The 2020 Kentucky Derby was not only unusual in its timing — the first Saturday in September instead of May — and also in the ownership of the winning horse, Authentic.
B. Wayne Hughes
The majority owner (86.5 percent) is B. Wayne Hughes. He lives in Lexington, having purchased Spendthrift Farm in 2004, and has invested in a new app and company called MyRacehorse. Michael Behrens is the app creator and founder of MyRacehorse (MyRacehorse.com). MyRacehorse owned a 12.5 percent stake in the Derby colt and sold micro shares of Authentic ownership to 5,314 people — almost 1,000 of whom signed up on Derby day.
“It was unbelievable,” Behrens said. “Surreal doesn’t begin to describe it.”
The thousands of investors earned bragging rights as owners of a Kentucky Derby-winning Thoroughbred — as well as potential dividends on the horse’s on- and off-track earnings (after accounting for its purchase price, training and maintenance). But mostly MyRacehorse owners are investing in the experience itself. “It’s not just about giving you equity stake in a horse — yes, that’s fun — it’s giving you a behind-the-scenes experience,” Behrens said.
The team behind 2020 Derby winner Authentic includes thousands of owners who purchased micro shares in the horse through MyRaceHorse. Above are, from left, (could not identify), MyRaceHorse founder Michael Behrens, Spendthrift general manager Ned Toffey, Jill Baffert, Jack Wolf of Starlight Racing, trainer Bob Baffert, jockey John Velazquez, Spendthrift president Eric Gustavson, bloodstock agent Donato Lanni, and Mark Toothaker, head of stallion sales at Spendthrift.
The MyRacehorse app provides shareholders with access to updates, interviews, videos, stories and stats on everyone and everything involved with a particular horse. It’s an immersive, experiential investment.
“Mr. Hughes has always been an innovator in every business venture,” said Ned Toffey, general manager of Spendthrift Farm. “He is not afraid to think big. He believes [MyRacehorse] is something that has the potential to be huge.”
Billed as “the sport of kings,” horse racing has always been an expensive endeavor. Syndicates have been around for decades, with a dozen or so people joining together to split the costs — and the potential profits — of owning a racehorse. “We’re taking that idea and magnifying it times 100,” Behrens said. “Because of digital technology, it’s as easy to distribute to thousands of people as it is to one.”
Michael Behrens
Growing up in Southern California, one of Behrens’ favorite forms of entertainment was going to the track at Santa Anita, 20 miles northeast of Los Angeles. Behrens’ first Kentucky Derby experience was a surprise trip from his wife. “The coolest gift ever,” he said. Like many fans, he doesn’t recall the exact year, but he remembers the winner — Street Sense. (That would have been 2007.)
He soon began brainstorming ways to make it easier for more people to get involved with the sport. “The more research I did, the more I realized ownership perfectly captured everything that made racing so cool,” he said.
In Japan, Behrens found that racing clubs help create a community around horse racing and lend “a vibrancy when [people] go to the races.” In Australia, “the numbers are ridiculous how many people own a racehorse,” he said.
Behrens, who previously worked as chief marketing officer of Casper Sleep Inc., launched MyRacehorse in 2017. While there were several hurdles to overcome in terms of how horse racing and Thoroughbred ownership are regulated in the United States (qualifying with the Securities and Exchange Commission was “a fun problem to solve,” he said), MyRacehorse is set up to offer real shares of “stock in a particular series of an LLC that has been validly issued in compliance with applicable securities laws,” according to its website. “We establish a series for each horse offered, and stock in that series is what’s being sold.”
Behrens reached out to Toffey in early 2019 to present the concept.
“We really felt, at that point, that this was something Mr. Hughes would be interested in,” Toffey said. “We were very impressed with all of the work Michael had done.” Hughes was indeed interested, and he invested in MyRacehorse. Spendthrift is also home to several horses in the MyRacehorse portfolio.
Spendthrift Farm dates back to 1937, when the late Leslie Combs II made Spendthrift a household name in the breeding industry, according to Toffey. Seattle Slew and Affirmed, two Triple Crown winners, retired to Spendthrift back in the day. Now, with 55 employees, Spendthrift encompasses 1,200 acres in Fayette County. About 85 mares live on the farm, all belonging to Wayne Hughes or his daughter, Tamara Gustavso, and her husband.
Spendthrift stood 24 stallions last year and bred 2,800 mares that came to the breeding shed. “That’s the most of any farm in Kentucky and in North America,” Toffey said.
The sire of Authentic, Into Mischief, was bought and named by Spendthrift Farm. Starting out at a relatively modest stud fee of $12,500 in 2009, Into Mischief’s 2019 fee skyrocketed to $175,000. “His stud fee will increase again this year,” Toffey said. “He’s been an incredible sire for us.”
Authentic will also stand at Spendthrift. “We’ve not made a decision when he will retire to stud,” Toffey said in late September but speculated that Authentic will be breeding mares in 2021.
Behrens, who moved with his family to Lexington in early November, is thrilled with his partnership with Hughes and the team at Spendthrift. “Spendthrift was ridiculously generous,” he said. “On the biggest stage in the world, he was generous enough to say, ‘You go [and race] in your silks.’”
The MyRacehorse silks are black with a white outline of a horse. “Nobody has asked, but it’s a horse’s head with a road in the middle,” Behrens said. Signifying, “we’ll take you on a journey like never before.”