Posts Tagged ‘breeders’ cup election’

By Ray Paulick
Nominators to the Breeders’ Cup program and the Members and Trustees they elected in June have spoken loudly and clearly, and the 13-person board of Directors has five new members from the six positions that were voted on last week. Only one of six incumbents up for re-election managed to retain his position on the board of Directors. That’s a pretty strong statement from the nominators and the 48 Members and Trustees who select the board of Directors.

There may be distinct differences in the two factions that have sought control of the Breeders’ Cup, in areas like governance, transparency and accountability to the stakeholders. There may even be differences in defining who Breeders’ Cup stakeholders or customers are.

But the election cycle is over until June 2010, and whatever differences existed between the two camps—within both the board of Members and Trustees and the smaller operating board of Directors–should be set aside for now, so that the important work on the long-term strategic plan can be done in a collaborative and cooperative manner.

The plan, presented to the Members and Trustees last Thursday, is in itself an example of what can be accomplished if individuals, who may have differences of opinion in many areas, focus instead on what they have in common: namely, a desire to support breeders by promoting the growth of the Thoroughbred racing industry through the staging of the Breeders’ Cup competition. That, in fact, is the new mission statement of the Breeders’ Cup, and I, for one, am glad to see the organization look beyond its late-season championship event.

It’s not enough for the Breeders’ Cup to have a successful day (or two) of racing. Given the ineffectiveness of the National Thoroughbred Racing Association and other organizations like the Thoroughbred Owners and Breeders Association, the Thoroughbred Racing Associations, or the Jockey Club, the Breeders’ Cup may be the only entity that has the critical mass to better organize and promote the sport on a national basis.

Though the 400-page strategic plan has not been released and author William Field of the international consulting firm Value Partners said it is a broad strategy that does not include tactical details, it was revealed that one of the keys to this plan will be to strengthen the road to the championships. This is something that’s been tried before without any measurable success.

Satish Sanan, who deserves a great deal of credit for the cat herding he did as chairman of the Strategic Planning Committee, said racetracks have to be looked upon as partners for a racing series to be effective. “In any business, if you are going to be successful and form long-term relationships, the word partnership means you must be willing to share long-term risks and rewards,” Sanan said in a conference call with Breeders’ Cup nominators and the racing media on Friday. “Your goals really have to be aligned…I think all of the conflicts you hear about really will go away, particularly if it is an all-encompassing partnership. There is a big strategic difference in how we have done it and how we plan to do it in the future.”

That may be easier said than done, which is why it is so important for the Breeders’ Cup board of Directors to support its management team as it attempts to connect the dots the strategic plan has laid out for them. Putting together a financial and implementation plan that includes long-term partnerships with the tracks is on the shoulders of Breeders’ Cup president Greg Avioli and the other Breeders’ Cup executives. Considerations for the plan include what to do with the millions of dollars currently being used to supplement stakes around the country, whether to turn the Breeders’ Cup championships back to a one-day event, to reduce the number of races, or to cut purses. Those are big questions, and they have until December to answer them and finalize a detailed, tactical plan.

There will be time down the road to discuss the issues that divide some of the Members and Trustees and individuals on the board of Directors: election procedures and eligibility, transparency and bylaws. However, the priority between now and the end of the year has to be on turning the strategic plan into something tangible that can help the Breeders’ Cup, racetracks and the sport as a whole.

It’s crunch time.

Copyright © 2009, The Paulick Report

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By Ray Paulick
Some people have asked me why I think it is so important for there to be a change in leadership, starting with the 13-member board of Directors, at the Breeders’ Cup. There currently are six board seats up for election, with electronic voting currently taking place from July 1-8 among the 48-person board of Members and Trustees (along with two ex-presidents and two current officers of the organization). The Members and Trustees hold their annual meeting on July 9, where the electronic votes and those cast in person will be tabulated. Ten individuals are running for the six seats, and there is marked difference in their philosophies.There are numerous reasons for there to be a change, not the least of which is that it is simply time for someone else to run the organization. The Breeders’ Cup for too long has been in the clutches of a handful of people who have run it, for better or worse, as a private club.

But it’s much more than that. Some of the recent decisions made by management and approved by the 13-member board of Directors have been roundly criticized, and deservedly so. Among them are the decision to hold back-to-back Breeders’ Cups at Santa Anita on a synthetic main track that many horsemen dislike; the ticket-pricing mistake at the 2008 Breeders’ Cup; the short-lived decision to suspend the Breeders’ Cup stakes supplement program; and the oddly configured and regionally uneven structure of the “Win and You’re In” qualifying races.

Let’s look at “Win and You’re In” first. Daily Racing Form publisher Steven Crist, in calling the series “illogical and imbalanced,” pointed out what appears to be a significant anti-New York bias. In an interview with Breeders’ Cup marketing executive Peter Land, Crist gave Land just enough rope to hang himself with his explanation. Land, Crist wrote, said Saratoga was left out of the “Win and You’re In” series because the Breeders’ Cup decided to “invest in the fall rather than the summer.” But that didn’t explain why Del Mar, whose meet overlaps Saratoga’s, had eight stakes labeled “Win and You’re In” while Saratoga had zero.

As Crist wrote, “When the industry’s leaders wonder why racing often is not considered a big-league professional sport, they need look no farther than the patently unfair and incomplete ‘Win and You’re In’ schedule to see why.”

In addition, there is bad blood between executives of the Breeders’ Cup and the New York Racing Association, and because of that some thought has been given to excluding Belmont Park as a future host site of the championships. It last served as host in 2005.There’s no place for this kind of pettiness in a sport that is struggling, and for the Breeders’ Cup board to allow this feud to continue is inexcusable.

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

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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

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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

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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

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By Ray Paulick
If the Breeders’ Cup board of directors and management thought the decision last month to reinstate the stakes supplement program in 2009 (less than a week after voting to suspend it) was going to quiet any dissenting voices, they were wrong. A scathing commentary on the Breeders’ Cup, written by longtime owner and breeder Peter Blum and appearing in the Jan. 10, 2009, edition of the Thoroughbred Times, states publicly what a number of nominators to the program have been saying privately for some time: the Breeders’ Cup has lost its way.

Blum’s commentary is a must read. If you’re not a subscriber to the Thoroughbred Times (the article, unfortunately, is not available online), do yourself a favor and beg, borrow or steal a copy of the Jan. 10 issue.

Blum insists the Breeders’ Cup will not be living up to its mission if the board eliminates the stakes supplements after 2009, as many fear will happen. Board chairman Bill Farish said the reinstatement applied only to 2009. Blum suggests some of the Breeders’ Cup leaders “mirror the problems that characterize virtually all of our industry’s leadership; they are uncreative, self-serving, arrogant, out of touch, and not mindful of their constituents.”

He also questions the investment strategy for the organization’s cash reserves, saying the “mismanagement of our money amounts to a serious breach of trust and a failure of fiduciary responsibility.” Blum said he is appalled by compensation packages for and lack of accountability by top management, and believes voting for board of director seats is “skewed.”

His conclusion is a call to action by others who have similar feelings: “We have lost the Breeders’ Cup as it was defined in its original mission statement,” Blum wrote. “It is time for breeders to take it back.”

Blum’s plea should serve as a reminder for breeders throughout the country not to give up on the program and continue to nominate their stallions and foals. The financial backbone of the nominations remains in Kentucky, but every single stallion or foal nominator is a stakeholder in the program who has the opportunity to vote in the annual election of members and trustees. Those members and trustees decide who sits on the Breeders’ Cup board, so the elections are critically important. As citizens of Florida in 2000 and Minnesota in 2008 learned, every vote matters.

It will be interesting to see how the Breeders’ Cup reacts to Blum’s commentary. Will board chairman Farish and CEO Greg Avioli chant a “this too shall pass” mantra and instead focus on a behind-the-scenes strategy to ensure the balance of power on the Breeders’ Cup board of members and trustees remains in their favor when 13 of them are elected later this year? Will they use a vehicle like Bloodhorse magazine, on whose board Farish sits, to respond to Blum’s criticism?

The Breeders’ Cup is not just feeling heat from breeders. There is more than a little sentiment throughout the industry that the expansion of the former one-day, eight-race program to a two-day, 14-race event has diluted the championships among American fans (while, admittedly, increasing interest for European horsemen). Additionally, many racing fans were vocal in their disapproval of the Breeders’ Cup moving all of the filly and mare races to the Friday program in 2008.

The Oak Tree Racing Association, which opted to guarantee $5 million in revenue to the Breeders’ Cup for hosting the 2008 championships at Santa Anita Park, reportedly fell more than $2 million short because of weak ticket sales and lower than anticipated on-track handle. I imagine Oak Tree officials aren’t thrilled with that deal right now. The two sides have been busy working on a settlement that will not jeopardize the Cup’s scheduled return to Santa Anita in 2009.

The growing criticism of the Breeders’ Cup is no small matter. By many accounts, its creation more than 25 years ago was one of the most positive developments the sport has ever seen. No one – including breeders, owners, jockeys, trainers, racetrack companies and racing fans – wants this enormous industry asset to be lost in a maze created through poor leadership.

Copyright © 2009, The Paulick Report

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