On Jan. 12, 2016, Frank Stronach announced plans to create the world's richest horse race in 2017, the $12-million Pegasus World Cup, at Gulfstream Park in Hallandale Beach, Fla. The race would be funded by 12 individuals or entities putting up $1 million each for a guaranteed spot in the starting gate.
We polled our readers, asking if they thought this proposed $12-million race would ever happen. Sixty-nine percent of them said “no.”
Fifty-four weeks later, on Jan. 28, 2017, the inaugural Pegasus World Cup took flight at Gulfstream Park, featuring a rematch between Arrogate and California Chrome, the respective 1-2 finishers in the Breeders' Cup Classic at Santa Anita on Nov. 5 and first and second in the Longines World's Best Racehorse Rankings for 2016. NBC Sports was on hand to televise the event nationwide. It was an electrifying atmosphere on-track as the big race approached. By all accounts, including a Gulfstream Park record $40-million plus in total wagering, the event was a major success (even 72 percent of the skeptical readers of the Paulick Report agree in our latest poll that it was successful).
Moral of the story: Don't bet against Frank Stronach.
When the dust had settled in the twilight of a sunny South Florida afternoon, Arrogate had only strengthened his hold as the world's best Thoroughbred after an overpowering performance, winning the inaugural Pegasus World Cup by 4 3/4 lengths. California Chrome, only a week after being named Horse of the Year for the second time in three years, ran the worst race of his career – finishing ninth, beaten nearly 30 lengths. He now exits the racing stage and moves on to a new life in the breeding shed at Taylor Made Stallions in Nicholasville, Ky.
Going into this inaugural Pegasus World Cup, people were wondering if there would be a second one in 2018.
Don't bet against that, either.
For this year's running, only three of the 12 original $1-million shareholders will make money or break even: Coolmore Stud, which worked out a deal with Arrogate's owner, Saudi Arabian Prince Khalid of Juddmonte Farm, to run the 3-year-old champion of 2016 in their slot; Frank Stronach, whose Canadian-bred Queen's Plate and Woodward Stakes winner Shaman Ghost finished second; and Starlight Racing, whose 4-year-old Neolithic ran extremely well in only his second stakes start.
The Pegasus World Cup purse structure had $7 million going to the winner, $1.75 million for second and $1 million for third. The rest of the runners received $250,000.
But the shareholders will also be getting a rebate – their cut of the handle (about $16 million was wagered on the race, including multi-race bets) and any sponsorship money. In the future, officials with The Stronach Group – owner of Gulfstream Park – hope there will be a television rights fee to divide among shareholders.
This year's rebate – in addition to the purse money – is expected to be in the range of $150,000 to $200,000.
Tim Ritvo, The Stronach Group's COO, said the long-term “recipe for success” for the Pegasus World Cup will be for shareholders of the first four finishers to show a profit, the next four to break even and the final four to wind up slightly in the red.
The Stronach Group – now led by Frank Stronach's daughter, Belinda Stronach, who enthusiastically embraced the Pegasus World Cup – invested millions of dollars in this first running, said Mike Rogers, president of the company's racing division. That came in the form of marketing and the creative video series involving mixed martial arts star Conor McGregor, the television buy on NBC, staffing and security for the event, food, beverages and entertainment.
Critics complained about ticket prices for the Pegasus World Cup, but Rogers said the track would have been overwhelmed if Gulfstream kept to its everyday policy of free general admission. “It wouldn't have been a good experience for anyone,” said Rogers. “Belinda wanted to make sure that anyone who paid for a ticket got great value.”
The Stronach Group's team and the first-year shareholders will conduct a post-mortem on this year's running and begin planning for the 2018 Pegasus World Cup. That's been the process leading up to this inaugural running.
“Every time we had an issue to discuss, the whole group (of shareholders) was involved,” Ritvo said. “We've had good discussions all along and they were very professional. It's one time people in racing have worked as one. It reminded me a little of the NFL: each shareholder was trying to make the most money, but understood that if we didn't function as a group we wouldn't succeed.”
“They were fantastic to work with,” Rogers said about the shareholders.
Ritvo said another group, the Florida Horsemen's Benevolent and Protective Association, also deserves credit for helping make the Pegasus World Cup a success by giving up their share of the handle on the big race.
“I'm not sure other jurisdictions would have been as cooperative,” Ritvo said. “We got a letter from Bill White (FHBPA president), commending us for a new innovative way of thinking. They got 50 percent of the revenue from the undercard, which was double what it was on Donn Handicap day in 2016. They took a chance and did pretty well.”
Rogers is hoping for more international participation in year two after nearly getting Awardee – runner-up as the favorite in Japan's biggest dirt race, the Dec. 4 Champions Cup – to commit to this year's running. Awardee is owned by Koji Maeda, who is planning to bring 2016 Triple Crown runner Lani back to the U.S. this year to target the Breeders' Cup Classic.
One thing that won't change in the immediate future, Rogers said, is the site for the Pegasus World Cup, which takes place just a furlong or two from Gulfstream Park's iconic horse and dragon statue. There had been discussions about possibly moving the 2018 Pegasus World Cup to Santa Anita Park, another Stronach Group-owned racetrack.
“Belinda developed good relationships with marketing people in Miami,” said Rogers. “It's a fun venue, even though it is limited in space. We want some consistency, to get some legs under us in the beginning. I think it's staying here.”
New to the Paulick Report? Click here to sign up for our daily email newsletter to keep up on this and other stories happening in the Thoroughbred industry.
Copyright © 2018 Paulick Report.