Posts Tagged ‘boyd browning’

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

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Consignors and buyers attending Fasig-Tipton yearling sales in Lexington, Ky., and Saratoga Springs, N.Y., in July and August may be a little disappointed if they are looking for a sudden transformation of the 110-year-old Thoroughbred auction company under the new ownership of Dubai-based Synergy Investments.

The sale, announced in April, closed May 30. Synergy is headed by Abdulla al Habbai, an associate of Sheikh Mohammed al Maktoum of Dubai’s ruling family and the owner of the worldwide Darley racing and breeding operation.

“The upcoming sales will be extremely similar to 2007 and the years prior to that,” said Boyd Browning, Fasig-Tipton’s chief operating officer. “It might seem a little boring right now. Everyone wants to know what we are going to do differently. There is a sense of raised expectations in the market place, and that’s a positive thing. We’re really revved up, but we’re not there yet.”

In fact, Browning said he’s had just one meeting with a representative of Synergy in London the week after the deal closed. There have been no personnel changes, and none are anticipated in the near future. Budgets for recruiting and marketing remain what they were prior to the sale. Fasig-Tipton had been owned by a group of Thoroughbred industry breeders led by John Hettinger.

 “The marching orders (from the initial meeting) are to develop ideas,” Browning continued. “We don’t have a ‘formalized plan’ yet. We’ll do a review of the company, what we can do better and what types of things can we be involved with that can help the industry overall and the sales industry. We’re in the brainstorming stage now. We hope to have more definitive ideas in 60 to 90 days.”

Browning said he’s been pleasantly surprised by an outpouring of ideas from people in the industry.

“I’ve got a folder full of emails with suggestions,” he said. “Some people have their own personal agenda, but many others have some very creative ideas. We’ve got an opportunity to think outside the box and get people engaged.”

A survey of more than 30 Fasig-Tipton consignors and buyers by the Paulick Report found widespread  though not unanimous enthusiasm for the new ownership and what it can bring to the auction marketplace and the Thoroughbred industry.

Asked to rate the sale of Fasig-Tipton on a scale of 1-to-10, with one being extremely bad news and 10 extremely good news, respondents answered with an average of 8.1. The median rating was 9. Only two respondents answered with a rating below 5.

Comments on the sale were virtually unanimous in support of increased competition being good for any industry, including Thoroughbred auctions. Currently, Keeneland enjoys roughly an 80% to 20% market share lead over Fasig-Tipton in the $1-billion annual Thoroughbred auction market. There have been repeated rumors over the years that Keeneland would buy out Fasig-Tipton, but that never happened, perhaps to the regret of Keeneland’s  current board and management team. At the time the sale to Synergy was announced, Keeneland president Nick Nicholson issued a terse statement that said only: "The purchase opens a new chapter for an historic, well-established company in the Thoroughbred auction business."

Respondents to the Paulick Report survey  were assured their comments would remain anonymous unless they specifically gave approval to be named. All but one chose to remain anonymous.

“I hope the sale inspires Keeneland to treat their customers better,” said one bloodstock agent.

“The sale (to Synergy) is good for the industry and good for Fasig-Tipton, provided there is no hidden agenda,” a major buyer and consignor commented. “Being this is the second-largest sale company, it’s going to put Keeneland on its toes. They both need to be more customer centric, and more customer service oriented. They should do some of the things to attract and retain customers. Keeneland has been arrogant. They’ve had a monopoly virtually. If Fasig-Tipton steps it up a level or two, I think it will only improve Keeneland’s customer service focus. Good competition is good for the industry.”

“Keeneland is a company that doesn’t treat its consignors that well,” said a major Kentucky breeder. “So it will be interesting to see how they respond to the increased competition. They have operated like some pre-Teddy Roosevelt high-handed monopoly. The question will be: Does Keeneland have the talent and ability, the corporate mentality, to compete in the real world.  American capitalism does not allow sacred cows to stand alone in fields by themselves eating all the hay.”

“What excites me most,” said a Kentucky horseman, “is that it’s my understanding that Sheikh Mohammed wants to see things done to promote and grow our industry. One only needs to take a look at a before and after picture of Dubai to see he knows how to make things happen.

“This will probably make Keeneland step up and get active as well. I have never seen a time where the status quo was less acceptable in our industry. It is time for people to get with the program!”

While Sheikh Mohammed has not officially been linked with Synergy Investments, nearly everyone polled suggested that he was at least partially behind the purchase. His chief bloodstock agent, John Ferguson, negotiated the purchase on Synergy’s behalf.

“(Sheikh Mohammed) is definitely involved,” one horseman said. “There is no question about that.”

Said another: “I see no downside that would cause any worries (unless one is a shareholder in Keeneland). The positives are that this group, apparently and hopefully, will be applying the same intensity and energy into the commercial arena as they have applied to stallion management and marketing. Further, I imagine they will probably be recruiting new buyers and participants to become involved through 1) their Middle Eastern contacts and 2) incentives and encouragement to all purchasers (particularly trainers and other end users via hospitality and purchase incentives).”

One consignor said he does not believe Sheikh Mohammed has any intent to hurt Keeneland. “He simply wants to improve the economic state of affairs within the North American side of our industry,” he said. “He has a ton of money invested here and our prosperity is important to him. “My understanding is that he plans to use this purchase as a platform to launch innovative approaches to attract new buyers.”

Another breeder cited the new structure of Fasig-Tipton’s ownership as a plus. “The purchase takes Fasig out of a business model that is predominantly aimed at cost control and providing profits to distribute to a small handful of shareholders. This establishes a new business model that will have increased focus on customer appreciation and service, with capitalization to develop many new customer friendly initiatives. It has the potential to be a competitive threat to Keeneland, and increase competition almost always benefits the consumer. It should also lead to initiatives that bring more high-end clients to the sales and into the business. Basically, the possibilities are mostly limited by the imagination of the individuals in charge of designing and implementing.”

“Nothing but good can come from this sale,” said another consignor. “F/T has always been the ‘Avis’ of the equine sales companies where they ‘try harder,’ and the ‘product’ they produce is with less capital than their competitor. Keeneland does an excellent job; however, healthy competition is always good. F/T now has the capital to compete head to head with their competition, which should make a win/win for everyone.”

“What excites me,” said another, “is the injection of large amounts of cash, if necessary, in a contracting breeding/racing environment. ‘Doing it right,’ regardless of cost, will take precedent over profit.”

Another breeder said the sale has “enormous potential. It can be very significant or a non event. The potential to revitalize racing and selling is immense if the commitment is there. I have no worries about this sale unless they under deliver on the expectations the industry has for the new company. Unlimited funding, not just market driven. What an opportunity.”

Some were more guarded in their comments, listing potential negatives.

“Possible downsides include unknown effects, if any, of having one faction seeking to dominate the American horse scene,” said one consignor. “I’m not too worried, because I think the American breeding, racing, and sales scene is too broad and multi-faceted, and enough competition will always exist for one group to dominate enough to cause serious negative effects. (The situation is unlike that of the Jockey Club which negatively affects the industry because it is a monopoly without competition.)”

“Main concerns would be major changes in strategic direction and/or management,” said another.

“It might not be the best thing for so much of the industry to be under the control of one entity,” said one bloodstock agent. “That said, they put up the money so more power to ‘em. If the Arabs let it be known that they will support their sale and no longer buy at Keeneland, then it could have a significant impact on where consignors send their horses. If nothing else, I hope the sale makes Keeneland more user-friendly.”

“I am concerned that the ultimate goal may be domination in the market place,” a consignor said.

Said another: “I have been told (which means nothing, as we know), that the group behind Synergy are not fans of how things are done at Keeneland. So I’m guessing that this is a beginning process to eventually have more power than Keeneland does in the sales world."

“Nothing about it excites me,” said breeder Garrett Redmond. “My worry is: If it is profitable and profits are shipped to Dubai, more of our patrimony is exported to an OPEC member. That cartel is already taxing us into depression and poverty.

“There is one way it might help sellers,” Redmond added, “but I know it will not be done. With the huge capital at its disposal, FT could pay sellers on the day following the sale instead of the waiting period there is now. That alone would be a huge blow against Keeneland; the kind of competition we need to take Keeneland down a few pegs.”

Several horsemen contacted by the Paulick Report brought up the feud between Sheikh Mohammed’s Darley operation and the Coolmore camp led by John Magnier and the team that includes Demi O’Byrne and Paul Shanahan.

“Coolmore bought and sold a lot of horses with Fasig-Tipton, and there is the fact that Sheikh Mohammed doesn’t buy Coolmore horses or Coolmore-bred horses,” said one breeder. “I’m not sure how that is going to play. Would Coolmore have the same kind of relationship with Fasig-Tipton that they’ve had before? That’s still to be panned out.”

Browning addressed the question directly. “We’ve tried to be proactive with Coolmore and Darley. Both camps have been important customers of Fasig-Tipton and the overall industry. We’ve had a longstanding relationship with Coolmore, especially with Demi and Paul, and we’ve tried to make every effort to encourage them and assure them that we want to continue those relationships. It’s important for the industry.

“Competition is good and good for all of us,” Browning continued. “We want a competitive environment where we have both sides on the same horse. We want them both to be completely comfortable buying and selling horses at Fasig-Tipton. We are striving to do that. I can’t say that it’s going to be a success or failure.”

For now, Browning is hoping the industry has some patience as new plans are formulated.

“Rome wasn’t built in a day,” he said. “This transaction closed May 30. Our perspective is to make the game better and the sales better on a long-term basis. We want to do the right thing consistently and for the long term. It’s not very glamorous or exciting, but we are more interested in where we’ll be in five years, not five months.”

By Ray Paulick

Copyright ©2008, The Paulick Report