Archive for the ‘Breeders' Cup’ Category

By Ray Paulick
Voting begins tomorrow (July 1) on the six open board seats for the 13-member Breeders’ Cup board of Directors. Candidates must be currently serving on the 48-person board of Members and Trustees to be eligible to run. Individuals from that group wishing to put their name up for election have until 5 p.m. today to notify Jim Philpott of their intention. The Paulick Report has learned who is expected to be on the ballot for that election.

Voting takes place electronically July 1-8 and is being handled by the same company, TrueBallot, Inc., that conducted the recent election of Members and Trustees by Breeders’ Cup nominators. Eligible to vote are elected Members and Trustees, Founding Members, Breeders’ Cup president Greg Avioli and past presidents James E. Bassett III and D.G. Van Clief Jr., according to the Breeders’ Cup election website.

Eligible voters also have the option to cast their vote at the annual meeting of Members and Trustees in Lexington on July 9. Curiously, the election rules approved by the board of Directors allow someone who may have voted electronically to change his or her vote if he or she attends the July 9 meeting and wishes to vote in person.

A final method of voting is the proxy, but for the first time any Breeders’ Cup Member of Trustee who is holding a proxy vote for someone else must declare who that individual is. Transparency of proxies is a good rule so that nominators in future elections can weed out individuals who are simply running for the board of Members and Trustees as “rubber stamp” candidates. If an individual doesn’t feel well enough informed about voting for the board of Directors, then that person shouldn’t be elected in the first place. In past elections for the board of Directors (before electronic voting was in place) there was a large number of proxy votes, but they were never identified.

The six open seats include four individuals who are expected to run for re-election: Reynolds Bell Jr, G. Watts Humphrey Jr., Robert T. Manfuso, and Don Robinson (appointed earlier this year to the seat vacated by B. Wayne Hughes, who resigned). The two-year board of Director terms for Don Dizney and Tracy Farmer are expiring, but neither is eligible to run because they did not get re-elected to the board of Members and Trustees.

The other seven Directors whose terms expire in July 2010 are: Helen Alexander, Antony R. Beck, William Farish Jr., Terry Finley, R.D. Hubbard, Roy Jackson and Satish Sanan.

The board tilts heavily to what I have referred to in the past as “status quo” or “old guard” members that has kept the power in the hands of the father and son duo of Will and Bill Farish. For years before Breeders’ Cup elections were held, the Breeders’ Cup Executive Committee was run by Will Farish and also included G. Watts Humphrey Jr., a longtime partner in the horse business, and Jim Philpott, an equine attorney closely associated with Farish’s Lane’s End Farm. When elections began in 2006, the “old guard” was well organized and maintained control of the board of Members and Trustees that elected the board of Directors. The latter board, in a series of meetings before its first meeting, “decided” that Bill Farish would be the Breeders’ Cup chairman, keeping power in the family.

Opposition has gradually mounted since then, through a series of controversial decisions like the one made (and quickly reversed) last December to eliminate the Breeders’ Cup stakes supplement program. The recent vote by nominators for the board of Members and Trustees, in which current Directors Don Dizney and Tracy Farmer, were voted out, could help shake up the board of Directors and bring on different points of view.

Let’s hope so.

In addition to the four incumbents listed earlier, it’s expected that the following individuals will run for the board of Directors: Tom Ludt of Vinery; Clem Murphy of Coolmore/Ashford; Richard Santulli of Jayeff “B” Stables, John Sikura of Hill ‘n’ Dale Farm, Olly Tait of Darley USA, and Duncan Taylor of Taylor Made Farm and Sales Agency.

Those are six very strong candidates who bring a diverse set of skills and industry and/or outside business experience. Santulli and Sikura were rebuffed in last year’s election, which outraged many breeders who recognize both men for their intellect and commitment to this industry. Santulli has an extraordinary reputation in the business world, and Sikura is widely respected as a man with, as the saying goes, "skin in the game," and a no-nonsense approach to getting things done. Murphy and Tait represent the two largest farms with the greatest global vision and would be a great asset to the board of Directors as the Breeders’ Cup seeks to expand internationally. Ludt has demonstrated independence and a common-sense approach to analysis and problem solving in various board positions, and Taylor is one of the brightest marketing people in the Thoroughbred industry today who has a compassion  and drive to see the industry  reconnect with the public.

If those six declare their candidacy, as expected, and are elected to the board of Directors, the Breeders’ Cup will be in very good hands. 

Copyright © 2009, The Paulick Report

Savvy businesses recognize value. Advertise in the Paulick Report.

Support the Paulick Report. Make a donation today.
|
Sign up for our Email Flashes to get the latest news, analysis and commentary from Ray Paulick

By Ray Paulick
Jess Jackson, the principal owner of star filly Rachel Alexandra, said during a New York Racing Association media teleconference on Wednesday afternoon he has no intention of ever running the Kentucky Oaks and Preakness winner on “plastic,” or synthetic racetracks, and ruled out any chance she would compete in this year’s Breeders’ Cup World Championships.

However, Jackson did say that if the daughter of Medaglia d’Oro remained healthy there was a very good chance she would remain in training in 2010 as a 4-year-old, with the Breeders’ Cup at Churchill Downs a year-end goal.

Jackson and Rachel Alexandra’s jockey, Calvin Borel, answered a wide range of questions from the media in advance of Saturday’s Mother Goose at Belmont Park, in which Rachel Alexandra will be heavily favored. NYRA is offering free admission for women and giving away 10,000 pink bracelets embossed with Rachel Alexandra’s name in conjunction with the announcement by Jackson and his wife, Barbara Banke, to give a portion of any prize money won by  the filly to the Susan B. Komen Race for the Cure for breast cancer.

While he gave no indication where Rachel Alexandra would surface following this weekend’s race against fellow 3-year-old fillies, Jackson said he wanted to run her against colts again, and included the nine-furlong Haskell Invitational at Monmouth Park Aug. 2 and 10-furlong Travers at Saratoga Aug. 29 among the possibilities for her this summer. Each race for 3-year-olds carries a $1-million purse.  He also listed as possible starts the $300,000 Coaching Club American Oaks for 3-year-old fillies going 10 furlongs at Belmont Park July 25; the $1-million Delaware Handicap , a 10-furlong event for fillies and mares, 3 and up at Delaware Park July 19; and the $600,000 Alabama for 3-year-old fillies going 10 furlongs at Saratoga Aug. 22. The spacing of her races was important, Jackson said, along with her physical condition.

Jackson said he would love to meet reigning filly and mare champion Zenyatta, but that it would have to happen outside of California. “I would hope we’d meet, but if it’s not in the stars, it’s not going to happen,” he said. “They’re going to have to come east or to some neutral track,” he said. “I’m not going to run on plastic (all of California’s major tracks have a synthetic surface instead of dirt). We don’t need to risk her that way.” Jackson said synthetic tracks tend to favor turf horses and that Rachel Alexandra has proven herself on the dirt. “You can’t predict the outcome of a race on plastic,” he said. “You see horses all finishing in a bunch.” Also, Jackson said the various synthetic manufacturers (Pro Ride, Cushion Track, Polytrack, Tapeta) each produce varying surfaces. “Man is interfering with nature,” he added.

Borel said he is confident the drop back to a one-turn nine-furlong race for Rachel Alexandra will not be a problem after going around two turns in her recent races. “She’s very versatile,” he said. “I’m going to ride that filly with confidence. For me to go out there and not ride her with confidence would be stupid.”

In other news, Jackson, a Californian who is a major contributor to both the Democratic and Republican parties in Kentucky, said he supported recently defeated legislation in Kentucky to bring video lottery terminals or slot machines to the state’s racetracks, though he admitted he “didn’t work hard for the bill because I was back working in California on the wine business. When I support a party or candidate, I do it so they can vote their own conscience. I look at the slots and gambling as an interim or short-term solution. The long term is best served if we can get together and voluntarily form a major league office with a commissioner.”

Jackson also said he “has been approached and am involved in trying to save Santa Anita Park,” which is scheduled to be sold as part of the Magna Entertainment bankruptcy proceedings. The Thoroughbred Owners of California recently confirmed it is planning to bid on the track in a bankruptcy auction. Jackson added that he is considering sending both mares and stallions to his home state in order to improve California’s breeding industry.

Copyright © 2009, The Paulick Report

Savvy businesses recognize value. Advertise in the Paulick Report.

Support the Paulick Report. Make a donation today.

Sign up for our Email Flashes to get the latest news, analysis and commentary from Ray Paulick

By Ray Paulick
For those of you wondering whether I’d gone into the witness protection program following the announcement of election results for the Breeders’ Cup board of members and trustees (where 10 of those elected were recommended here in an earlier analysis), fear not. As one of my mentors in this business often reminds me, family should be a person’s top priority, and I’ve spent the last couple of days carrying out his advice.

Several things stood out when the results were announced on Tuesday. First, I believe they represent a victory for continuing the trend toward transparency and openness for the organization. There should be no turning back to the days of secrecy with how the industry’s money is being spent at the Breeders’ Cup. Minutes to board meetings should be posted on the Breeders’ Cup web site, information about committees and subcommittees needs to be published, and decisions should no longer be made in a vacuum. I believe the board of directors, which has taken steps in the right direction over the last couple of years, has been put on notice in that regard during this year’s vote by nominators.

Second, I believe the results showed dissatisfaction with the status quo. Two members of the smaller operating board of directors, Don Dizney of Florida and Tracy Farmer, were not re-elected to the larger board of members and trustees. It’s that larger board that decides who to elect for the smaller operating board, and to be a candidate you have to be on the board of members and trustees. Dizney and Farmer will be replaced on the smaller board after having been defeated in the election.

Third, the results show the strength of stallion farms and coalitions, something I wrote about last year. I don’t think any one stallion operation has the votes to elect an individual to the board of members and trustees, but several farms working together can do so. And there was coalition building going on prior to and during this election process.

Finally, and perhaps most significantly, the leading vote getter among Breeders’ Cup nominees, Richard Santulli, is the same man rejected by a majority of members and trustees voting for the smaller board of directors last year. I wrote then that the members and trustees made a huge mistake in not electing Santulli to the board. He is a man with great energy, enthusiasm for this industry and great business experience that could be put to extraordinarily good use by the Breeders’ Cup. He is chairman of NetJets and often is mentioned as a potential heir apparent to Berkshire Hathaway’s Warren Buffet. Perhaps the “old guard” on the board of members and trustees voted against Santulli because NetJets dropped its Breeders’ Cup sponsorship, or maybe because he is closely associated with Thoroughbred Daily News Publisher Barry Weisbord, who can be a prickly critic of the status quo. It’s also widely believed that Santulli felt the Breeders’ Cup should have sought executive experience from outside of horse racing when current Breeders’ Cup president and CEO Greg Avioli was given the job in 2007. Putting him on the smaller board could add some discomfort to management.

Whatever the reason, the nominators in this election voiced strong disapproval of the vote to keep Santulli off the operating board. Let’s hope he still has the interest in giving his time, energies and insights to the industry and will submit his name for nomination later this month.

There are six open spots on the board of directors, and if dissatisfaction with the status quo and the old guard carries over into that election, we could have a significant change in philosophy on the operating board. As mentioned, the board positions currently held by Tracy Farmer and Donald Dizney are open because they failed to be re-elected to the board of members and trustees. The other four candidates that are up for re-election are Reynolds Bell, Don Robinson (appointed to fill out the remainder of the term held by B. Wayne Hughes, following the decision by Hughes to resign from the board earlier this year), G. Watts Humphrey and Bob Manfuso.

Bell and Humphrey are closely associated with Lane’s End Farm, owned by William S. Farish, the father of current Breeders’ Cup board chairman Bill Farish. For years, Humphrey and the senior Farish were the guiding force of the Breeders’ Cup executive committee, back when the organization practiced limited transparency and operated under the auspices of a self-perpetuating board.

While the old guard from the Jockey Club (Farish is a Jockey Club member, his father-in-law is chairman Ogden Mills (Dinny) Phipps and his father is vice chairman, Humphrey is a longtime member and former steward, and Bell is a member and current steward of the club) did maintain control in the last board election, their grip on power has been weakened. I expect the slate of candidates from opponents of the status quo/old guard to make a concerted effort to defeat Humphrey and Bell in the upcoming election. Sources say Bell, who does extensive bloodstock work for Lane’s End, has been hand-picked by the Farishes to replace Bill Farish as Breeders’ Cup chairman if Farish serves five years, the limit for a chairman under the organization’s current bylaws. He has served three years in that role.

There will be much more here in the coming weeks on the Breeders’ Cup board election, which takes place during a meeting of the newly elected members and trustees on July 9. Candidates seeking a position on the board have until June 30 to state their intention to run.

Copyright © 2009, The Paulick Report

Savvy businesses recognize value. Advertise in the Paulick Report.

Support the Paulick Report. Make a donation today.

Sign up for our Email Flashes to get the latest news, analysis and commentary from Ray Paulick

By Ray Paulick

(UPDATED JUNE 3 TO REFLECT A CHANGE IN RECOMMENDATION FOR GEORGE ISAACS)

The 25 candidates running for election to the Breeders’ Cup board of Members and Trustees may have different backgrounds, income levels and positions within the Thoroughbred industry, but I think they all share a common thread: a desire to help the Breeders’ Cup grow. All are to be commended for their interest in helping achieve that goal, even if their philosophies do not follow the same path.

There are, however, only 13 positions for these 25 individuals on the board of Members and Trustees, whose principal role within the Breeders’ Cup organization is to elect the 13 members of the board of Directors at an annual meeting, scheduled this year for July 9. The smaller board of Directors makes all major decisions regarding the operations and governance of the Breeders’ Cup and elects a chairman and vice chairman each year. 

So who nominators elect to the board of Members and Trustees is critical in shaping the smaller, operating board of Directors. The six individuals whose two-year terms on the board of Directors expire in July of this year are: Reynolds Bell, Donald Dizney, Tracy Farmer, Don Robinson (who served out the remainder of B. Wayne Hughes’ term after Hughes’ resignation), G. Watts Humphrey Jr., and Robert T. Manfuso. Only elected Members and Trustees may run for the smaller board of Directors.

Fifteen of those running for the board of Members and Trustees submitted answers to questions from the Paulick Report or statements about their candidacy (click here to see their responses in an easy-to-read or print PDF document). Biographies of all the candidates can be viewed here at the Breeders’ Cup election web site.

I have covered the Thoroughbred industry for nearly 30 years and have seen a number of these candidates in board-room settings, talked with others about issues of interest to the Breeders’ Cup and Thoroughbred racing and breeding in general, and consider many of them friends. Some are or have been advertisers of this web site. In making the following comments and voting recommendations to nominators, I have done my best to remain objective in rating the various candidates without regard to friendships or business relationships.

Here is my summary of each candidate, along with a voting recommendation:

JOHN AMERMAN: Skilled businessman who as retired chairman and CEO of Mattel certainly understands consumer products and traditional marketing. I’ve not seen great leadership or fresh ideas spring from Amerman in his various industry roles and cannot recommend a vote for him on the board of Members and Trustees.

NADIA SANAN BRIGGS: Daughter of the outspoken but highly successful businessman Satish Sanan, who has played a major role in the Breeders’ Cup as chairman of the Strategic Planning Committee. Briggs has her own independent streak and would bring a fresh, young perspective to the board. She is bright, totally committed to the industry, and would make an outstanding member of the board of Members and Trustees. Recommend for election.

JACK BROTHERS: Has played a major if understated role in the success of Frank Stronach’s Adena Springs breeding and racing operation after virtually growing up in the horse business. Doesn’t claim to have all the answers for resolving the challenges at the Breeders’ Cup, but I doubt there would be a more fair-minded or harder-working individual on the board of Members and Trustees. Recommend for election.

BILL CASNER: Few people in the industry have shown the courage to stand up to the failed, old-guard industry leadership like Bill Casner has. He understands racing from the standpoint of the blue-collar horseman and now plays the game at the highest level while not forgetting his humble beginnings. Recommend for election.

CASE CLAY: One of the up-and-coming “next generation” industry leaders, Clay is the son of Three Chimneys Farm owner Robert Clay but was not heavily involved in the farm’s operation or the industry until the last five to seven years. I do have concerns that as one of three candidates with close ties to Three Chimneys (see below), there may be an effort to “stack the deck” for a future agenda, and for that reason cannot recommend a vote for election to the board of Members and Trustees at this time.

LINCOLN COLLINS: One of three individuals (along with Case Clay and Tracy Farmer) closely allied with Three Chimneys Farm. Collins has a good reputation for honesty and integrity in his Kern Thoroughbreds bloodstock agency, though seems light on service and industry experience. Cannot recommend a vote for election to the board of Members and Trustees.

DONALD R. DIZNEY: A member of both the board of Members and Trustees and the smaller Breeders’ Cup board of Directors, Dizney has done little to distinguish himself as more than a rubber-stamp voter for the status quo. There have been suggestions among some at the Breeders’ Cup that Dizney has not been as engaged through his board or committee attendance as others, but a request for attendance records of board meetings from Breeders’ Cup secretary Jim Philpott was ignored. Cannot recommend a vote for election to the board of Members and Trustees.

TRACY FARMER: Politically powerful in Kentucky through his work and fund-raising with the Democratic Party, Farmer has been a close ally of Kentucky Gov. Steve Beshear and was appointed to the Kentucky Racing Commission, on which he serves as vice chairman. Farmer serves on both the board of Members and Trustees and Breeders’ Cup board of Directors, where sources say he has not distinguished himself as an independent voice. The Paulick Report requested minutes of Breeders’ Cup board meetings to analyze the involvement of each board member, but secretary Jim Philpott denied the request. Cannot recommend a vote for election to the board of Members and Trustees.

H. GREG GOODMAN: Houston native has been a partner with Lane’s End Farm’s Will Farish, which doesn’t necessarily suggest he will be a “yes” vote for a potential Farish-orchestrated board of Directors slate. However, his non-response to the Paulick Report questionnaire and his vague personal statement on the Breeders’ Cup voting web site does not build confidence in his independence. Cannot recommend a vote for election to the board of Members and Trustees.

GEORGE ISAACS:(UPDATED JUNE 3, FOLLOWING RECEIPT OF RESPONSE TO PAULICK REPORT QUESTIONNAIRE) Veteran horseman is well respected throughout the industry for his work as general manager at Bridlewood Farm in Florida. Relatively new to national industry organizations, but in his responses to the Paulick Report questionnaire demonstrated a commitment to adding value to Breeders’ Cup nominations and increasing accountability and transparency within the organization. i believe it is also important to have representation among Florida breeders. Recommend for election.

TOM LUDT: One of the most independent-minded, cut-to-the-chase people I’ve seen in this industry in recent years. Has distinguished himself on the Kentucky Racing Commission, having been appointed by both a Republican and Democratic governor (and without being a major financial contributor to either of their campaigns), on committees at the Thoroughbred Owners and Breeders Association, and Breeders’ Cup board of Directors. Recommend for election.

REILEY McDONALD: Has many years of experience in the auction arena, most prominently as co-owner of Eaton Sales. Has not been as involved in industry leadership positions as I would like to see for someone with his knowledge and insight, though it is encouraging to see him step up at this critical time. However, I cannot recommend a vote for election to the board of Members and Trustees.

MICHAEL McMAHON: One of the individuals running who is completely invested in the Thoroughbred industry and its future, McMahon may lack in national industry organizational experience but more than makes up for it in passion. My instinct is he will add a truly independent voice who takes his responsibilities seriously. In his reply to the Paulick Report questionnaire, McMahon repeatedly spoke of the importance of increasing participation at the grass-roots level among breeders, by adding value to the program for nominators. Recommend for election.

CLEM MURPHY: Coolmore principals and associates are often guarded in what they say to the media, but I’ve found Murphy to be accessible and a source of innovative thinking when it comes to both the Breeders’ Cup and the racing industry. Recommend for election.

OGDEN MILLS PHIPPS: The phrase “lead, follow, or get out of the way” comes to mind. The Jockey Club chairman has had his opportunities to lead (New York Racing Association declined during his years of power), has not shown much interest in following, and that leaves one alternative. Cannot recommend a vote for election to the board of Members and Trustees.

DAN PRIDE: Believes in accountability and transparency, and has brought fresh ideas and enthusiasm to Fasig-Tipton since joining the auction company from Darley. Pride does a good job representing a younger generation of leaders that have real-world experience. Recommend for election.

ANDRE REGARD: For a relatively young man, Regard has a broad base of knowledge, and I think there is little doubt that he will be a growing influence in future years as he gains experience in the industry and its various organizations. One to keep an eye out for in the future, but at this time cannot recommend a vote for election to the board of Members and Trustees.

RICHARD SANTULLI: An enormously successful businessman, Santulli is a no-nonsense kind of guy who brings independence, integrity and a serious commitment to the Breeders’ Cup because of his passion for the Thoroughbred game,first as a fan and horseplayer and later as an owner and breeder. Last year’s effort by the old guard to keep Santulli off the smaller board of Directors represented a low point in the history of the Breeders’ Cup. Recommend for election.

JOSEPH V. SHIELDS JR. Has served on the board of Members and Trustees and board of Directors, but has not publicly articulated a clear vision for how the Breeders’ Cup can grow. Closely associated with old-guard Members and Trustees who have lacked innovation. Cannot recommend a vote for election to the board of Members and Trustees.

JOHN SIKURA: Fiercely independent and driven to build his own business, Sikura has a vision to grow the Breeders’ Cup to become an even more important world championship by incorporating horses from different parts of the globe. He is one of those “all in” horsemen who do not look at the Thoroughbred industry as a part-time hobby but as a full-time commitment of his time and financial resources, and his personal success is tied to the growth of events like the Breeders’ Cup. Recommend for election.

OLIVER TAIT: Represents Darley USA, one of the most important contributors to the Breeders’ Cup in terms of nominations and participation in the world championships. Tait may not be a household name in the U.S. at this stage of his career, but he has accumulated extensive international experience in Europe and Australia. Recommend for election.

DUNCAN TAYLOR: Listening to your customers seems like a logical approach to any business, but I don’t think that has been a strong suit of the Breeders’ Cup board of Directors or management in the past. Taylor Made has developed into the industry’s leading sales agency because of its customer-centric approach, an approach that can only help the Breeders’ Cup. Recommend for election.

ROBERT TRUSSELL JR.: Was a member of the Gainesway Farm team when John Gaines created the Breeders’ Cup in the early 1980s, so he has a great depth of knowledge and history of the organization. However, it is difficult to grasp where he stands on issues of importance given his lack of response to the Paulick Report questionnaire and the absence of a personal statement accompanying his biography on the Breeders’ Cup election web site. (In the original version of this article, I reported the Breeders’ Cup web site did not include a biography of Trussell; that has since been added here.) Cannot recommend a vote at this time for election to the board of Members and Trustees.

ROB WHITELEY: If you are in favor of maintaining the status quo, Whiteley is not your candidate. He was an outspoken critic of the decision last December to suspend the stakes supplement program, and I believe his leadership on that issue led to a quick reversal by the board of Directors. Strongly believes in accountability, transparency and fiscal responsibility. Recommend for election.

JACK WOLF: Knowledgeable about the importance of the Breeders’ Cup in the industry and bullish on the role the organization can play to increase the popularity of the sport, something it has not yet been able to do. Refreshingly candid, independent and with outstanding credentials both in racing and in the outside business world. Recommend for election.

Copyright © 2009, The Paulick Report

Support the Paulick Report. Make a donation today.

Visit the Paulick Report for all the latest news throughout the racing world.

Sign up for our Email Flashes to get the latest news, analysis and commentary from Ray Paulick

By Ray Paulick
“I’m often credited with the motto, ‘Only the paranoid survive.’ I have no idea when I first said this, but the fact remains that, when it comes to business, I believe in the value of paranoia.” – Andrew Groves, founder and former chairman, Intel Corporation.

“Just because I’m paranoid doesn’t mean they aren’t out to get me.” Anonymous.

There appears to be a mixture of both paranoia and rational thinking when it comes to how governance over the Breeders’ Cup has evolved in the last decade among the different camps that have fought behind the scenes to control this critically important industry organization.

For most of its 25-plus years, the Breeders’ Cup was run by a small executive committee headed by Jockey Club vice chairman and Lane’s End Farm owner William S. Farish, and later by G. Watts Humphrey, a Jockey Club steward and a partner in many of Farish’s equine interests. Board meetings were perfunctory events where self-perpetuating members of the Breeders’ Cup board did little more than rubber-stamp decisions made by the executive committee. Breeders’ Cup management carried out those directives.

Some breeders grew increasingly frustrated over this “private club” style of leadership and made demands for change: specifically, a more democratically elected Breeders’ Cup board of directors and one that isn’t controlled by a small executive committee. Significant change came in 2005 with amended corporate bylaws and articles of incorporation that allowed breeders who nominate foals and stallions to the program to vote for a board of 39 members and trustees. Those members and trustees would then elect a smaller operating board of directors to guide the organization.

At first blush, it looked as though the individuals who had controlled the Breeders’ Cup (namely Farish and Humphrey) were acceding to a democratic system (or at least one based on one vote per $500 in Breeders’ Cup nominations). But a closer look suggests they may have found ways to tip the scales of the election in their favor. In fact, a Farish has been able to maintain control of the Breeders’ Cup under the new election process, but it’s William Farish’s son, Bill, who has held the title of chairman of the board since the new system was adopted and the first reconfigured board of directors elected in 2006. 

The "election" of Bill Farish as chairman was a fait accompli even before the new board had its first meeting. "We have decided to elect Bill…" several newly elected directors were told on the eve of that first meeting, at which there was little discussion about a chairman. Farish has two years left to be chairman (term limits prohibit anyone serving more than five consecutive years as Breeders’ Cup chairman or vice chairman), and ground work is said to already be under way for Reynolds Bell, who does bloodstock work for Lane’s End, to replace Farish as chairman.

Back to the election of members and trustees. There is a section of the bylaws that permits the standing board of members and trustees to veto anyone voted onto the board by stallion and foal nominators. That authorization hasn’t been used since it was incorporated into the bylaws, but why is it even there? Is it possible this may be used in the event the people in control of the Breeders’ Cup become paranoid and worry that their grasp on power is in jeopardy?

Another example: Why would the current bylaws allow corporate officers (including paid employees) to participate in the election for the board of directors? Whether you are paranoid or thinking rationally, you’d have to assume that the paid officers, if they wanted to keep their jobs, would vote to maintain the status quo. The same goes for the section in the bylaws that allows past presidents to vote in the board of directors election. Currently, James E. Bassett III and D.G. Van Clief Jr. are permitted to vote for the board of directors at the annual meeting of members and trustees. Whenever the tenure of current president and CEO Greg Avioli ends, he will also have the right to vote for members of the board of directors.

Would it be paranoid to suggest that these three officers and two past presidents would be considered “safe” votes for the incumbents, as, represented by Farish and son?

For this year’s election of the board, to be held in July, the three corporate officers have agreed to abstain from voting. That’s a good move to alleviate concerns over conflict of interest, but the clause permitting their vote should be stricken from the bylaws. Past presidents Bassett and Van Clief should also agree not to vote in the election, and there is no reason to include past presidents in this decision making process.

Then there is the matter of the Founding Members, those individuals who put up $10,000 apiece as seed money when the Breeders’ Cup was established. The current founding members are Brownell Combs II (formerly of Spendthrift Farm), William S. Farish (Lane’s End), Jim Friess (appointed by Claiborne Farm’s Seth Hancock, the actual founding member), Brereton C. Jones (Airdrie Stud), John T. L. Jones Jr. (director emeritus of Walmac Farm)and John Nerud. It may have seemed like a good idea at the time to give certain lifetime rights to these individuals, but at least two of these founding members are no longer active in the business and it makes no sense for them to be able to vote annually on the election of board members. This is especially true when you consider the individuals (Sheikh Mohammed, John Magnier, Robert Clay, Tom Simon, Duncan Taylor, among others) who have put up huge sums in nominations and have to stand for election in order to have a vote for the board of directors.

So what we have is a sort-of democracy. One that allows nominators to vote for members and trustees (whose sole authority is to elect a board of directors), but which also says the existing members and trustees can exclude whoever has been elected by those nominators. It’s a democracy that gives current and past paid employees just as big of a say in shaping the board of directors as people who have put millions of dollars into the program and have to stand for election.

To the credit of the Breeders’ Cup, there has been progress (click here to read the Paulick Report article on this year’s election), though it would not have been made without criticism, paranoid or otherwise, of how the current election system is shaped. The old guard that’s run the Breeders’ Cup has come a long way, but there’s more to be done.

Copyright © 2009, The Paulick Report

Support the Paulick Report. Make a donation today.

By Ray Paulick
The Breeders’ Cup has begun to let the sun shine on the annual election process that determines who ultimately sits on the organization’s board of directors. For the first time this year, the Breeders’ Cup has decided to publish a roster of eligible voters and their available number of votes; complete results of its elections, with vote counts for winners and losers; it is requiring candidates for the board of directors be declared prior to the annual meeting, with no nominations to be accepted from the floor; has established on-line voting for both the members and trustees election and for the board of directors; and its officers have agreed to abstain from voting in the board of directors election.

The process began on Monday, May 4, when stallion and foal nominators could begin nominating candidates to run for 13 openings on the 48-person Breeders’ Cup board of members and trustees. By now, nominators should have received a letter from the Breeders’ Cup with a customer login and passcode to access a secure voting website that will be open for one week until May 11. Individuals must receive a minimum of 50 votes to be nominated (one vote is assigned for each foal nominated to the Breeders’ Cup and one vote for each $500 in stud fees for nominated stallions). There are 39 elected positions on the board of members and trustees, each with three-year terms, and 13 positions are up for election every year. The other individuals on the board of members and trustees are founding members of the Breeders’ Cup, past presidents and corporate officers.

When nominators go to the voting site, they should have access to a complete list of nominators and the total votes each nominator is eligible to cast. The disclosure of the nominators and number of votes is new to this year’s election.

The next step (from May 12-15), following the closing of nominations, is tabulation of the list of nominees. Individuals that received the required 50 votes are sent a consent form and will be requested to provide a short biography and suitable photo.

On May 18, True Ballot, a company that specializes in elections for labor unions, professional organizations, etc., mails nominators a letter with customer login and password information for secure online election voting. Nominators may request a paper ballot if they prefer.

Voting for the members and trustees election is open from June 1-15 among all nominators to the Breeders’ Cup program.

Following are the 13 members and trustees whose terms are expiring this year: John Amerman, Boyd Browning, Alice Chandler, Donald Dizney, Tracy Farmer, Tom Ludt, Clem Murphy, B. Wayne Hughes, Ogden Mills Phipps, Dan Pride, Richard Santulli, John Sikura, and Frank Stronach. These members and trustees whose terms are expiring are automatically re-nominated unless they opt out of the election.

On June 22, True Ballot will report the results of the members and trustees election and Breeders’ Cup will publish the results. Those results won’t be made official, however, until the annual meeting of members and trustees is held on July 9, and the candidates with the most votes are put up for election by the existing members and trustees. Prior to the vote at the annual meeting, according to section 4.2 of the Breeders’ Cup bylaws, nominations from the floor can also be made by members and trustees.

All members and trustees wishing to be candidates for two-year terms on the smaller board of directors have until 5 p.m. on June 30 to submit their names to Jim Philpott, the Breeders’ Cup corporate secretary. While the election for those open board positions (there are six this year) is conducted during the July 9 annual meeting of members and trustees, individuals unable to attend may vote through the election web site or via proxy, provided the member holding the proxy reveal the identity of each proxy he or she has received at the annual meeting. Each member is entitled to vote for up to six candidates.

The six board members whose two-year terms expire in July are: Reynolds Bell, Don Dizney, Tracy Farmer, Don Robinson (who is serving the remainder of the term of B. Wayne Hughes, who resigned from the board in January), G. Watts Humphrey, and Robert Manfuso. There are 13 elected board members, plus Breeders’ Cup president/CEO Greg Avioli.

Breeders’ Cup will publish the results of the board election, including votes, at the conclusion of the July 9 meeting.

Officers are elected at a subsequent meeting of the newly elected board of directors. According to Breeders’ Cup bylaws, no individual may serve more than five consecutive years as chairman or vice chairman of the board. Bill Farish of Lane’s End Farm is in his third year as chairman.

In a memo to the Breeders’ Cup members and trustees, Farish outlined the changes to this year’s election (publication of vote totals by nominator, full election results, on-line voting for both elections, proxy procedures, and officers electing to abstain in board of director election). “These changes to the election procedures are intended to provide full transparency to all nominators and ensure confidence in the election process,” Farish said in the memo.

The changes were requested by members and trustees who felt previous elections lacked sufficient transparency.

Additional changes have been requested, including amendments to the bylaws that would eliminate voting in the election for the board of directors by current officers (they have voluntarily abstained from the upcoming election); voting in the board of election by past presidents (James E. Bassett III and D.G. Van Clief Jr.); and voting in the board of election by founding members of the Breeders’ Cup, some of whom are no longer active in the Thoroughbred industry.

I’ll have my own thoughts on the Breeders’ Cup election process in a follow-up commentary tomorrow.

Copyright © 2009, The Paulick Report

Support the Paulick Report. Make a donation today.

 

By Ray Paulick
What’s in store for the Breeders’ Cup over the next five to 10 years? Will racing’s championships remain a two-day event? Will it consider a move to Europe, Dubai,or Hong Kong to incorporate more of an international audience? How will the organization’s revenue expand beyond its two primary sources of funding: stallion and foal nominators and North American horseplayers? More fundamentally, what should the Breeders’ Cup mission and vision be?

Answers to some of those questions may begin to crystallize this morning when the Breeders’ Cup Strategic Planning Committee, meeting formally for the third time, hears the draft conclusions and recommendations from William Field of the international consulting company Value Partners. Today’s meeting, Field told committee members in a memo, will provide a forum for them to discuss the staretegic plan’s draft conclusions and recommendations before they are formally presented to the Breeders’ Cup board in July.

Field and others from Value Partners have been digesting the data and information gathered from a process that began late last summer and included a lengthy survey of the 48 members and trustees of the Breeders’ Cup, interviews with nominators , horseplayers and fans, and two ideas-generating workshops. (Click here to read a previous Paulick Report article on the process.)

Thirty-five people are expected to attend today’s meeting, scheduled from 9 a.m.-3 p.m. at the Crowne Plaza Hotel in Lexington. Fred Pope, a Lexington advertising executive and the founder of the National Thoroughbred Association who has been a vocal proponent for changing horse racing’s business model for simulcasting, will make a presentation at the outset of the meeting.

The question some members of the Strategic Planning Committee are asking is whether they will be getting an uncensored version of the recommendations from Field and Value Partners, or if the board of directors, led by chairman Bill Farish, along with Breeders’ Cup president and CEO Greg Avioli, have hijacked the process from committee chairman Satish Sanan before its conclusions were presented. Avioli met with Field in London recently and a second meeting with the consultant in Lexington last week included Farish and Avioli but not Sanan. Governance, sources have told the Paulick Report, remains a significant issue among members and trustees as measured by the members and trustees surveys, yet there are concerns the issue will not be addressed in Field’s recommendations to the committee.

Nevertheless, Sanan said he is confident the draft recommendations made by Field will not have been edited by the controlling powers of the Breeders’ Cup board.

“I am optimistic that the process has been very transparent and it’s gone very, very well and has received overwhelming support from the attendees,” Sanan told the Paulick Report. “I am extremely confident that what comes out of the strategic plan will be the combined input and recommendations of the people who have been involved in the process.”

Another committee member concurred with Sanan that the longtime established powers on the Breeders’ Cup board have not tried to control the process. “I felt no reluctance on the part of the ‘old guard’ or efforts to steer the process,” the committee member told the Paulick Report. “It’s been a very good, open-minded exercise. It’s come down to acknowledging revenue sources: gambling and nominations. We’ve got to make both groups happy, but need to figure out the right strategy to grow this thing. The bottom line is we need to have a five or 10-year plan. Operating year to year as it’s been done is just too tough.”

Copyright © 2009, The Paulick Report

Support the Paulick Report. Make a donation today.

Visit the Paulick Report for all the latest news throughout the racing world.

Sign up for our Email Flashes to get the latest news, analysis and commentary from Ray Paulick

By Ray Paulick
Alex Waldrop is a good soldier who reminds me of Hiroo Onoda, the World War II legend who in 1944 was sent to Lubang island in the Philippines and told by his Japanese superiors to wage guerrilla warfare against the allied forces and to never give up. Along with a few others who survived a 1945 invasion by American soldiers, Onoda conducted operations from a base in the mountains of the island, even after leaflets were dropped saying the war had ended. Letters from loved ones begged Onoda to come home, but even after his fellow holdouts left him or died, Onoda carried out the orders given him.

It wasn’t until his one-time commanding officer flew to Lubang in 1974 that Onoda gave up the fight.

Waldrop, in his capacity as CEO of the National Thoroughbred Racing Associations, hasn’t fought as long as Hiroo Onoda did, but someone needs to tell him the war is over. The NTRA has about the same relevance and power as the Japanese Imperial Army did after the end of World War II.

It’s not Waldrop’s fault. He came into an untenable situation in December 2006 when the unraveling of the NTRA and Breeders’ Cup relationship was complete and the NTRA was left with little money and even less authority to carry out a mission to be the “league office” for horse racing. An organization that began in 1998 with high hopes and lofty goals of organizing and marketing a dysfunctional business that lacked structure, coordination and a strong central authority — the hallmarks of success for other sports — was, by 2006, a pale shadow of its former self.

What survived of the NTRA after its divorce from the Breeders’ Cup in 2006 was an understaffed press office and an industry lobbying effort in Washington, D.C., and not much more. Illusions of marketing grandeur or meaningful changes in how the sport was structured were gone like the budget the NTRA once had.

Eighteen months into Waldrop’s tenure at the NTRA, the Thoroughbred industry had a serious implosion. The filly Eight Belles died after the finish of the Kentucky Derby with millions watching on television in horror. Compounding the problem, Rick Dutrow, the trainer of Derby winner Big Brown, revealed one of our sport’s dirty little secrets, that anabolic steroids were in rampant use and, shockingly to many people, were perfectly legal. The public outcry was enormous, and the NTRA was ill-equipped to deal with it, because it lacked the authority to speak for the industry over which it had little control.

When hints of a Congressional inquiry surfaced, there was a scramble to react. The industry did what it always does: form committees and make recommendations. Foremost among those was a decision by Waldrop and the NTRA board of directors to create a new entity, the Safety and Integrity Alliance, which drafted an ambitious code of standards on a variety of safety and welfare issues for horses and jockeys. It was and is an admirable document, however meaningless it mostly likely will turn out to be.

Tracks that comply with the code of standards will be accredited by the alliance, sort of a “good horsekeeping seal of approval” that a track owner can frame and hang on his wall. And what about tracks that don’t comply? Well, they’ll have a little extra wall space. That’s the carrot and stick that Waldrop is armed with.

It goes back to something said during the Congressional inquiry held last June, when members of the House of Representatives repeatedly pointed out to Thoroughbred industry leaders how important it was for them to get their act together and establish a meaningful central authority unless they wanted the federal government to do it for them. After Alan Marzelli, the president of the Jockey Club, testified about some of the safety recommendations his organization was making to the industry, he was asked how the Jockey Club intended to have its recommendations adopted.

Marzelli’s response: “We believe in the power of persuasion.”

The power of persuasion (aka, committee recommendations) is what has kept this industry from realizing its potential as a major league sport. The harmless carrot and stick that Waldrop now carries in his briefcase is about as powerful as the army that Hiroo Onoda commanded on Lubana island for all those years after World War II.

Onoda survived, which I’m afraid is about all Waldrop and the NTRA and the rest of the racing industry can do with our current structure (or lack thereof). Maybe, just maybe, if enough tracks comply with the Safety and Integrity Alliance’s code of standards, we can stop the bleeding that’s been going on for some time, long before Eight Belles took her last breath or Rick Dutrow uttered his last insult. But stopping the bleeding is not a cure for what ails us.

What we have isn’t working. What we need are fewer organizations and fewer committees, more followers and fewer (but stronger) leaders. Why, someone pointed out to me the other day, do we need separate organizations like the NTRA, the Thoroughbred Owners and Breeders Association, the Jockey Club, the Breeders’ Cup, the National Horsemen’s Benevolent and Protective Association, the Thoroughbred Horsemen’s Association and so many others? He answered his own question: because none of those groups is willing to cede authority and lose whatever little fiefdom they control.

Waldrop keeps fighting, seemingly against all odds. When racing’s obvious problems were brought up twice recently in the New York Times, first by sports columnist William Rhoden and then by turf writer Joe Drape, Waldrop fired back in a blog at the NTRA’s web site, defending the Safety and Integrity Alliance and pointing out progress that had been made since the death of Eight Belles. He even tried to incite an angry mob to join his army and attack the messengers at the New York Times for the audacity of their observations.

It was rather pitiful. I’m not sure that Waldrop, like Hiroo Onoda, is much more than an army of one.

Copyright © 2009, The Paulick Report

Support the Paulick Report. Click here to make a donation today.

Sign up for our Email flashes to get the latest news, analysis and commentary from Ray Paulick

Visit the Paulick Report for all the latest news throughout the racing world.