The inaugural running of the race is a nice step forward for our sport. People are excited about horse racing in January. The buzz can lure in fringe racing fans during the slow sports week before the Super Bowl. We will get to see California Chrome one more time. As I have been eschewing since the race was announced, the unique purse structure is intriguing. And the early subscriptions for the spots has made the behind the scenes jockeying by contenders and stake-holders compelling stories. Stories that the public must be allowed to know.
The field will be as follows:
Arrogate
Breaking Lucky
California Chrome*
Eragon
Keen Ice
Neolthic*
Noble Bird
Prayer for Relief
Ralis*
Shaman Ghost*
War Envoy*
War Story
* running for original subscriber. Others are starting after negotiating deals with original stakeholders
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The purse structure of the race is very different from other stakes races with the only windfall for owners being the winner’s share. Instead of the standard 60% for the winner, 20% for second, 11% for third, 6% for fourth and 3% for fifth, this race will give 58% of the $12 million ($7,000,000) for the win, but a mere 14.59% ($1,750,000) for second, 8.3% ($1,000,000) for third and $250,000 for everybody else. In addition, each stakeholder will share in royalties from wagering, sponsorships, and television rights which are estimated to be in the $100,000-$300,000 range. Inaugural stakeholders will have the right of first refusal for a $1 million spot in next year’s Pegasus.
Due to this top-heavy purse structure, all negotiations for starting spots in the Pegasus should be made public. When owners have to put up $1 million 8 months in advance and the minor awards are reduced, the behind the scenes jockeying is inevitable. Add in that California Chrome and Arrogate have separated themselves from the field, and we have many possible motives for the remainig 10 stakeolders..
When it comes to financing options and negotiations, the motives and creativity of the parties involved will far exceed whatever guidelines are put in place beforehand. Transparency in these dealings is absolutely necessary for the race-betting public. Based on these negotiated deals the wagering public needs to know which horses are running to beat Chrome and Arrogate, and which ones are running to limit their losses or merely break even. The bettors need to be protected.
Stakeholders can manage their shares in any way they see fit. They can sell, lease, or contract their share. They can give up potential purse money, sell shares, etc. We may even have horses that will be running just so that the stakeholder can use their right of first refusal for a spot in next year’s race. Why else would Ahmed Zayat have contracted a spot with stakeholder Rosedown Stables and be running Prayer For Relief, a horse who hasn’t won since 2013? I would love to have an idea of where everyone stands before the race is run.
Anything can happen in a horse race, but conventional thinking has California Chrome and Arrogate in a class by themselves with everyone else battling for 3rd. Keen Ice, a likely third choice, finished 10 lengths behind our dynamic duo in the BC Classic. If the Keen Ice connections made a deal where 3rd or 4th place in the Pegasus is their goal, horseplayers need to know. Another possible scenario is that other stakeholders concede the top two spots and see Keen Ice as the horse they need to beat for 3rd. Their horse’s race-day strategy will be far different than if they were going for the win.
In the case of Chrome and Arrogate, the intentions of everyone involved are obvious.
California Chrome’s connections purchased their spot as soon as the race was announced and Chrome is a healthy projected starter, so the stake was money well spent. Chrome’s only goal is to win as he will attempt to surpass the $20 million mark in lifetime earnings.
Arrogate, however was a slow developing 3yr old who had yet to break his maiden when the race was announced last winter, Juddmonte Farms had no reason to put up the $1 million for the Pegasus. After a record setting Travers victory and a win in the Breeder’s Cup Classic, a chance to win the Pegasus was in sight and a spot needed to be obtained. A brief bidding war began, but quickly ended before Christmas when a deal was reached with deep pocketed Coolmore, who had subscribed for their spot back in May.
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At the other end of the spectrum, a spot for Kentucky Derby winning Nyquist had been purchased but Nyquist did not win another race. His connections had a spot but no horse, so what loss would they be willing to take? I can’t imagine what type of deal would be made if they just try to recoup some of their investment but I’d surely like to know before race day..
The reality is that with Chrome and Arrogate being so superior to the rest of the field, many horses will be running for the 3rd place purse which is merely a break even return. That leaves possibly 10 connections hoping for show, and since the $1 million was layed out in advance, they may be looking to make deals to reduce their risk and ensure at least some return in the event that their horse finishes 4th or even worse.
No matter who ends up in the starting gate, I would like to know why they are there and who stands to benefit from whatever outcome occurs. The backroom deals cannot be shrouded in secrecy and conspiracy. That would be bad for gamblers and bad for racing.
