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Paulson: I Got The Horse Right Here...


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PAULSON: I GOT THE HORSE RIGHT HERE...

The owners of the horses entered in the 117th running of the Kentucky Derby, scheduled for May 2 at Churchill Downs in Kentucky, are a varied lot. They include an American CEO, a successful rapper, and a rambunctious Japanese entrepreneur. Allen E. Paulson, CEO of Gulfstream Aerospace and half-owner of Arazi, can count on a close duel with Tomonori Tsurumaki's A.P. Indy. And don't count out Hammer's entry, Dance Floor. For the skinny on their run for the roses, read on:

A CEO WHO'S USED TO MOVING FAST

Allen E. Paulson has been a godsend to the Thoroughbred horse industry. Flush with cash after taking his Gulfstream Aerospace Corp. public in 1983 and then selling it to Chrysler Corp. in 1985, Paulson has pumped more than $150 million into building his breeding and racing operations while continuing to run the top business-jet maker in the U.S.

Unfortunately for the 69-year-old Iowa native, his timing was less than perfect. The bulk of Paulson's expensive horse-buying came at the horse market's peak. But he admits to no regrets, likening himself to an oil wildcatter: "If you can't afford to drill more than one hole, you shouldn't be in the business." Paulson, who will step down from Gulfstream in June, figures that he improves his chances by owning lots of horses.

By that logic, his odds must be pretty short. About 150 of his animals are racing in the U.S. and Europe, while 250 more yearlings and foals are maturing at his Versailles (Ky.) breeding center, Brookside Farms. But ironically, his most famous horse, Kentucky Derby favorite Arazi, came by way of the auction barn.

Paulson bought Arazi as a weanling for $350,000 in 1989 when Buffalo Bills owner Ralph C. Wilson was selling off his equine holdings. "I liked his pedigree," says Paulson. But he didn't immediately fall in love with the horse.

In fact, it wasn't until Arazi started piling up wins on the French circuit last year that Paulson realized just how special the colt is. By then, Anthony Stroud, racing manager for Sheikh Mohammed al Maktoum of Dubai, was agitating to buy a piece of the colt. Paulson eventually accepted $9 million for 50% of Arazi.

Despite the hefty profit, Paulson may regret the deal. Maktoum and Paulson disagree on where the horse should run as a three-year-old before retiring to stud. "I'd like to see him win the Triple Crown," says Paulson.

Maktoum has other ideas. He's bent on winning the Epsom Derby in England, scheduled for June 3 this year, three days before the Belmont Stakes, the third leg of the Triple Crown. A showdown seems inevitable if Arazi wins at Churchill Downs. "My own preference is for Europe," says Stroud.

The decision may lose its urgency if Arazi turns out to be a dud in Louisville. Of course, Paulson won't even consider the possibility. His wife, Madeleine, jokes that her husband would be quite willing to let the horse eat dinner with them. Paulson doesn't deny it. So if May 2 brings a win, his wife may have to set another place at the table.Chuck Hawkins in Versailles, Ky., with Richard A. Melcher in London


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