reeves Thoroughbreds, the ownership of California Chrome, and Jack Wolf (who heads up the marketing of the race) and Donnie Lucarelli of Starlight Partners, now using the name Starlight Pegasus Partners for this occasion.

Many of these are salesmen and hedge fund brokers, or simply high-powered wheelers and dealers. They know what they’re doing when they invest big bucks, and this is no more a gamble to them than investing millions of dollars on an unproven yearling…by a first-crop stallion no less.

Kumin, who owns part interest in Preakness and Santa Anita Derby winner and Kentucky Derby runnerup Exaggerator, and also owns Blue Grass Stakes runnerup My Man Sam with his Sheep Pond Partners, said his first choice is to run in the race if he has a horse who is good enough and ready to compete. If not, then he’ll start wheeling and dealing.

The plot twist is the leasing, partnering, and selling of shares. There is your marketing hook. And now we have a column by Bill Finley about a 32-year-old man in the pizza business named Dan Schafer who has never owned horses, won’t publish a photo of himself, wishes to remain a mystery man, and, oh, yes, he’s put up $1 million to secure a spot in the race. Even if this is no more than a person seeking publicity to sell a few more pies, it could turn out to be inspired. The more intrigue, the more spellbinding it becomes, and don’t think many of those left out of the fun won’t be pounding on his door looking to invest in what now has become a precious spot in the starting gate.

Now that we have the marketing hook, why not take it one step further and see if anyone is interested in turning this into a TV reality series. It would have everything. The viewers could follow the golden ticket holders and make an Amazing Race type of reality show, as these high rollers sell, lease, and bargain their way toward the big event, and then see who gets to the finish line first, and in what manner? We can create our own horse racing version of Survivor, with its share of blindsides and deception. Along the way, we have reward challenges, otherwise known as prep races. Not every starter is going to be coming out of the Breeders’ Cup.

When you combine beautiful horses, beautiful people, and some financial wizardry and wheeling and dealing, culminating with a race for $12 million, you’ve got a sure-fire hit. Racing produces its own Cinderella stories, but the public also loves Lifestyles of the Rich and Famous and Shark Tank as well.

So, I’m starting to think that I was wrong in my initial opinion of this idea, especially considering how quickly it sold out. It could become the Hamilton of horse racing. Only this time we’d have dueling with dollars instead of pistols.

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