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.

Pat JF More than 1 year ago
Take the twelve million invest it in breeders cup races, add 7 million to the 5 million dollar classic. There's your twelve million dollar race. The rest could be added to the purses in other races on the two day program. To run in January is so wrong. Take what you have And make it better. Quality horses, more graded races,bigger fields and huge purses. It would be the biggest breeders cup ever.
Maribeth Kalinich More than 1 year ago
Wow, stunning. You made a few more mistakes. Like the take out of the handle. 5%. We wish, Try an average of 20%. Here is an article on California and some excerpts. “The best way to begin an optimal takeout experiment in California is to eliminate breakage on Win, Place, and Show (currently 15.43% takeout) AND to lower exacta takeout to 16%.” “Second, California racing must shift from a prohibitive 22.68% takeout on exactas to an industry low 16% takeout. “  http://blog.horseplayersassociation.org Stronach referred questions to Mike Rogers—who was unavailable for questions because he was traveling. That statue of Pegasus cost more like $50. And was almost entirely the work of foreign labor. Would have been nice to employ some American labor for that huge project. And my goodness what return they could get on their dollar for investing $12 million into Pimlico. $200 million was promised in 2002. Then another promise in 2002, 2004, 2006, 2008, 2012, 2014 . . . Ooo I see a pattern here. We got Kegasus, Gulfstream got Pegasus. I think we got screwed on that deal. What does this mean? “The Stronach Group, a private company formed to buy the racing assets from a bankrupt publicly traded company controlled by Stronach, owns both tracks.” Stronach went bankrupt in 2009 because he defaulted on a loan from his own Magna stockholders? He bought back his own track that was to be auctioned off. And this “The release states that the shareholders will “have the opportunity to lease the facilities of Gulfstream Park and Santa Anita” to stage the race. “ These tracks already have the Sunshine Millions in January. Just another way for Stronach to make a pile of money that he won’t put into Pimlico.
Chas More than 1 year ago
It is always 'someone else's money' when comes to the 'pie in the sky' ideals from Stronach...instead of 'dreaming up these absurdity's', how about Stronach focus on Santa Anita race track, which he owns unless he has forgotten which looks like the case, and send from either Laurel or Gulfstream people who know how to improve and run SA as the current one, the little emperor, is running it into the ground.....
Jack Pritchard More than 1 year ago
The rich get richer,while the game declines...Good thinking Frank....
Cris McHenka More than 1 year ago
How about bringing back the DC International? One mile and a half on the turf. It could run three weeks after the Breeders Cup and it could run at Laurel Park.
Maribeth Kalinich More than 1 year ago
Well said! The DC International was the precursor to the Breeders Cup and stopped running because it could not compete with the BC. It is a very historic race and should be brought back to Laurel Park.
morristmurray More than 1 year ago
Do you think the came note due on the Pegasus statue?
Tommy Massis More than 1 year ago
lol
Chuck Schafer More than 1 year ago
HOW ABOUT A RACE ON THE SAME DAY AS THE PREAKNESS WITH A 1 MILLION DOLLAR BONUS TO THE WIN NER OF THE KENTUCKY DERBY AND TELL MARYLAND TO SHOVE THE PREAKNESS AND TRADTIION BE DAMNED
Maribeth Kalinich More than 1 year ago
Oh please tell me this is sarcasm. Shove the Preakness and tradition be damned? That's pretty harsh.
Eleanor Sniegowski More than 1 year ago
Absolute pipe dream to think 12 interests would put up 1 million each for such a race.Their too busy ducking each other the whole year to come together.Distance and weights would be issue and whats the track putting up?Idea is ludicrous.
Joel Firsching More than 1 year ago
My idea was to split the breeders cup into a dirt division cup in the first saturday in november. All the breeders cup turf races would e run in january or early february. This way our star horses could run on both dirt and turf races. The quality of the fields would be better.
gradeonewinner More than 1 year ago
please keep your ideas to yourself
Joel Firsching More than 1 year ago
You are losing out on turf stars running at woodbine, ascot and japan who have big races at the same time in november.
Maribeth Kalinich More than 1 year ago
Everyone has the right to an opinion and to offer an idea. And Joel is right. The BC has bad scheduling. Other very prominent races were already taking place when the BC started in 1984. Bad planning can be corrected. Winter is turf season anyway. Softer ground when the ground gets a little hard from cold weather. Less stress on the horses. That's why Laurel Park is so popular in our Winter Meet. We have a good turf track.
Maribeth Kalinich More than 1 year ago
Maybe the dirt part should be in December. And split the two at two different tracks. It's good money and good exposure and GREAT for the sport. My goodness they need to start marketing. I never see much advertising except online on sites that are already horse and racing oriented. They already have us.