Archive for the ‘California’ Category

While CNET founder Halsey Minor continues his efforts to purchase Hialeah Park from current owner John Brunetti, he also has contacted financially troubled Magna Entertainment about the possible sale of Santa Anita Park near Los Angeles and the company’s two Maryland Jockey Club tracks, Pimlico and Laurel. But after speaking with Magna’s chief financial officer, Blake Tohana, Minor doesn’t think Magna is a serious seller, despite recent comments by company chairman Frank Stronach during a conference call to discuss second quarter financial results.

“I had the most baffling conversation in my life with a CFO, particularly one whose job depends on asset sales,” Minor said in an email to the Paulick Report, which he also copied to Tohana. “Basically, nothing is for sale. Maybe they have some time shares for you. (Tohana) said Frank misspoke when he said he was considering selling a majority interest in Santa Anita. Now it is back to a minority interest.

“You can only buy (the Maryland tracks) if you have a gaming license. (Tohana) did not specify what that meant or why it was important. …  This is despite the fact that Magna is not guaranteed any slot franchises in the current legislation, and they would need to post a $50-million bond which they don’t have to get one. At the very least if he had been on his toes he should have asked to borrow the money.

“You need to call him and hear this for yourself,” Minor suggested. “You would think you were talking to the CFO of Microsoft sitting on a pile of cash, given the attitude. Self-effacing, Blake is not. Not a good quality in a salesman. Without an investment bank, nothing sells if my experience is any guide.”

Minor said Tohana had no idea who he was when he called (“which is odd because I am the only person in America acquiring tracks right now and they claim they are selling them”) and eventually hung up on him. “I will go on record as saying these assets are going to be sold by banks,” Minor continued. “Banks don’t necessarily have good bedside manners, either, but they have good prices.”

Tohana responded to Minor with a terse email of his own, which he also copied to the Paulick Report, saying that Minor had “misrepresented” their telephone conversation. “Further, your manner of communicating to me via email and telephone was inconsiderate, rude and misinformed,” Tohana wrote. “In doing my job, I have always carried myself with dignity and professionalism. I think that view would be shared by anyone who has dealt with me during my career.”

Tohana went on to say that MEC has sold more than $400 million in assets “without investment bankers,” adding, “We will continue to pursue other asset sales and joint venture transactions as we have previously publicly disclosed. However, I do not have to take your personal insults just because you purport to have an interest in Santa Anita Park and the Maryland Jockey Club.”

Tohana also seemed irritated that Minor had called him to discuss the possible sale of the tracks during a family vacation, a comment that seemed to heighten Minor’s disdain for Magna’s CFO.

“I find interesting that you are on vacation at all and that you feel so offended I have bothered you on your vacation,” Minor wrote Tohana in a follow-up email. “My company is not imploding and yet I am fully engaged working to clean up some of your mess while here in Hawaii (on a vacation) with my family.

“Blake, you are condescending and that is no way to be with a company whose market value is less than many of our farms, whose massive debt is unserviceable and where you work in the service of the company that has literally blighted our industry.

“Enjoy your vacation, Blake, because when you get back things will only have gotten worse, not better, and you pissed off a potentially valuable ally royally. And if you haven’t noticed, you didn’t have many to start with.

“I believe results in life speak volumes, and I believe this applies equally to my career as it does to your company. Neither failure or success is an accident. A quick check would reveal that I have created billions in value, even exceeding your leader’s car parts business, while your outfit has not only destroyed massive amounts of shareholder value, but possibly the Thoroughbred business with it.”

When reached by the Paulick Report, Tohana said Minor was not “respectful” during their conversation. Tohana said he was fully aware of who Minor was when he received a call from him. “I had heard of the guy,” Tohana said, “but I wasn’t happy with some of the things he has said about our chairman (Stronach).”

Tohana has been Magna Entertainment’s CFO for more than five years, outlasting many of the executives who have come and gone in a revolving door atmosphere. He joined the company in July 2003 after serving in a number of executive positions at Fireworks Entertainment, a Toronto, Canada-based concern that produces and distributes television programs and movies.

“I’m quite a reasonable person,” Tohana told the Paulick Report. “I’m pretty straight up. Look, it’s not a secret (that we’ve had a great deal of executive turnover). This company hasn’t performed very well.”

Tohana insists Magna is “continuing to sell” some properties but said Stronach’s comments about possibly selling a majority interest in Santa Anita were “misreported.” He also said there remains the possibility that MI Developments, the real estate operating company that holds a controlling interest in Magna Entertainment, could be reorganized to relieve the debt-ridden racetrack company’s financial pressures. MI Developments recently extended by one month a bridge loan in excess of $100-million owed by Magna Entertainment and due at the end of August. Dennis Mills, a former member of Canada’s parliament and one-time vice chairman of Magna Entertainment, was recently named interim CEO of MI Developments following the departure of John Simonetti.

In the meantime, Minor continues to work on a business and operating plan for Hialeah. He has had a second meeting with Brunetti in Del Mar, Calif., and said Brunetti is working with his team on developing a business plan. “That’s a tremendous benefit,” Minor said, “and it shows that John really wants to help get Hialeah reopened.” Minor said the architects he would use to renovate Hialeah Park have inspected the long-shuttered track to get a better estimate of what the price tag would be to return it to its former condition.

Copyright © 2008, 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

California racing fans who are curious why Del Mar’s leading trainer, John Sadler, reportedly has had 18 horses test positive for steroids since July 1 will have the opportunity to quiz him on the subject during a “Donut Days” promotion at the Southern California seaside racetrack Saturday morning from 8-10 a.m. The program, emceed by track announcer Trevor Denman, promises a “behind-the-scenes look into the world of Thoroughbred racing.” If medication issues come up with questions from the audience, however, it may not be the behind-the-scenes examination the track’s marketing department was looking to promote.

(UPDATE: Sadler scratched from Donuts Days)

Sadler, with 25 winners from 83 starters at the current meet for a 30% win percentage, will saddle Zappa in Sunday’s Pacific Classic. But he’s been in the news this week following a search of his Del Mar barn by California Horse Racing Board investigators and the disclosure by CHRB executive director Kirk Breed that Sadler’s horses have accounted for 18 of the 38 positive tests among all trainers for anabolics since July 1. Mike Mitchell, who is second behind Sadler in the Del Mar trainer standings, has had 10 horses test positive for anabolic steroids, according to Breed. Those figures were first reported by Thoroughbred Times. A total of 418 tests have been conducted.

Jeff Mullins, third in the trainer standings, is facing a possible suspension and fine after one of his horses exceeded the permitted level for TCO2 (bicarbonates, or milkshaking). The positive occurred while Mullins was on probation for an earlier violation. Doug O’Neill, who is fourth in the trainer standings, was forced to have his horses stabled in a detention barn at the outset of the Del Mar meeting because of an earlier medication charge by the CHRB.

Sadler currently is president of California Thoroughbred Trainers and Mullins is on the organization’s board of directors.

The CHRB’s ban on anabolic steroids was phased in after testing began July 1, with warning letters issued for positive tests during the month of July. Starting Aug. 1, a positive test was to be considered an official violation, with a notation on the trainer’s record and public notification, but no penalties were to be assessed until Sept. 4, when steroids are reclassified from Class 4 to Class 3 drugs. Beginning with races on Sept. 4, steroid positives could result in a fine, suspension and redistribution of the purse.

The CHRB’s chairman, Richard Shapiro, and executive director Breed have admitted with the benefit of hindsight that the phased-in approach was a mistake. On Thursday, the CHRB took an additional step of announcing that any horse administered anabolic steroids on or after Aug. 22 will be placed on the vet’s list for a minimum of 30 days.

A Thursday press release from the CHRB quoted an “obviously angry” Shapiro saying, “We mean business!” after the board’s medical director, Rick Arthur, reported  at a Medication Committee meeting that some trainers were still using steroids. The press release also quoted CHRB vice chairman John Harris saying: “We will have no sympathy for any owners or trainers who flaunt our rules.” The meeting occurred the day after the search of Sadler’s barn.

The “Donut Days” promotion takes place at the west end of the grandstand. Other scheduled guests are retired Hall of Fame jockey Eddie Delahoussaye and Jockeys’ Guild representative Darrell Haire. 

Donuts are being provided by Yum Yum Donuts.

Copyright © 2008, The Paulick Report

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

The definition of the term “illegal” has always been a bit fuzzy in the horse racing world, especially among trainers. Several years ago I asked a very prominent horseman point blank if he was giving the blood-doping agent EPO to his horses as racing’s rumor mill had it. His response was a non-answer. “It ain’t illegal.” I assured him that the drug was, in fact, quite illegal, and that there were harsh penalties for anyone who got caught using it.

His reply surprised me. “How can it be illegal if they can’t test for it?” he asked.

Reminded me a little of former President Bill Clinton’s testimony to a grand jury about his affair with Monica Lewinsky. “It depends on what the meaning of the word ‘is’ is,” Clinton said, explaining why he told White House aides there was nothing going on between he and the intern.

The definition of what’s illegal and when are legitimate questions concerning the phased-in ban of anabolic steroids by the California Horse Racing Board. Monday’s search of the barn of Del Mar’s leading trainer John Sadler and comments by state regulators indicate not everyone has been on the same page in regard to the ban on steroids. The CHRB and its medical director, Dr. Rick Arthur, hoped all trainers and veterinarians would follow the guidelines suggested during the process of reclassifying anabolic steroids from Class 4 to Class 3 drugs (according to Association of Racing Commissioners International guidelines). That apparently hasn’t been the case.

Sadler said he and his attorney, Donald Calabria, have discussed possible litigation as a result of the barn search.

The first directive was issued by the CHRB May 12. That was followed by a May 26 informational Q&A that suggested, among other things, that trainers and veterinarians “not use anabolic steroids beyond this point.” But the Q&A also said there would be a period beginning July 1 when testing for steroids would be conducted but nothing more than a warning letter would be sent for positive tests. On July 24, CHRB executive director Kirk Breed issued a directive saying, effective Aug. 1, the board would begin to “strictly enforce all regulations concerning anabolic steroids and will no longer issue ‘unofficial notices’ when the test samples reveal unauthorized levels of anabolic steroids …complaints will be filed against trainers or other licensees alleged to have violated the regulations.”

Then, on Aug. 8, Breed issued another advisory saying the CHRB “will begin enforcement of the amended (steroids) rule” effective with races run Sept. 4.

From my reading of those directives and advisories, steroids became “illegal” on Aug. 1, with violations going on a trainer’s record, but there would be no penalty for positive tests until Sept. 4 because of California’s bureaucratic process of adopting new regulations. Trainers would effectively be on an “honor system” between those two dates. That’s kind of like saying it’s illegal to go over the speed limit on a highway this month, but the police will only give you a warning if they catch you speeding. But next month, when they start issuing tickets with penalties, you’d better slow down!

“We are trying to implement this enforcement regulation in the most logical, timely way,” CHRB chairman Richard Shapiro said in one of the advisories. “We have given notice to the owners, trainers, veterinarians and other track personnel. It is part of the process. The administration of all anabolic steroids to horses in competition must stop immediately. Complaints will be issued. The hammer is coming down. In this way, we are protecting the public and all of those who are playing by the rules.”

Apparently it’s a velvet hammer that chairman Shapiro is wielding until Sept. 4. And I wonder how the public is being protected by having rules that have no teeth for enforcement. While most trainers followed the guidelines, some apparently have not, and the betting public has no way of knowing who is and who isn’t giving steroids to their horses.

One of Sadler’s principal owners is Gary Barber, who with his brother, Cecil, has won more races at Del Mar this season than anyone else. (Another of Sadler’s owners is CHRB commissioner Jerry Moss.) Barber was extremely upset about the barn search and any suggestions that Sadler is doing anything illegal.

“John is a stand-up guy and there is no reason to believe that there is anything he’s done beyond what’s in the rules and regulations,” Barber told the Paulick Report. “It’s quite shocking to me that these people without any evidence or knowledge have gone on a witch hunt and are trying to recover from the mistakes they made themselves.

“It’s all about steroids,” Barber continued. “I’m a total supporter for getting rid of them. We’re all for cleaning up the game. Lots of people have been receiving letters (warning of positive tests for steroids). These letters are purely notifications that in the future this will not be tolerated.

“You either should ban something or not;  there’s no in between. They should have said ‘no use, period.’ But now they regret the decision they made and are trying to find scapegoats. Wait till Sept. 4 and go after everybody at the same time. Write the rules and abide by them.”

CHRB executive director Breed, commenting in a published report, admitted it was a “mistake” to phase in the ban on steroids.

Copyright © 2008, The Paulick Report


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

Support the Paulick Report. Make a donation today.

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

Red-hot California trainer John Sadler may also be hot under the collar after California Horse Racing Board investigators raided his barn Monday morning in an apparent search for prohibited medications. So hot, in fact, that Sadler told the Paulick Report he and his attorney are considering legal action against the regulatory agency.

Sadler’s rise to the top of the California training ranks wasn’t exactly meteoric. The one-time show-horse rider who turned 52 years old last month, took out his trainer’s license in 1979 and won his first stakes race that same year. He’s been a steady presence over the years, but Sadler has never been as hot as he has been in 2008. When CHRB investigators conducted their shakedown of his barn at Del Mar on Monday, as first reported in Daily Racing Form, Sadler was the meet’s leading trainer, winning at a 28% clip and having a 60% top-three percentage. Sadler’s 22 winners from 78 starters put him far ahead of second-place Jeff Mullins, who recently was charged with having a horse that exceeded the permitted TCO2 level (milkshaking).

Sadler said on Wednesday he and his attorney, Donald Calabria, are preparing a public statement regarding the raid. “It’s not anything,” he told the Paulick Report in response to a question about the investigation. “These are unusual circumstances. We don’t really understand it, and we are putting materials together.” The trainer then said “we are talking” about possible litigation.

Sadler also was leading trainer at Hollywood Park this summer, winning 30 of 144 racese for a 23% clip and 56% in the money percentage. Three of his meet-leading seven stakes winners came on the same afternoon June 28 when he won the Landaluce, A Gleam and American Handicap. Sadler was runner-up to Mike Mitchell in the winter-spring Santa Anita trainer standings.

Sadler has relied heavily on the California breeding program to populate his public stable and has won stakes races on a steady basis. He got his start as an assistant to the highly respected veterinarian Jack Robbins and also worked for trainers Tom Pratt, David Hofmans and Eddie Gregson. One of his biggest stars in his early years was the unbeaten California-bred filly Melair, who defeated Preakness winner Snow Chief in the 1986 Silver Screen Handicap at Hollywood Park, going a mile in 1:32 4/5.

His win percentage in recent years has hovered between 16-21%, and he’s ranked as high as 16^th nationally among trainer by money won, with $5,408,950 in 2007. Last year was by far his best season, topping the $4,129,131 earned in 2006 and almost doubling his 2003 and 2004 money figures.

Barring a huge slump, Sadler will easily have a career year in 2008. His 413 starters have won 83 times (20%) and earned $4,812,846.

Sadler has also served on industry boards, including California Thoroughbred Trainers and Thoroughbred Owners of California, and he was instrumental in establishing the Eddie Gregson Foundation.

A 2007 profile of Sadler in Bloodhorse magazine said the trainer applauded the tightening of medication rules in California. “We have the best testing in the country,” he was quoted as saying, “and now they’re doing this out-of-performance testing, which I think is fabulous. We’re leading the way in reforming medication.”

The Racing Form article which broke the news of the raid (although it had already been widely discussed in a Del Mar Thoroughbred Club online forum) said speculation centered on the possibility of a search for anabolic steroids, which are being phased out as permitted medications in California. Beginning Aug. 1, tests for steroids became “official,” but positives will not be subject to fines, suspensions or loss of purse money until after Sept. 4.
Copyright © 2008, The Paulick Report

Support the Paulick Report. Make a donation today.