Mage's Success Validating Commonwealth's Big Plans

Commonwealth Thoroughbreds has enjoyed a place in horse racing ownership for some time. But now it is giving fans a chance to buy into potential greatness and reap the rewards. Following the success last year of Country Grammer , who in 2022 won the Dubai World Cup (G1), Commonwealth now has Florida Derby (G1) runner-up Mage  set for the May 6 Kentucky Derby (G1). 

Through its app, Commonwealth provides fans the opportunity to buy a stake in a horse—and now in up-and-coming golfers as well—for as little as $50.

Part of the approach has been to strip down the terminology to make it more relatable to people outside of the industry. 

"So that's been a fun part we call edutainment where we try to make it fun and keep it light but we're also trying to educate our users," CEO Brian Doxtator said. "We do little things on our app like we say the first time we mention sire, we don't say sire, we say dad. And then in parentheses, we say sire. The first time we mentioned the dam, we don't say dam; we say mom, parentheses dam."

He said Commonwealth, which WinStar was an early investor and partner in, believes the methodology will develop new, engaged fans for the sport.

"It's not selling to the same audience; it is bringing in a fresh audience and fresh eyeballs. ... Horse racing, there's that depth, which I think leads to a more enriching, longer, kind of lifecycle of experience," he said. 

Doxtator discusses what Mage's success has meant for the partnership and his nearly 400 stakeholders. Doxtator also talks about how he got into horse racing, as well as potential forays into other sports.

MarketWatch: What has Mage's success and the upcoming Derby appearance meant for you guys? 



Brian Doxtator: It's meant a ton. We're in the process of spinning up probably two or three dozen watch parties across the country. ... It really shows Country Grammer wasn't a one-hit wonder for us.

Another part of the strategy with multiple sports is that any single-sport player inevitably if they want to grow and they want to scale their company up, they've got to offer more and more and more from that one sport. And so by the nature of that, you have to dig deeper and deeper in the well of talent. And so your hit rate goes down. And so rather than trying to offer 100-plus horses a year, we want to be in kind of 30 to 50 across three, four, or five sports and really just bring offerings and opportunities that we think have a realistic shot at both a financial return, but certainly having a lot of fun in case of a horse getting some good racing and at least trying to bump into that stakes category. Whether or not you win is TBD. 

We have a number of horses that we bought or bought a share and we've never offered them because you know we start to see, whether it's through works or hearing from the trainer, that maybe this horse might not have the goods. And so rather than offering that horse, which I think a lot of the industry still does, ... we just eat it. We don't send it out to the platform at all because we don't want to burden our customers with that. So that surprised a lot of our horse racing customers. And I think that has also led to us having a pretty good hit rate. I think six out of our 15 horses have won races. Three of them have won graded stakes races and so this is kind of part of our strategy and I think Mage is showing off that it's working. We're able to find talent from a lot of different places. 

We're going into this Derby on still a sub-half-million-dollar valuation on Mage for our customers. So, you know, we're not on a breeding deal, where the numbers get real inflated and the math gets difficult. 

We focused a lot on 2-year-old fillies this year. Ironically Mage is only one of two colts we did and we're really excited about our upcoming fillies. We've got one out here with Pete Eurton, and then we've got one headed to Bob Baffert, another one headed to Christophe Clement, another one going to Brad Cox, all out of top sires—Quality Road  , we have a Medaglia d'Oro  , Uncle Mo  . I'm sure I'm missing one or two in there. ... We're just trying to really keep the quality bar high and show that our program is about playing in the top level of racing.

MW: Have you seen greater interest in participation because of Mage and obviously because of Country Grammer a year ago?

BD: Country Grammer was the validation. We return now 20x on cash on Country Grammer. And that's not counting the equity value that they still have. And then of course, future racing. ... We took very painstaking development to build an actual wallet inside the app. So when we get earnings for horse wins, and then there's a period of time that the earnings come in, it's not instant. But once we get the earnings in, we post the financial statement. And the money is sitting there in your wallet waiting for you to pull it out or reinvest it or whatever you want to do. You can just sit there. I think we've distributed now I want to say about $1.3 million. We're about to go out for another fundraising round. And that's one of the big ones that gets a great reaction. Because so many people just think it's hard. I don't mean to say it's not hard, but so many people just think there's no way we had any returns and we've actually had some pretty fantastic returns. And so that definitely spurred on putting all of this money back in Commonwealth.

The Kentucky Derby, that gets everybody's attention, particularly the casual fans. Our average age is trending down I would say because of Mage. I think racing is somewhere in the 50s, our average age right now is about 36. And that's been trending down over the last month. 

MW: How did you get into racing?



BD: I had always been a horse racing fan. The first part of my career was mergers and acquisitions and corporate strategy. ... I moved to Baltimore for my first job out of school. And I was in a big analyst group. So they would hire like 20 people out of school every year. And so they had, you know, 40, 50 people across a few different classes that were under the age of 25. And we would all book out this huge section at Pimlico Race Course. ...  I went to three consecutive Preakness: Bernardini, Curlin  , and Big Brown  . So I got the bug there. Went to New York, went to some racing at Belmont Park. I was only there a couple years, and then I went to San Francisco and I was there almost 10 years. I was the guy dragging all my friends to Golden Gate Fields. ... It was just fun. I didn't know anything at that time. I didn't know how to bet on trainers. I didn't know how to bet on jockeys. I didn't know anything. I was just there having a good time. And I thought it was such a cool place. ... And then I moved to L.A. and kept going to Santa Anita Park just on my own time for fun bringing friends out there. 

MW: Why is it important to Commonwealth to bring not only new owners to the sport but younger owners who are attracted to different ownership models?

BD: We don't lead with charts and ROI and stuff. I mean on some of our horses, we've got to because it would really, really look good. But our job is almost to make people forget that they've invested. That's really what we're trying to do. That's true for golf as well. If you go out to a golf tournament, meet your player, you start to care less and less about the ROI. If there is ROI fantastic, all the better. I equate it sometimes with going to Vegas; you know you kind of have your gambling kitty and if you walk away with a weekend of fun. You didn't make any money. Just had a great time. ... If (fans) leave having had a ton of fun and made some friends and possibly gotten into the winner's circle, it makes their whole year. We really liked that about the kind of younger, less sort of horse racing-only crowd.

I think it injects new capital into the sport, it injects a group of people. ... So I think as you skew younger, you get into what I call the Big Day Out crowd. These are people that want to go golfing with their friend, they want to go to music festivals and they want to take weekend trips with groups of people. And so I think that crowd really brings a lot to the table for horse racing and injects a lot of energy. ... The sport could really benefit from having a bit of that energy, a new perspective, and then of course, trying to go younger because it ensures the future.

MW: There are similarities between horse racing and golf. What was the appeal of getting into golf?



BD: Early, early on, when we first put up the Commonwealth social media and we were getting followers, we would look at who they are, click on their profile and (co-founder and head of racing Chase Chamberlin) and I immediately noticed probably 80% of the people that followed in their most recent six posts, they had golf in there somewhere. A group of people at the racetracks and the very next post, a foursome on the golf course. And so that was kind of where the genesis came from. 

MW: Do you plan on branching out into other sports? 



BD: So that's really been my vision for Commonwealth and quite frankly, why we call it Commonwealth. It's the reason we didn't say something that was explicitly horse racing because we wanted it to be about sports and our kind of initial thought was we're going to use our common wealth to compete in the sport of kings. ... We've had some offers to go in on minor league baseball teams, basketball teams, so we've got potential sports teams on our horizon. I'm talking to a group that is putting together a LIV golf tour for par threes. So they want to build a national network of really high-end par-three golf courses under the lights. They want to do two-person basketball teams and have million-dollar purses. And so they want us to crowdfund a team that would be all celebrity driven. You're probably familiar with The Match, those golf events. They basically want to do The Match but make it a big high-stakes money game and have it be Pro Am where the Pro is actually earning money and the celebrity amateurs maybe money for charity or whatever the case.

MW: If you're looking five, 10 years down the road, what does Commonwealth look like?



BD: That's a good question. And I hope in five years we're in let's just say five sports to keep it easy. I would like us to have just a huge, huge community of people, and events all over the country. I mean, we're already doing events, monthly or more all over the country. And so if you expand sports, five- or10-times, our user base, there's no reason not to think we've got two or three events happening across the country every month, activating huge groups of people. 

Another thing I've got my eye on...all of these private equity funds. They're buying into all the teams. ... But we've gotten discussions with some of the people, some of the big private equity groups. ... That would probably be something that's out there in that 10-year plan, possibly sooner. But I don't think we're ready for that in terms of the next handful of years. 

Across the next five years, if we can get to five to seven sports, an audience—throwing a number out there—250,000 to a million sports fans, we're going to be having a ton of fun, we're going be building a very valuable business. And I think shaking up a lot of the sports world. And that would just be a dream come true. 

MW: Whom would you say is your biggest competitor in the space?



BD: I think of the broad sports players. And to be totally honest, there aren't that many of them that have built any technology. There's a lot of early-stage businesses that are talking like I was just talking about the five- to 10-year plan. And a lot of them announce and launch and then they go quiet for a while because they're dealing with SEC stuff or technology hurdles. 

There's one company that just launched in Europe. It's called FANtium. I think they're taking the closest tack in terms of technology ... There's another one that just launched out of San Diego called Finlete. They're doing minor-league baseball players, and I think have a pretty sharp team. There, they have some technologists involved that are, I would expect, to be building some interesting technology. 

And then there's this whole cohort of companies out there and one of them is called Mojo. They call themselves stock markets for athletes. And there's a handful of others that are doing that. But it's not equity. You're not actually involved in the athlete. It's effectively like index fantasy sports. We kind of "buy" into an athlete, you're just buying into their index, and as the player plays better, your ownership goes up in value and they don't think it goes down in value, which is cool by the way. I think it's a neat idea, but they're gonna lack the access and the real direct impact in the sport. ... In terms of messaging and consumer attention, I think they would splinter that a little bit for us. 

I think long term for us, we'll have vertical competitors. MyRaceHorse is clearly going to be our horse racing competitor. ...  But I'm not seeing a lot of companies out there that are positioned the way we are to go really fast and cover a lot of ground and do it efficiently, which is I think what our value is going to be over these next two or three years that we're going to be able to do it pretty seamlessly.