The $12M Pegasus World Cup Thread

[cj]

Originally Posted by pele polo

How does Gulfstream make money from this event if 100% of the handle is being split between the owners of the 12 slots?

Did you see the admission prices?

[Rex Phinney]

A spot in the gate might be "Leased" or even "Contracted".

I might have a spot but no horse to fill it. I contract with another owner for his horse to run but that owner may not then share in the merch sales and handle cut.

IMO the $1,000,000 buy in for this is a no brainer. Between the handle cut, sponsorship dollars and last place purse you almost can't lose.

[the little guy]

Originally Posted by Rex Phinney

A spot in the gate might be "Leased" or even "Contracted".

I might have a spot but no horse to fill it. I contract with another owner for his horse to run but that owner may not then share in the merch sales and handle cut.

IMO the $1,000,000 buy in for this is a no brainer. Between the handle cut, sponsorship dollars and last place purse you almost can't lose.

You need to make about $700K in PURSE MONEY to break even.

[Rex Phinney]

Originally Posted by the little guy

You need to make about $700K in PURSE MONEY to break even.

So you're figuring each of the 12 gets $300,000 without purse $$$, that's a total of $3,600,000 in handle cut, sponsorship dollars and media rights.

Has that been actually laid out by Stronach group or just a guess on your part? It seems VERY low to me.

I think they can get that much just in sponsorship dollars and media rights, even after they give NBC their typical cut.

I'm still not clear on the handle, does it award handle of ALL the days races to these 12 or just the one race?

[iamt]

Handle on the Breeders Cup (Excluding Multiple Rae Bets) was about $16 Million.

If wagering was the same and the connections cut was 10% that is only 130,000 each. The numbers may vary but wagering isn't going to come close to covering the costs.

On top of that, there are effectively no media rights this year with Frank paying for the TV coverage, and sponsorship won't amount to too much.


Most owners are no chance of getting their costs back this year and would need the race to continue and find the right horse to have a real chance in years to come.

[the little guy]

Originally Posted by iamt

Handle on the Breeders Cup (Excluding Multiple Rae Bets) was about $16 Million.

If wagering was the same and the connections cut was 10% that is only 130,000 each. The numbers may vary but wagering isn't going to come close to covering the costs.

On top of that, there are effectively no media rights this year with Frank paying for the TV coverage, and sponsorship won't amount to too much.


Most owners are no chance of getting their costs back this year and would need the race to continue and find the right horse to have a real chance in years to come.

There is zero chance there will be $16 million bet on the Pegasus. $8 million is extremely optimistic. They also do not share in multi-race bets.

The million is for this year only. They don't own a spot for perpetuity.

[iamt]

Originally Posted by the little guy

There is zero chance there will be $16 million bet on the Pegasus. $8 million is extremely optimistic. They also do not share in multi-race bets.

The million is for this year only. They don't own a spot for perpetuity.

TLG, I meant to more clearly suggest that if this year was successful, the Option to buy next year (and if maintained in future years) would have some value.

Without a horse worthy of running though, it will be run at a large cost for a number of the entrants.

[Rex Phinney]

Originally Posted by iamt

Handle on the Breeders Cup (Excluding Multiple Rae Bets) was about $16 Million.

If wagering was the same and the connections cut was 10% that is only 130,000 each. The numbers may vary but wagering isn't going to come close to covering the costs.

On top of that, there are effectively no media rights this year with Frank paying for the TV coverage, and sponsorship won't amount to too much.


Most owners are no chance of getting their costs back this year and would need the race to continue and find the right horse to have a real chance in years to come.

You don't think they are going to have commercials during the broadcast? My understanding of the typical NBC deal is all the revenues less broadcast expenses and then NBC and the horse racing partner (Breeders Cup, Kentucky Derby etc) split the rest 50/50.

It seems to be pretty much like clockwork these days that they can get the rich breeding operations in Kentucky to buy ads.

They've also added at least one other stakes race that the owners will share in the purse money on.

I for one can sort of see this thing gaining steam over then next 90 days. it's kind of been a pipe dream for while, but it's about to take center stage with the BC now over.

[VeryOldMan]

Originally Posted by the little guy

The million is for this year only. They don't own a spot for perpetuity.

Agreed. My understanding from reading the conditions is that they have a free option to buy the slot for $1 million next time - i.e, right of first refusal. Locked in . . . if they continue to put up $1 million.

[the little guy]

Originally Posted by iamt

TLG, I meant to more clearly suggest that if this year was successful, the Option to buy next year (and if maintained in future years) would have some value.

Without a horse worthy of running though, it will be run at a large cost for a number of the entrants.

Gotcha. Thanks.

[iamt]

Originally Posted by Rex Phinney

You don't think they are going to have commercials during the broadcast? My understanding of the typical NBC deal is all the revenues less broadcast expenses and then NBC and the horse racing partner (Breeders Cup, Kentucky Derby etc) split the rest 50/50.

It seems to be pretty much like clockwork these days that they can get the rich breeding operations in Kentucky to buy ads.

They've also added at least one other stakes race that the owners will share in the purse money on.

I for one can sort of see this thing gaining steam over then next 90 days. it's kind of been a pipe dream for while, but it's about to take center stage with the BC now over.

I thought I had read an article previously where Frank had specifically stated there wouldn't be any income from the TV rights. Although that may relate to the sale and not any advertising revenue.

In saying that though the fact it is a new event and the lesser undercard it shouldn't be able to draw anywhere near the ratings of a breeders cup, which aren't high anyway. It will be a niche event with a demographic that advertisers don't fall over themselves to get too.

[Rex Phinney]

Originally Posted by iamt

I thought I had read an article previously where Frank had specifically stated there wouldn't be any income from the TV rights. Although that may relate to the sale and not any advertising revenue.

In saying that though the fact it is a new event and the lesser undercard it shouldn't be able to draw anywhere near the ratings of a breeders cup, which aren't high anyway. It will be a niche event with a demographic that advertisers don't fall over themselves to get too.

I can't find anywhere that it says Frank basically foots the bill for NBC's broadcast.

I agree that the ratings are not all that great, this is where the unique deal most of the NBC airing's comes from. NBC basically doesn't buy rights to broadcast these things. They front the cost for production get all that money back and then split the rest with the partner (in this case the 12 owners)

We don't know though if that is the deal here or if NBC had no interest and so Frank told them he would pay the production cost if they just put it on.

[pele polo]

They really need some sort of also eligible list with one or two horses.

[Lemon Drop Husker]

Originally Posted by pele polo

They really need some sort of also eligible list with one or two horses.

I like it.

What would they pay to be on that list? And WHO would they pay.

What if it only cost $10K to be on the AE list when you are guaranteed $250K for getting to the gate?

[pele polo]

Originally Posted by Lemon Drop Husker

I like it.

What would they pay to be on that list? And WHO would they pay.

What if it only cost $10K to be on the AE list when you are guaranteed $250K for getting to the gate?

Even better idea, I'll be first in line with my 10k, lol.

Pay a million just likeeveryone else. Construct it like the claim box and have the money ready to go.

Fields of twelve are nearly certain to have a late scratch of a sick horse or the connections don't like their post position. The 12 hole going 9f @ Gulfstream? They could have backed it up a little, maybe made it a 9 1/2f race.