Posts Tagged ‘kentucky thoroughbred industry’
Wednesday, February 3rd, 2010
After months of back and forth between Republicans in the Senate and Democrats in the House and Governor’s Mansion, the people have finally spoken out on the issue…and they want slots. A new WHAS11/Courier-Journal Bluegrass poll shows that 59% support slots while only 37% oppose them.
This is welcome news for those in the Kentucky Thoroughbred industry. However, it’s not all sunshine here as the poll also indicates 85% in favor of letting the people decide, not the legislature.
Read it at WHAS 11 news
Then come back to the Paulick Report and let us know what you think
- Bradford Cummings
Tags: Bluegrass poll, bradford cummings, Courier-Journal, Democrats, Governor's Mansion, House, kentucky thoroughbred industry, Paulick Report, Republicans, Senate, WHAS11
Posted in Kentucky, Slot machines | 16 Comments »
Sunday, June 21st, 2009
Glencrest Farm is a family operation in the purest sense of the term. American as apple pie. Established by John Greathouse Sr. more than 50 years ago, Glencrest today is run by four sons, John, David, Allen and Edward, and the two daughters of John and Mary Allen Greathouse, Nancy and Margaret, also have played a significant part in the operation over the years. The next generation of Greathouses is preparing to carry on into the future. Click here to read a profile about Glencrest, published in the Blood-Horse and entitled "A Family Tradition."
That tradition is threatened today by a struggling Kentucky racing industry that is unable to compete on a level playing field with other states that have allowed racetracks to expand their wagering menus to include slot machines and other casino games. The breeding industry is suffering as a result. The news in the past several days that Ohio’s governor will seek to add slot machines to racetracks in the Buckeye State will only make the situation more grave.
John Greathouse Jr. has written the following open letter to David Williams, the Republican president of the Kentucky Senate who said he does not want Kentucky tracks to have Video Lottery Terminals (VLTs) or slots. A VLT bill passed the Kentucky House on Friday but Williams has said a Senate Committee will kill the bill on Monday.
Time is of the essence Please write to Williams (click here for contact information) and tell him your thoughts on the subject and include either a link to John Greathouse’s letter or cut and paste the letter along with your remarks. Also, you can click here to send an email to all Kentucky Senators. — Ray Paulick
An open letter to Senator Williams
Senator Williams
My name is John Greathouse, co-owner of Glencrest Farm, a family farm just outside of Midway, Kentucky. My brothers, David, Teddy, Allen and I own just over 800 acres where we raise cattle, tobacco, hay, corn and yes thoroughbred horses. To an outside developer this land may be worth many millions in terms of potential. To the people that work and live on the farm, it’s a way of life not commensurate with the development potential. We enjoy what we do and want to continue to do so. It’s a working farm that supported many in our family for over 50 years. We have several young Greathouses that are being trained to fill in our footsteps in the coming years. It’s also the livelihood of the thirty or so people that work there and need to keep their jobs also.
I have been a Republican all my life. I am fairly conservative and that’s the way I vote. Reagan, the Bushes, Fletcher and you have all had a chance at one time or another to help this profession. All said NO! Now my Democratic friends shake their collective heads and ask why I vote the way I do. "Vote for your pocketbook, John," they say! To this point I have stayed the course.
Senator Williams, are you familiar with Pascal’s Wager? It’s a wager with unlimited upside but no downside. That’s what we have here with the expanded gaming bill. Unlimited upside and NO DOWNSIDE. The money is currently leaving the State, so please try not to tell us people can’t afford to gamble!
Senator Williams, you should recuse yourself from these proceedings. You have been influenced by outside forces. This State stands to lo se not only its flagship industry, but its international, worldwide identity.
Do the right thing please. Kentucky needs it, the thoroughbred industry needs it, my family and our workforce need it.
John Greathouse Jr
Glencrest Farm
P.O. Box 4468
Midway, Kentucky 40347
859-233-7032
Tags: david williams, glencrest farm, John Greathouse, kentucky horse industry, kentucky slots, kentucky thoroughbred industry, Paulick Report, racinos, Ray Paulick, video lottery terminals, vlts
Posted in Kentucky, Slot machines, Thoroughbred Business | 31 Comments »
Wednesday, March 11th, 2009
By Ray Paulick
Kentucky’s signature horse industry is in a battle for survival, but its enemy is not the army of slot machines in neighboring Illinois, Indiana, Missouri or West Virginia, or a few hundred miles north in Pennsylvania or south in Louisiana. It is the commonwealth’s own elected officials, beginning with Gov. Steve Beshear, whose bumbling leadership in Frankfort has enabled a gang of hapless legislators to begin the process of euthanizing the state’s No. 1 industry.
The mercy killing may not take that long. Ron Geary, the owner of Ellis Park, told the Kentucky Horse Racing Commission yesterday that 2009 will be the Western Kentucky track’s final season unless Kentucky legislators give tracks the tools to compete with other states: slot machines. Turfway Park in Northern Kentucky has cut purses and may be forced to reduce the number of racing dates next year. The only reason the track has not been closed and sold for development is that Keeneland is part owner, and officers of the Lexington racetrack and auction house understand how important a racing circuit that extends beyond Keeneland and Churchill Downs is to Kentucky.
How desperate is Kentucky’s racing business? When Churchill Downs general manager Jim Gates asked the Kentucky Horse Racing Commission for approval to add a single race to this year’s Kentucky Oaks and Derby day cards, there was a lengthy discussion about whether or not the Louisville track would have enough horses to fill those additional races.
And the racing commission itself is all but tapped out. Forget about heightening integrity of pari-mutuel pools, improving backstretch security and launching out-of-competition drug testing. The commission is having a hard enough time making payroll for existing staff, let alone filling new, vital positions and creating programs to boost public confidence in Kentucky’s horse racing product. Other states may have permanent funding for their racing commissions to do what’s required to maintain integrity, but this is Kentucky, where the horse industry is viewed by some legislators as “the sport of kings” when in reality it is becoming a poor, forgotten stepchild.
Click here to take a look at the distressing presentation Ellis Park owner Geary made to the commission when he explained why he won’t have enough horses for this year’s meeting and will likely cut back to three days of racing per week, or perhaps just open for live racing on weekends. The reversals of fortune in purses being offered at Ellis Park and Turfway are frightening. Tracks in Indiana with purses enriched by slot machine revenue are taking an in-your-face, competitive posture against southern neighbor Kentucky. Pennsylvania, with a booming racing and breeding program fueled by gambling devices, is boasting that it is the future horse capital of the world. Vans are transporting racehorses and breeding stock in every direction – away from the Blue Grass State.
“Kentucky’s signature industry is fading away…100,000 jobs, and they are at risk right now,” Geary told the racing commissioners.
Yet Kentucky’s governor, who made expanded gaming his signature campaign platform and had the wholehearted support of the horse industry, suffered a severe case of memory loss in 2008 after his election, failing to bring up the issue in his “state of the state” address or make it a legislative priority. This year, Beshear has apparently gone into the witness protection program or is hiding out in a bunker until the legislative session comes to an end. He has shown a complete lack of leadership.
Legislators in some parts of Kentucky understand the importance the horse industry plays to the state’s economy, but too many House and Senate members from outlying areas simply don’t see the connection between those 100,000 jobs at racetracks, training centers and breeding farms and their own districts.
What’s not to understand? Jobs provide for payroll taxes to the state and revenue to local communities. Racetracks and breeding farms promote tourism throughout Kentucky. Without racing and breeding, Kentucky’s already bleak budget crisis would only be worse. Can you imagine how much the state would have to invest to create 100,000 new jobs? Kentucky must move forward on a plan to provide video lottery terminals, slots machines or casino wagering at the state’s racetracks for the industry to compete.
But if Kentucky’s governor and legislators can’t even provide funding for its own racing commission, how can we realistically expect them to approve a plan to provide economic stimulus to the racetracks and breeding farmers who are struggling?
“We’re essentially going to be broke at the end of this fiscal year,” said Robert Beck, chairman of the Kentucky Horse Racing Commission. “I’ve got an economics degree, and I can’t figure it out. Our source of funding is not going to go through the legislature, and I’m very disappointed by this.”
The lack of support from the state, which Beck called a “travesty,” will, he said, “directly affect the integrity of the game.”
Beshear appears to be well on his way to becoming a one-term governor, and while there is hope Kentucky’s next chief executive will provide more leadership than Beshear has, the damage to the horse industry will be severe – if not fatal — when his time is up.
Copyright © 2009, The Paulick Report
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Tags: beshear, churchill downs, ellis park, jim gates, Keeneland, kentucky derby, kentucky horse racing commission, kentucky horse racing industry, kentucky oaks, kentucky thoroughbred industry, Paulick Report, racinos, Ray Paulick, robert beck, ron geary, Slot machines, steve beshear, turfway park
Posted in Keeneland, Kentucky, Race Tracks, Regulatory Issues, Slot machines, Thoroughbred Business, ellis park, turfway park | 37 Comments »
Friday, December 12th, 2008
By Ray Paulick
Thursday’s announcement by Walmac Farm of a “breeders stimulus plan” that allows breeders to pay 2009 stud fees from the proceeds of the sale of weanlings or yearlings is further proof that an increasing number of Kentucky’s stallion farms are recognizing mare owners as partners in their business. The steep declines in bloodstock prices in 2008 and the very real threat that many breeders could go out of business if the economics do not change has led virtually every major stallion station to reduce 2009 stud fees and relax deadlines for when the payments are due.
In the most simple terms, without mare owners, stallion farms would have no customers. If stud fees were not reduced and payment schedules relaxed, there would be fewer breeders around for the 2009 breeding season. The changes were fueled by a survival instinct.
There are only a handful of stallion farms continuing what in recent years was the widely accepted policy of stud fees due in September or November of the year of conception. Even some of those holdout farms are showing flexibility on payment schedules. Most stallion operations have changed to a payable when foal stands and nurses program; some in that category offer discounts for breeders who are willing to pay stud fees early. Although the stands and nurses policy has been in place for years at some farms, a number of breeders pointed to the decision by Lane’s End to adopt that policy for 2009 as a bellwether move. Others quickly followed suit.
Two relatively new stallion stations, Darley and Stonewall Farm, have created unique incentive programs for many of their stallions. Some farms that reduced 2009 stud fees in September during the Keeneland yearling sale have come back with a second round of fee reductions because bookings were coming in at an alarmingly slow pace.
“Changing from payable on Sept. 1 to out of proceeds is a huge difference,” one breeder told the Paulick Report. “It gives a breeder two years of the use of his money. It should be the universal policy. It gives breeders the chance to stay in business. And let’s face it, the stallion farms need us. I guess you’ve got to really worry when stallion farms are hit; they’ve been in total control.”
“All the stallion managers announcing reduced fees want to be seen as benefactors,” said breeder Garrett Redmond. “In fact, they are trying to preserve their own business. Mare owners will be short of money next year because their 2008 sales were for less than needed or horses were not sold at all. They need help to pay fees due when foals stand and nurse in 2009. Reduction in fees due in spring 2010 will not help.”
“There’s a tendency to think the stallion guys took it to us for a long, long time and we overpaid, and we get even now,” said breeder Craig Bandoroff of Denali Stud. “That’s not totally fair. It’s a market economy ruled by supply and demand. I love the idea of stands and nurses, but if you want to pay on Nov. 1 you get a discount. That’s the best deal going. Payable Sept. 1 was terrible; you hadn’t sold your yearlings yet.”
“The pendulum is definitely swinging back from stallion farms to the mare owner,” said Olin Gentry of Gaines-Gentry Thoroughbreds. “Popularity and demand has allowed some farms to get away with Sept. 1, but there’s more and more pressure to give stands and nurses. There aren’t many holdouts.”
One farm staying with a Sept. 1 policy on some of its stallions is Airdrie Stud. “We believe that everybody has the right and should have the opportunity to set their stud fees according to the way they are the fairest relative to the product they are selling,” said owner Brereton Jones. “We raised Indian Charlie’s fee 50% and he’s already booked full; his fee is due Sept. 1.”
Jones said some other fees will be due at time of foaling. “We work with each breeder who calls in here, and it depends on the stallion they want to breed to; it’s the free enterprise system at its best. We’ll discuss packages with anybody; if someone wants to breed three mares to a stallion, we will work out an arrangement. I think the general attitude of breeders is that Airdrie’s fees have always been extremely fair, and consequently they’ve been successful.”
The key to Airdrie’s fees and schedule, Jones said, is flexibility. “Our policy is geared to the success of both the owners of the stallion and the owners of the mares.”
Darley set all stallion contracts for stands and nurses when it was established at the former Jonabell Farm Sheikh Mohammed purchased in 2001. In 2007, the farm introduced pay from proceeds fees that stallion nominations manager Charlie Boden said is actually a “pay when you sell with forgiveness” policy. “We try to assess the risk on the front end,” Boden said, “but if we’re wrong and the resulting offspring brings half the stud fee, we don’t bill them for the difference.” The policy was introduced a few years earlier at Darley’s stallion operation in England.
“We’re trying to help breeders make a prudent decision in not overbreeding a mare,” Boden said. “It makes more sense to people these days. I think the days of overbreeding mares should be screeching to a halt unless the stallion is overpriced.”
Darley’s policy lets breeders decide whether to pay from proceeds of a weanling or yearling sale. Not all stallions are eligible for the program; Boden said he tries to limit it to stallions standing for $20,000 or less.
Boden also said Darley has offered what he calls a “Grade 1 club” on certain stallions, giving a free season to mares that were Grade 1 winners or Grade 1 producers.
In light of Sheikh Mohammed’s enormous wealth, Boden was asked if these policies were designed to put the squeeze on competing stallion farms. “Sheikh Mohammed wants breeders to make money,” Boden said. “He wants the business to thrive. He’s a fan of the sport and the industry as a whole. He’s not trying to put anyone else out of business. He’s trying to help a breeder raise a top horse at a competitive price. His goal is to perpetuate an industry that he loves.”
Stonewall Farm’s first breeding season was 2006, and in order to make a splash in the industry it adopted several creative incentive plans for breeders. One offered free seasons (for stallions the farm owns wholly) to graded stakes-winning or graded stakes-producing mares. Another provides a free return season to stallions for mares that produced a stakes winner from that stallion. A third policy permits a breeder to come back for a free mating for a mare if it produced a top three weanling price for that sire.
In an effort to reach out to some of the lucrative state incentive programs, Stonewall is now offering a complimentary no-guarantee season for approved mares that will foal in Louisiana, New York or Pennsylvania, in exchange for being named co-breeder (the mare owner would remain the full owner of the foal). By so doing, Stonewall would be eligible for half of the breeders awards in those states.
The programs evolved from Stonewall’s owner, Audrey Haisfield, and her husband, Richard, according to Clark Shepherd, a Stonewall manager and pedigree analyst. “They looked at how things were done in the business and decided it didn’t have to be that way,” he said. “We’ve since seen a lot of other outfits begin to follow suit.”
Will the innovative policies, fee reductions and relaxed payment schedules be enough to help breeders return to profitability?
There seems to be no consensus on that question.
“In the face of the financial crisis, a lot of syndicate managers might be a little too dramatic in fee reductions,” said Olin Gentry, “particularly some of the ones that announced a second round of cuts. People are going to breed their mares; they’re just coming in slower because they are tentative, waiting to see if there are going to be more reductions.
“It’s all a cycle. If you put pressure on stallion values, what people are willing to pay for yearlings is affected. You need a happy medium where it’s fair. You don’t want the stallion owners to make all the money and you don’t want it too easy for the breeder. “
Garrett Redmond disagreed. “Owners can avoid a problem in 2010 by not breeding in 2009,” he said. “If stallion managers are serious about helping, they should retroactively reduce the fees contracted in 2008. The least they can do is change the fees coming due to the fees they are advertising for 2009. They might also convert contracts to foal shares or pay when you sell.”
“The one thing you are seeing is no matter what the advertised stud fee is, your client wants to know, ‘Can we do better?’” said Bandoroff.
Another breeder boiled it down to a simple good news/bad news scenario.
"The good news is prices are down for stallions," he said. "The bad news is it shows what deep shit we are in."
(Note to readers: Take our poll on how stallion farms have reacted in the face of the economic crisis and falling bloodstock prices. The Daily Paulick Poll can be found on the left-hand column of the Paulick Report home page.)
Copyright © 2008, The Paulick Report
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Tags: airdrie stud, audrey haisfield, breeders stimulus plan, brereton jones, charlie boden, clark shepherd, commercial breeders, craig bandoroff, darley, denali stud, gaines-gentry thoroughbreds, garrett redmond, indian charlie, jonabell farm, Keeneland, kentucky thoroughbred industry, Lane's End, olin gentry, Paulick Report, pay from proceeds, Ray Paulick, richard haisfield, sheikh mohammed, stallion farms, stonewall farm, stud fees, Thoroughbred breeding, thoroughbred stallions, walmac farm, yearling sales
Posted in Breeding, Kentucky, Stallions, Thoroughbred Business | 1 Comment »
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