Sports Investment Firm Launches with Racing Stable

The landscape of Thoroughbred ownership is changing with the recent announcement of two ventures that sell shares in horses in a similar way one would buy shares in a company's stock or a mutual fund.

MyRacehorse.com, an initiative founded by Spendthrift Farm owner B. Wayne Hughes, has started offering micro shares in individual racehorses that are essentially their own limited liability corporations. Investors can buy as little as 0.1% of a horse for prices ranging from $95 to $320 per share.

Spendthrift Adds New Twist to Ownership with Wayne O

Another company called SportBLX is taking a different approach with the same concept but its investment opportunity takes the mutual fund approach.

SportBLX is offering shares in Magdalena Racing Corp., a new racing entity that will be operated by trainer Ken McPeek. Because investors are buying into Magdalena Racing, they will be entitled to potential dividends from any purses won by all the racing stock or any revenue from private or public sales or stallion deals.

George Hall, co-founder and executive chairman of SportBLX, said his company's goals to revolutionize fan engagement and investment opportunities are a natural fit with Thoroughbred racing. Hall knows the racing industry well as the owner of 2011 Belmont Stakes (G1) winner Ruler on Ice and 25 other black-type winners.

"Ultimately, the goal is bring the thrill of Thoroughbred ownership to more people around the world," Hall said. "There's nothing quite like watching your horse come down the stretch. With SportBLX's expertise in financial technology and security design, we can make our contribution to further racing.

"We are working on a number of sports, but the horses were easier to negotiate with than the athletes," Hall joked when asked why SportBLX launched its platform with a Thoroughbred racing stable. "Kidding aside, our team is extremely busy on basketball, golf, soccer, and baseball. We expect to launch basketball shortly, and people from the Lexington area will recognize some of the athletes."

Hall said they approached McPeek because he's been an innovator through the development of a Thoroughbred racing entries, results, and news app called Horse Races Now. Also, Hall said McPeek has a long history of accurately assessing ability in young horses, successfully conditioning them as a trainer, and running his stable with the skills of a top CEO.

McPeek said he immediately recognized the potential in Sport BLX's proposal.

"You are spreading your risk and when you do that the chance for a return is better," McPeek said. "We're not guaranteeing huge returns but I have done that in the past with Curlin  and Take Charge Lady. From my perspective, it gives me access to more capital and the opportunity to buy into pedigrees that are stronger stallion prospects and better female families with fillies, who will have more residual value."

McPeek bought Curlin, a son of Smart Strike out of Sherriff's Deputy, for $57,000 out of the 2005 Keeneland September Yearling Sale. The colt went on to earn more than $10.5 million as a racehorse and earn two Horse of the Year titles. He now stands at stud at Hill 'n' Dale Farms and is ranked fifth on BloodHorse.com's 2019 general leading sires list.

Take Charge Lady was a $175,000 yearling purchase at the 2000 Fasig-Tipton Kentucky July Yearling Sale. McPeek bought and trained the filly for Select Stable, which won eight graded stakes with her and was runner-up in seven others. The daughter of Dehere went on to sell for $4.2 million as a broodmare prospect at the 2004 Keeneland November Breeding Stock Sale and is the dam of grade 1 winners and successful sires Take Charge Indy and Will Take Charge .

McPeek noted that he will continue buying horses for his established clients and continue racing those clients' horses under the McPeek Racing banner.

According to the term sheet for the Magdalena Racing offering, a total of 200,000 shares will be offered at $100 per share. An investor has to buy a minimum of 10 shares, so the investment is $1,000. Shares can be sold or traded but an investor must hold onto them for at least a year first. Shareholders that own 5% or more of the Series A shares (10,000 shares) also have a right of first refusal on the sale of any individual horse out of the stable.

"Our structure benefits from the full life cycle of the horse," said Joe De Perio, co-founder and president of SportBLX. "We can even spinoff individual horses into their own tradable entities if they are emerging champions or stallion prospects. All that being said, the (traditional) racing partnership model can execute its business on our platform and still deliver its value-add while enhancing the partners' experience."