Check us out in the Daily Racing Form (excerpt below).
From the traditional partnership model of Thoroughbred ownership, which is intended to spread out the reward and risk in the game, various other models have evolved in recent years. Companies such as MyRacehorse offer micro-shares in stock, and groups such as the Churchill Downs Racing Club and other track-affiliated organizations offer a chance to buy in to the “experience” of ownership.
Joining the fray is SportBLX Inc., a financial technology company that has built a marketplace for various sports assets. SportBLX Thoroughbreds has aspects similar to other new horse ownership groups, such as a low buy-in into the ownership experience, but has put its own twist on the enterprise by envisioning its members as buying into the entire life of a horse, including potential breeding and bloodstock revenue.
The company’s initial portfolio of four offerings also offers investors a chance to get on the Kentucky Derby trail with a share in Max Player. The colt has won 2 of 3 starts, including the Grade 3 Withers Stakes on Feb. 1 at Aqueduct. He is pointing to the Grade 2 Wood Memorial on April 4, where he could punch his Derby ticket.
“We are excited to share Max Player with fans that want the dream of owning a horse that has aspirations for the classic races this summer,” said Joe De Perio, president of SportBLX and co-founder of SportBLX Thoroughbreds. “We hope he continues to improve. He has become sharper in the mornings, and we will look for him running his race at the Wood Memorial.
“Knock on wood . . . hopefully the winner’s circle photo is one of those wide shots with a number of our shareholders in it.”
SportBLX enables fans and investors to purchase shares in sports assets via an online platform, including revenue-share interests in player earnings and equity interests in teams. The company partners with existing brokers/dealers that distribute the securities. With offerings in basketball, baseball, soccer, and golf, De Perio hopes fans of those sports will become intrigued with racing and that SportBLX Thoroughbreds will bring new fans and owners, particularly young ones, into the sport.
“Horse racing can be a little bit daunting today if you’re not involved and you don’t understand it,” he said. “If we can make it tech-enabled and easy, we should be able to migrate a lot of” investors.
SportBLX owns 13.6 percent of each of the four horses in its current offering. Individuals can buy into the portfolio at various levels, starting at a $92 buy-in, with no mark-up charged. Funds will be used not only to pay expenses and to provide revenue shares for shareholders, but also to purchase additional horses, with options including sales purchases or buying into active runners with partners.
Depending on the amount of capital raised, SportBLX also may buy additional shares in its existing horses, including as much as 25 percent of Max Player. That colt, from the first crop of champion Honor Code, is owned in majority by his breeder, George Hall, whose top runners have included 2011 Belmont Stakes winner Ruler On Ice. Hall is SportBLX’s executive chairman.
The portfolio also includes Swingman, a 2-year-old colt from the second crop of Tonalist bred by Hall; Adara, a 2-year-old colt by the influential late sire Empire Maker; and a yearling filly by Munnings bred by Hall. The yearling filly may be headed to a sale this fall, both to continue diversifying the ownership experience and as a business decision to raise capital to go back to investors or to purchase additional horses.
“I think what we need to do for our company is make sure we’re creating value,” De Perio said. “While it may be fun for us to run her, it may make more sense for us to sell her.”
Embracing that business reality shows SportBLX’s desire to make its racing experience an ongoing enterprise, rather than putting all its eggs in the basket of a single horse or a single aspect of the industry. De Perio visualizes a future in which SportBLX investors participate in the stallion careers of its runners – including Max Player, should he become a stallion prospect with additional high-level victories – active racehorses, and broodmares whose young stock may be sold or raced.
“If you were to buy into a syndicate today, the syndicate is essentially over when the horse is done racing and sold, and the syndicate manager makes a profit,” De Perio said. “What we want to do is create a lasting enterprise people can invest in and own the shares theoretically forever.
“The idea is to keep on going and also give shareholders access to the thrill of the entire life of the horse. What we want to do is bring more people into the sport. Racing is often the most punitive of economics, and there’s a lot more money in breeding, if you do it correctly.”
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