Several months ago, Dan Schafer, who does not own a single racehorse, but has purchased a spot in the $12 million Pegasus World Cup, was looking forward to the next couple of months when the wheeling and dealing begins to fill the starting gate with 12 top-class horses at $1 million a pop.
The situation then looked pretty obvious. Anyone with a major contender would be beating down his door to make a deal to get their horse in the race. The same would apply to any other owner of a horse worthy of competing for such high stakes in such an elite field. It would be a fun time for slot holders as they entertained offers from all over the country.
Schafer said back in the summer: “People have already started courting me. I’ve already had an offer to buy my slot for a profit, but it’s not worth it to me. It’s going to get real interesting and real fun. That’s when all the storylines are going to start coming out. Some want to buy the slot outright, others want to be a partner, whether it’s for 50 percent or 25 percent. People just want a piece of the action. Here I am all of a sudden in the Sport of Kings, where the industry has embraced me all because of the one thing that I own, and it’s not a horse. The other slot owners who don’t own a horse have no idea what we’ve gotten ourselves into yet and what’s going to become of it, which makes it all the more exciting. I look forward to every tomorrow, because each day brings a new twist.”
The latest twist came in the Breeders’ Cup Classic, which all along has looked like the obvious well in which to dig for talented horses who were capable of beating or at least competing with California Chrome, whose starting berth has already been paid and accounted for.
But little did they know that only one other horse, and a monster at that, would emerge from the Classic and possibly turn around the entire wheeling and dealing concept. If Arrogate runs in the Pegasus, the slot owners no longer would hold the upper hand, waiting for owners of top-class horses to come to them with offers. Now it was up to them to go out and beg, borrow, and steal in order to work out a deal to fill their $1 million starting stall with the powerful gray frame of Arrogate. Only until his status is cleared up can the starting slot owners go back to concentrating on selecting the best horse available.
In the case of Arrogate, it is the horse’s owner, Juddmonte Farms, that holds the upper hand, assuming they are interested in participating at Gulfstream Park on January 28, a decision to be made by trainer Bob Baffert. They have at least expressed an interest, but have not committed one way or the other. A decision is not expected before the New Year. Right now, has there ever been a more sought after commodity in Thoroughbred racing than the sport’s newest and most dynamic sensation, who is ranked the No. 1 horse in the world after only two career stakes appearances?
Work out the best deal with Juddmonte and you have a super chance to turn one of the most lucrative and immediate profits in racing history. If you fail to “bag the elephant,” as Bud Fox did in the movie Wall Street, then you find yourself sitting with a $1 million investment and trying to figure out a way to beat both Arrrogate and California Chrome, who not only finished one-two in the Breeders’ Cup Classic, you needed a telescope to find the remainder of the field, many of whom looked to be attractive merchandise before the race.
So, where exactly do we stand in attempting to fill the Pegasus field? Not just fill the field, but do so with horses who are going to be competitive enough to at least make a profit or cut down on the losses. Remember, they pay $250,000 down to last and the slot owners do participate in the handle. Are you going to be one of the slot owners who wind up with one of the BC Classic horses who finished a country mile behind Arrogate and California Chrome, knowing your chances of beating both of them are pretty slim? At least third and fourth money is worth shooting for if it comes to that, and the thrill of participating in a ground-breaking event.
With Kentucky Derby winner Nyquist retired by owner Paul Reddam, who owns a starting slot, and Jim McIngvale’s failed attempt to stretch Runhappy into a mile and an eighth horse, that leaves possibly nine of the 12 slot owners to battle it out for a piece of Arrogate, depending on what kind of deal Juddmonte is looking to make, if any. Juddmonte, who certainly is not looking to sell Arrogate, possibly not even a portion of him, might even be in the market to lease the horse in a one-day only partnership. That actually was done in 2010 with Eldaafer, winner of the Breeders’ Cup Marathon. But that is pure speculation.\Speaking of which, let’s just play the game of speculation and pretend Juddmonte sells or leases a portion of Arrogate in order to get him in the race or purchases a spot in the starting gate, and then splits the winnings with the slot owner of their choosing. If they lease a portion of the horse, they would then take over full control of the horse once again the next day. All of this speculation is purely in fun. Who knows how Juddmonte is thinking right now? Remember, they do pay off all the way down to the last-place horse. But if he wins, with a winner’s share of $7 million, that’s a few million dollars profit in one day for each party.
Let’s also speculate that Frank Stronach, who founded the concept of the Pegasus, will run Shaman Ghost, who mercifully was a late scratch from the Classic, and Coolmore will run their Breeders’ Cup Turf winner Highland Reel, even though his pedigree is almost all turf. They have already expressed interest in running. Late January is an odd time for a European stable to run a horse on dirt, but it has been done in late March with horses racing on the Dubai World Cup card.
Jack Wolf of Starlight Racing has purchased a starting spot and also is CEO of the Pegasus World Cup, which is an invitational race. Wolf said he would love to have Arrogate run in his slot and will do everything he can to make it happen. But even if he doesn’t get him he would do all he can to get the horse in the race, as it is his job to attract the best horses. And we all know, if we get an Arrogate—California Chrome rematch, you can’t put a price on its marketing value, which would no doubt lead to a huge increase in attendance and handle.
And so let the strategy begin to unfold. If Juddmonte does decide to run Arrogate, with which lucky slot owner will they choose to share their golden ticket? How close to the race will they commit? Will they let the slot owners grovel at their feet or is there someone who has a clear advantage for whatever personal or professional reason?
What a turnaround from the early days when it looked as if the groveling was going to be done by the horse owners. Now, in good part because of Arrogate’s sudden and swift rise to superstardom, the question must be asked, from where are the remaining horses going to come? California Chrome and Arrogate look to be in a different stratosphere from everyone else, so will the slot owners now concentrate more on just finding a solid, consistent, classy horse who can pick up a decent chunk of the purse money? Do you try to get a tough, consistent horse like Hoppertunity or Dortmund (both possibilities) or Effinex or Gun Runner out of the Clark Handicap, in an attempt to at least pick up a decent sized piece of the purse rather than wait and make an offer for Arrogate and risk losing these others? Will Juddmonte make their decision based on the offer itself or who is making it?
Will any of the slot owners turn to South America in an attempt to get their hands on one of the many talented horses down there and come to Gulfstream with the mystery horse? There are plenty to choose from between Argentina, Chile, Brazil, Uruguay, and Venezuela. You never know when you’re going to find an Invasor, a Canonero II, a Candy Ride, a Gentlemen, a Siphon, a Sandpit, a Bayakoa, or a Paseana.
Also, they are hoping to attract one or two horses from Japan and one from Australia, so the bidding could be heavy on those as well if their record so warrants.
So many decisions to make, and it will soon be nitty gritty time, as the wheeler dealers put their salesmanship in action.
Who knows how this is all going to play out? If you’re a slot owner, are you hoping they don’t run Arrogate, knowing the chances of you getting in on him are very slim or do you welcome the challenge and the competition and try to sell your offer to Juddmonte, with the full knowledge that if you fail, your chances of winning decrease substantially?
Whatever happens between now and late January we should have a pretty good idea if this Pegasus will sprout wings. It certainly is revolutionary and should be a great way of breaking up the winter, especially if all the pieces fall into place. One thing we do know, we’re about to witness a concept in racing horses that we’ve never seen before. It should be fun.
*** The original 12 slot owners: California Chrome LLC, Coolmore, Jerry and Ronald Frankel, Sol Kumin and James Covello, Jim McIngvale, Paul Reddam, Reeves Thoroughbred Racing, Ruis Racing, Starlight Pegasus Partners, the Stronach Group, Jeff Weiss of Rosedown Racing Stables, and Dan Schafer.