Nine slots sold for Pegasus World Cup

The Stronach Group sold nine of the 12 slots to its Pegasus World Cup prior to a Friday evening deadline for the transactions and will buy the other three $1 million slots with the intent of marketing them to late comers in the six weeks until the Jan. 27 race at its Gulfstream Park in south Florida, a top official of the company said on Friday just after the deadline had purportedly passed.

As described in an article previously posted on DRF.com, the slots were sold to the connections of a number of the top handicap horses in the country, including the first three finishers in this year’s Breeders’ Cup Classic – Gun Runner, Collected, and West Coast – and the horse who finished in a dead-heat for fifth in that race, Gunnevera.

The article, posted mid-afternoon on Friday, said that eight slots had been sold for the race in advance of a 5:00 p.m. Eastern deadline, with several late deals still possible. A ninth slot was sold to Charles Fipke just prior to 5 p.m., according to Tim Ritvo, the chief operating officer of The Stronach Group. (Although multiple individuals said that the deadline was 5 p.m. Eastern, Ritvo said that he was “unsure” about the exact time of the deadline, and he did not immediately respond to a request for clarification.)

In a separate interview just prior to 5 p.m., Fipke’s trainer, Dallas Stewart, said that Seeking the Soul, who recently won the Clark Handicap, would be pointed to the Pegasus, rather than Fipke’s mare Forever Unbridled, who had been considered a potential starter in the race.

Ritvo said on Friday evening that the company was still waiting to hear from several parties that had expressed interest in buying a slot, but he also said the company would buy the three remaining slots if they were not sold by the end of the day. The Stronach Group will then try to offload those slots to owners of horses who might want to try to strike a deal later to get in the race.

“We still think there will be 12 in the race,” Ritvo said.

First run in January of this year, the Pegasus has been heavily promoted by The Stronach Group and it is being advertised as the richest race in the world. Last year’s purse of $12 million was funded entirely by the sale of 12 slots in the race for $1 million apiece, but this year, in addition to the money from selling the slots, The Stronach Group is kicking in an additional $4 million.

Slot buyers were required to put up $350,000 on Friday, with the balance, $650,000, due in mid-January, Ritvo said.

The failure to sell all 12 spots means that The Stronach Group could be on the line for as much as $7 million of the Pegasus purse, which is being listed at $16 million. However, any horse that starts in the race is guaranteed to receive $650,000 in earnings regardless of finish position, meaning that, if 12 horses start, only $8.2 million of the $16 million is actually up for grabs.

Under the structure of the race, owners of a slot are given the right to start any horse in the race, without the slot being tied to a specific horse, to protect the value of the slot in case a horse being pointed to the race is sidetracked or unable to start. The shares are considered marketable up until entries are drawn for the race.

If The Stronach Group buys three slots, the company will be placed in a position of negotiating for horses in competition, theoretically, with the other individual slot holders, which could raise a number of issues relating to conflicts of interest. Amplifying the issues, the Stronach Group will be hard-pressed to hustle horses for its three slots, since the $650,000 minimum purse guarantee to every starter means that the company could offset the $3 million total cost for the slots by $1.95 million.

Asked about the potential for those conflicts, Ritvo said that company officials would need to be “very careful” in how they went forward with marketing the slots, but he also said that the company had not yet fully vetted how to go about it, in part because they anticipated selling all 12 slots in the race to individual buyers.

“I don’t want to speak prematurely on that,” Ritvo said.

The Stronach Group is a private company controlled by Frank Stronach, who purchased a slot for the upcoming Pegasus through his breeding and racing operation, Adena Springs, as he did for the first running. Ritvo said that Stronach still has not identified a firm choice for running in his slot for the race. Last year, Stronach’s homebred Shaman Ghost finished second in the Pegasus, earning $1.75 million.