The old adage “if you want to lose money, buy a horse” may still ring true. But in the case of the world’s richest horse race on turf, it might have been a case of if you want to make money, buy a slot in The Everest.
The unique concept involves a mixture of 12 businesses, partnerships and individuals – ranging from the ASX-listed Tabcorp to self-made Chinese billionaire Yuesheng Zhang and the worldwide Godolphin racing operation, backed by the ruler of Dubai Sheikh Mohammed bin Rashid Al Maktoum – paying a minimum $600,000 per year for a position in the race.
They then negotiate high stakes deals with the owners of horses they want to represent them, splitting prize money and associated benefits like the diamond-laden trophy, one of the most expensive pieces of sporting silverware in the world.
In The Everest’s inaugural year in 2017, the total prize money was $10 million. On Saturday at Royal Randwick, the 12 horses will be competing to split $15 million.
While V’landys, Racing NSW’s chief executive, and The Everest’s founders argue it’s not just a race for the rich – mum-and-dads can have a horse good enough to be signed up – those with deep pockets have found a blue chip investment.
So in demand has a position in The Everest become, one of the original 12 slot-holders, Greg Ingham’s GPI Racing, has leased his position for the last two years.
Sources familiar with the negotiations claim on both occasions the slot has been leased for more than the $600,000 he was due to outlay, making money for nothing more than having the foresight to sign up.
“That’s the beauty of The Everest,” said Aquis Farm’s Australian managing director Shane McGrath, who runs the operation for the wealthy Hong Kong-based Fung family, one of the slot-holders.
“I’d love to see non-horse racing commercial businesses coming in as well. I don’t know whether it’s a Coca-Cola or an Audi, but there’s people that are going to want to be involved.”
Unapologetically, V’landys has made the race specifically for Sydney.
It’s tailored for sprinters, the focal point of Australia’s thoroughbred breeding industry, and plays on the power and patience of the people involved. When is the right time to lock in a horse? How hard a bargain do you drive at negotiating knowing other rivals might be trying to lock in the same horse?
The details of the deals are almost exclusively kept out of the public domain, but slot-holders often reduce their risk while businesses can include non-racing sweeteners into contracts.
The Herald has been told some deals allow slot-holders to get the first $600,000 back in prize money their horse may earn, splitting the rest with horse owners.
The prize money percentage breakdowns also vary depending on where the horse may finish. This year the winners will share in $6.2 million while it will still be $450,000 for last place.
I knew The Everest was going to cause significant controversy and publicity, and it did
Businesses such as Tabcorp, The Star and thoroughbred auction house Inglis use their slot as a marketing tool, signing up a horse often months out from the race and driving publicity to justify their outlay.
But not all deals go to plan.
One slot-holder was so convinced in a previous year it had struck an agreement with the owners of its desired horse they were drafting a press release. Later that night another slot-holder announced on social media they had secured the same galloper, which went on to eventually win.
“I knew The Everest was going to cause significant controversy and publicity, and it did,” V’landys said. “People start talking about it months before the race because if a horse performs well the slot-holders are ready to sign them up.
“It’s a bit like if a great rugby league player comes along, you want to sign them up as quick as possible.”
On Saturday, one of Australia’s great races, the $5 million Caulfield Cup, will also be run in Melbourne.
This week, it has barely created a ripple in Sydney as The Everest’s marketing machine was concerned by a last-minute deal for Haut Brion Her to get into the race and another where Golden Slipper winner Farnan was withdrawn.
“Whether you’re selling a horse or buying a horse or selling a house or buying a house, you don’t leave any stone unturned and you take it extremely seriously,” said bloodstock agent James Harron, the race’s most successful slot-holder in the first three years.
“There’s a lot of money at stake if you get it wrong, and there’s a lot to be gained if you get it right.”
Said Whitby: “The first year was a bit rough, it was like a sparring match and no one really knew how to go about it. This year has been fantastic and in a few years this will be a $20 million [prize money] race. You can take that to the bank.”
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Adam Pengilly is a Sports reporter for The Sydney Morning Herald.