With an app-driven ownership structure, Mage is the people's horse (2023)

But if a certain colt wins the Preakness Stakes on Saturday, securing the second leg of horse racing's Triple Crown, the stage in the winner's circle could be unlike any in the race's century-and-a-half history. , with the gathering of millionaires and grizzled riders likely to be infiltrated by dozens of boisterous 30-something newbies whose micro-shares of ownership in the horse known as Mage were obtained for as little as $50.

In other words, it wouldn't be at all unlike the scene that unfolded two weeks earlier at Churchill Downs, where Mage, an easily raced 15-1 shot with a charming back story and unusual ownership structure,beat 17 rivals to win the Kentucky Derby. In the chaos of the winner's circle when they finally lined up everyone with a Mage chip, the photographers who took the traditional victory shot may have had to switch to a wider lens.

"It looked like the cover of 'Sgt. Pepper's," joked Ramiro Restrepo, one of the controlling owners of Mage, of the resulting image, with its horde of cocktail-wearing, baseball-cap-wearing investor bros numbering more than 100. (In fact, the collage on the front of the Beatles' "Sgt. Pepper's Lonely Hearts Club Band" contains far fewer faces).

However, it is true that Mage, a true champion of the people, in the most literal sense, is the closest horse racing has to a rock star at the moment and the best chance for a redemptive story for a beleaguered sport that sometimes seems on the brink of to collapse under the weight of horse deaths and doping scandals. Similarsuch as those that occurred in the period before and after the derby.

"That's why I say Mage was like a godsend," said Brian Doxtator, co-founder and CEO of Commonwealth Racing, "the fractional investment platform," which, along with 391 micro-investors who bought through its app, owns 25 per cent . “The timing for our business, our customers and horse racing could not be better. And horse racing needed this. … I think we put a slightly different lens on horse racing. And it is at a critical time for the industry right now.”

There's a mixed, underdog charm to almost every human connection to Mage: His jockey, Javier Castellano, went 0-for-15 with a Derby victory. His trainer and co-owner, Gustavo Delgado Sr., is a legendary jockey in his native Venezuela, where he has won that country's version of the Triple Crown four times but has never finished better than 12th in two previous Derby attempts. Co-owner Restrepo is an outgoing fifth-generation rider with Colombian roots and a knack for going over his budget.

"A great melting pot," Restrepo said of Mage's collective connections after the Derby win.

Just a year ago this week, Restrepo and Gustavo Delgado Jr., the trainer's son and assistant, saw Mage for the first time at a 2-year-old auction held at the Timonium Fairgrounds just a few miles down the interstate. 83 of Pimlico. Narrated by Delgado Sr. not to go over the $100,000 budget, Restrepo and Delgado Jr. decided they could probably come up with $200,000 if necessary, and so stayed in bidding on the horse they desperately wanted until they finally got it for $290,000.

This horse, from the first crop sired by 2018 Kentucky Derby runner-up Good Magic, out of the big brown mare Puca, was Mage. Although the purchase had little impact on the industry at the time (25 horses fetched higher prices at that auction, including one, Hejazi, which sold for $3.55 million), it would change the course of history.

"It was intuition. We had to have it," said Delgado Jr. "I told Ramiro we're going after him and then we'll find out where the money is going to come from."

This budget overrun and the financial struggle that followed is what led the cash-strapped new owners of Mage several weeks later to Commonwealth, a 2019 start-up in the fractional investment space that had had a major breakthrough in 2022, when his horse Country Grammer won the $12 million Dubai World Cup.

When Doxtator and Commonwealth partner Chase Chamberlin agreed to share a quarter of the horse plus their share of two years' worth of annual training expenses, it was time to offer it to the app's users, who numbered around 6,500 at the time. The shares were $50 each, and while shareholders could benefit from both race profits and bolt fees, anyone who knows anything about horse racing understands that far more investments turn out to be flops than Kentucky Derby winners.

But Commonwealth sees its mission less as a micro-investment tool than a community builder. It sells an experience as much as a racehorse. Because his investors had ownership status, they could visit the paddock before the races and, if all went well, the winner's circle afterward.

"People focus on economics, but what we're really trying to do is build a community of sports fans; I call them the 'big day' crowd," Doxtator said. “These are people who invite five of their friends to the course or to a golf tournament. Or it's music festival goers. These are people who are used to [bringing] four or five of their friends. They won't just do it themselves. … We have $50 shareholders in the fold all the time. I hear them say all the time, 'You can't do thatanythinglike that for $50.”

When Mage's offer went live on the Commonwealth app in January, it took just 48 hours for shares to sell. Three hundred and ninety-one users bought, with investments ranging from $50 to $20,000. More than 100 of these Commonwealth investors traveled to the Derby, with seats scattered across Churchill Downs.

"We told them when we came in, 'We can't guarantee anything [about entry].' First of all, this was our first Kentucky Derby, too," Doxtator said. "We didn't know how it was going to work."

In the wild aftermath of Mage's improbable victory, the Commonwealth crowd, distinguished by white "Mage" caps, converged on the winner's circle and initially overwhelmed the security staff. "All these people are coming," Doxtator recalled. "I think [the security guards] finally said, 'Okay, if you have the hat on, we'll let you in.'"

A crowd of excited Commonwealth users, some of whom - and this simply cannot be repeated enough - bought in for a mere 50 bucks, stayed in the winner's circle long enough to take turns kissing the trophy.

Thanks in large part to a brief mention on NBC's broadcast of the Derby, Commonwealth saw more than 6,000 new users sign up in the first 48 hours afterward. Doxtator, 40, and Chamberlin, 32, childhood friends from Kalamazoo, Mich., fielded so many media inquiries that they enlisted another friend to help as a PR contact. Among the many industry calls they received were some from agents from the golf and tennis worlds: In the coming months, Commonwealth plans to branch out into those sports, with PGA Tour rookies Joey Vrzich and Cooper Dossey already signed up. .

Commonwealth was not the first company to offer micro-shares of a racehorse or even the first to win the Kentucky Derby; MyRacehorse had a share of the bona fide champion in 2020. But perhaps due to their youth and backgrounds in tech startups, Doxtator and Chamberlin have found a foothold with a younger, more tech-savvy audience; Doxtator said the average age of a Commonwealth user is 36, decades younger than the average thoroughbred owner, and a new user can go from downloading the app to buying a share in about 90 seconds.

And while the minimum cost to share Authentic through MyRacehorse was $206, Commonwealth made sure to aim lower with Mage.

"We're trying to democratize this sport," Doxtator said.

Throughout the conflict industry, people have noticed. The Dalmore Group, the brokerage through which Commonwealth offers its investments, said in a statement that Mage's Derby victory "sent ripples through the horse racing community."

"This democratization of the sport has the potential to make horse racing more inclusive," Dalmore said. “Mage's victory in the Kentucky Derby is a testament to the power of fractional ownership and its potential to revolutionize the horse racing industry. ... The sport of kings is no longer reserved for the privileged few."

Meanwhile, for the 391 Commonwealth users who bought Mage, the Derby win resulted in a payout of $95 for every $50 they invested on top of their initial investment, far less than the same $50 would have earned them in the first lap. betting window where a winning bet of $2 paid $32.42. But based on the stallion offers Commonwealth is already making for Mage once his racing career is over, Doxtator estimates those $50 shares will eventually be worth at least $500 each.

And yet money is only a small part of the draw. Do you see a horse, your horse, get to the finish line ahead of the pack and then go down to the winner's circle to celebrate another Triple Crown jewel and kiss another trophy? Whether you're interested in a gazillion or just 50 bucks, something like that would be invaluable.