01/13/2016 11:18AM

Stronach proposes creating $12 million race

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Frank Stronach, the owner of The Stronach Group racing company, has proposed the creation of a $12 million race that would be funded by a $1 million investment each from 12 individuals, according to the company.

Stronach initially pitched the idea at a Thoroughbred owners’ conference at his Gulfstream Park in Florida on Tuesday. On Wednesday morning, his company formalized the proposal by issuing a press release providing some additional detail, stating that “there will be meetings held with prospective shareholders to fine tune the program and make sure there are no misunderstandings.”

According to the release, each individual who buys a $1 million share will be entitled to one spot in the “Pegasus World Championship,” a 1 1/4-mile race to be held in January at either Gulfstream Park or Santa Anita in Southern California. The Stronach Group, a private company formed to buy the racing assets from a bankrupt publicly traded company controlled by Stronach, owns both tracks. The name of the race harkens to a statue in front of Gulfstream of a winged horse stomping on a dragon, a 110-foot sculpture that reportedly cost $30 million.

The proposal would create the richest race in the world. Currently, the Dubai World Cup, held in March, is the world’s richest race at $10 million.

The release states that the shareholders will split 70 percent of all revenue from the race, including “the handle of the race, media rights, and sponsorship, less expenses.” The remaining 30 percent would go to The Stronach Group, the release says.

Officials of The Stronach Group referred questions to Mike Rogers, a vice president with the company. Rogers was said to be traveling and unavailable for comment Wednesday morning.

It is uncertain how such a race could generate enough revenue to make the shareholders whole. A racetrack generally retains approximately 5 percent of the handle from a race, which would mean the race would need to handle $240 million to cover the purse. While the Kentucky Derby routinely generates handle in excess of $120 million and the two other Triple Crown races draw in excess of $50 million in wagering, the U.S.’s richest race, the Breeders’ Cup Classic, attracted $28.6 million in bets last year.

The release states that the shareholders will “have the opportunity to lease the facilities of Gulfstream Park and Santa Anita” to stage the race. It says that the race is anticipated to become an annual event.

A previous version of this article misstated the amount of handle needed to cover a $12 million purse. It is $240 million, not $60 million.