Stronach sizing up last three slots for Pegasus

The Stronach Group will set up a committee to evaluate horses being considered for the three slots that the company bought for its own Pegasus World Cup, to be run on Jan. 27 at Gulfstream Park near Miami.

Tim Ritvo, the company’s chief operating officer, said Monday that the committee will likely include himself; Mike Rogers, the president of the company’s racing and gaming division; and P.J. Campo, the company’s vice president of racing. The committee will sort through applicants that contact the company seeking one of the slots and craft any deals that would be necessary to get the horse’s connections into the race, Ritvo said.

“We’re drawing up a list, and it will be based on the quality and the chances the horses have in the race,” Ritvo said. “And then each horse will then have kind of a tailored agreement.”

The company is setting up the committee after it committed to spending $3 million to obtain the last three slots in the race when a deadline passed on Friday night for owners to buy slots. At the deadline, owners were required to put up $350,000 for each slot, with the remainder, $650,000, due in mid-January. Nine individual entities purchased slots by the deadline.

The decision by The Stronach Group to buy the slots has introduced questions over whether the marketing of the company’s slots will pose conflicts of interest. The Stronach Group owns Gulfstream Park, and it has heavily promoted the race, including selling reserved tickets to the event at price levels that are some of the highest in the industry and also kicking in $4 million to the race’s purse. In addition, The Stronach Group’s chairman and founder, Frank Stronach, purchased his own slot in the race through his Adena Springs racing and breeding operation.

Ritvo said that Stronach and his daughter Belinda, who was made chief executive of the company in 2016, would sign off on any agreements that the company reaches for the last three slots. Asked if the company needed to keep an arm’s length from the Stronach family in the negotiations, Ritvo said that Stronach has not yet been involved in the details of the Pegasus and that “he only wants the best possible race.” Stronach has not identified the horse that he is pointing to the race for his own slot.

Under the structure of the race, each owner of a slot is given the right to start one horse in the Pegasus, which is being advertised as having a purse of $16 million, the largest in the world. The slots are considered marketable until the time of entry. Any horse that starts in the race is guaranteed to receive $650,000 of the purse regardless of finish position.

Ritvo said that the connections of seven horses have already contacted the company about the availability of the three slots. In the run-up to the first running of the Pegasus in January of this year, owners of slots ended up striking deals highly favorable to the connections of the horses that eventually ran in the race, due to the enormous amount of leverage the connections had in the negotiations. For last year’s running, every horse that started was guaranteed $250,000 in purse earnings.

Ritvo said that The Stronach Group will initially seek to sell the three slots outright for $1 million each “if the right horses popped up.” In the event that the three slots do not attract those kinds of offers, the committee will evaluate the horses seeking the slots up until entry time for the race with the intent on reaching deals for the starters, Ritvo said. Those deals will be confidential, Ritvo said.

The connections of the first three finishers in the Breeders’ Cup Classic were among those that purchased slots in the Pegasus, and the winner of that race, Gun Runner, the likely 2017 Horse of the Year, is expected to be a heavy favorite if he makes the race.