Prior to this year's Keeneland September Sale, John Stewart was largely unknown in racing circles. That changed when Stewart, the founder and managing partner of MiddleGround Capital, a private equity firm, spent $8.425 million on 13 horses. He was just getting started. Stewart returned to the fall breeding stock sales at Fasig-Tipton and Keeneland where he once again opened his check book, purchasing 11 mares and weanlings for a total of $17.35 million. The list included the two-time GI Breeders' Cup Filly & Mare Sprint winner Goodnight Olive (Ghostzapper). Stewart spent $6 million on the Eclipse Award winner and plans to race her in 2024.
So what caused Stewart to get started in racing and why has he been so aggressive when it comes to his purchases? What are his plans and goals going forward? Is he doing this just to have some fun or does he believe his operation can be profitable?
Those were among the questions we asked Stewart when he was the Green Group Guest of the Week on this week's TDN Writers' Room podcast presented by Keeneland.
“If you get to know me, you'll find out that I don't do anything halfway,” Stewart said. “I bought my first horse last year after I had gone through a divorce. When I was married, my wife never wanted me to get into the horse racing. I always had a passion for it and went to the races and enjoyed it. And then I got divorced. So I was like, 'Okay, I'll buy a racehorse.' And then I started learning more about the industry. When I get involved in something, I want to research everything. I want to know everything, and I want to know the history. I've always respected the industry and how important it is to the Kentucky community and to the economy of the state and especially to the Lexington area. As I've been able to get successful in my career with my business, it affords you the opportunity to get involved in things that you're passionate about and try to make an impact for people other than yourself.”
He said that with the ambitions he has for his racing stable and future breeding operation, buying just a handful of horses was not an option.
“Anything I do, I'm going to do all the way,” he said. “My goals are to start a breeding and a racing operation and you need numbers to do that. You also have to be lucky at the end of the day to win these big races. With all the horses that are in the Kentucky Derby, they're all competitive horses and have had accomplished records. But you still need luck. So you can't rely solely on just buying the best. You also have to have numbers because things happen, like injuries. So I decided that I needed more bullets in the chamber. Everybody was advising me to stick with buying fillies and mares because they're easier to make money with. But if you're going to have a racing program, you have to have colts. So that's why we really came out in a big way at Keeneland. We bought a lot of colts because I wanted to start getting the pipeline full of horses for racing.”
Stewart isn't the first newcomer to make a huge splash at the sales, coming in from out of nowhere to spend millions. Many who have done so have failed and disappeared from the sport within a short period of time. He said that's not going to happen to him.
“I'm going to make this profitable,” he said. “This won't be a hobby. I'm going to trust horsemen to run the business and let them make the decisions. Sometimes when you're an accomplished business person, you want to control every aspect of everything. That may be the way others go about it. I'm going to be involved, but I'm going to trust people, people that have been in the industry, people that know how things work to run my day-to-day operations of the business. We have a very specific strategy of what we're trying to do. I'm going to be very involved strategically in what we're doing. I'm going to be involved, but I'm going to trust people that have been in the industry, people that know how things work, to run my day-to-day operations of the business. I'm not going to be micro-managing my farm manager. I'm not going try to tell him what to feed the horses. I'm not going to be micro-managing the trainers and try to tell them this is a race I want to run in and this is where I want to be. In my career, I've always surrounded myself with people that I think are very smart. And then I try to empower them to do the job that they've been hired to do.”
Elsewhere on the podcast, which is also sponsored by the Pennsylvania Horse Breeders Association,https://www.kentuckybred.org/https://www.nyrabets.com/ West Point Thoroughbreds, WinStar Farm, XBTV.com and the Kentucky Thoroughbred Owners and Breeders, the team of Zoe Cadman, Bill Finley and Randy Moss discussed the 60 Minutes story on horse racing, whether or not it was fair and if could be just one more thing that erodes peoples' confidence in the sport. The podcast was recorded three days before GI Kentucky Derby winner Rich Strike (Keen Ice) was to be sold at the Keeneland November sale. What will he bring? Finley guessed $500,000, while Cadman and Moss both guessed $1.2 million. Still another topic of discussions was the decision to run the 2025 Breeders' Cup at Del Mar and why has Churchill Downs seemingly been taken out of the running as a Breeders' Cup host site. Cadman speculated that Bob Baffert's ban at Churchill Downs may a reason why the Breeders' Cup is apparently reluctant to go there.
Click here to watch the podcast and here for the audio version.
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