Posts Tagged ‘Terry Finley’
Tuesday, November 24th, 2009
By Ray Paulick
Know and Trust is a 2-year-old filly owned by some former clients of bloodstock agent Jim Cullen and trained by Cullen’s childhood friend and college roommate William Denzik Jr.
The filly’s name is something of an inside joke: “know and trust” is an expression Cullen often used when communicating with his clients. Today, many of those clients and a variety of others in the Thoroughbred industry feel they have been betrayed or misled by the man who operates Cullen Bloodstock, the Oakland Group advertising and marketing firm, and the now-defunct Four Board Stables. Cullen is currently licensed as a trainer by the Kentucky Horse Racing Commission. He trains a string of horses for his wife under the name Florence Racing Stable and recently claimed a horse on behalf of Margaux Farm’s Steve Johnson. He also sells horse insurance for Old Colony Insurance Company of Lexington.
“We named the filly as an homage to Cullen,” said John Trumbulovich of Chicago, who first got involved with the Kentucky native in 2006. “Obviously we didn’t know him and certainly shouldn’t have trusted him.”
 Cullen was recently given a one-year banishment from participation at Keeneland Association auctions, based on violation of a Code of Conduct written by the Sales Integrity Task Force, an initiative of the Thoroughbred Owners and Breeders Association. Fasig-Tipton is also enforcing the one-year suspension, which runs through 2010, and other sales companies around the country are considering taking the same action. The sanctions came earlier in November, nine months after Trumbulovich, Kevin Geiger of Colorado and Vincent Colbert of Massachusetts contacted the Task Force with complaints about their former bloodstock adviser. “We could easily have turned our back on this, walked away and say we got screwed,” Colbert said. “We talked it over and decided we didn’t want this to happen to somebody else.”
But that is just the beginning of Cullen’s troubles. He has been sued by several parties, including horse owner Cam Horton, the stallion season firm Early Season Income, National City Bank, and Wells Fargo Bank. The Internal Revenue Service says Cullen owes $233,143.72 in taxes from 2003-05. He agreed in 2007 to pay Cam Horton $333,000 for not reimbursing Horton for a season to A.P. Indy after Horton’s mare aborted, and has not met that obligation. A Fayette County judge has ordered him to pay National City Bank $348,181.65. Wells Fargo is in the process of foreclosing on Cullen’s home.
Cullen has acknowledged under oath that he hasn’t paid stud fees to a number of farms with which he’s done business, that he may have misstated his ownership or equity in horses used as collateral for a line of credit, and that, at the time of the deposition in March 2009, he couldn’t even examine his own books because “I owe my accountant $1,800.”
Several other parties claim Cullen owes them money, but they’ve given up trying to collect. “I lost quite a bit of money but I just had to get away from him, said Banshee Farm’s Scott Mallory, who “inherited” Cullen as a business partner following the 2006 crash of the Comair flight in Lexington that killed his father, Dan Mallory. “You can’t squeeze blood out of a turnip, so I just decided to leave it alone. He’s always promised ‘I’ll get you paid one of these days,’ but it gets to the point that you want to get as far away from him as you can. That’s what most people have done”
Cullen calls the ban by Keeneland the result of “a banking situation…I understand that two of my clients did not receive my proceeds (from sales of horses),” he told the Paulick Report. “The difficulty is that at least one of the people who filed complaints against me (with the Sales Integrity Task Force) owes me money. This has nothing to do with unscrupulous behavior on my part.”
“Everyone’s always gotten what they paid for,” Cullen continued. “I have not held stud fees. I have had trouble with ESI (Early Season Income)—two separate situations that are not applicable to this decision by Keeneland. I have been working in good faith with ESI and everything, for all intents and purposes, is satisfied.”
A number of people would dispute that statement, including an official at Early Season Income. Cullen’s deposition in the National City lawsuit contradicts what he told the Paulick Report about holding stud fees and everyone he’s done business “always” getting what they paid for.
FROM JOURNALISM TO PINHOOKING
Cullen is a former journalist who worked for Thoroughbred Times as a news reporter, then served as editor of the Texas Thoroughbred magazine while contributing to the Blood-Horse as a free-lance correspondent. He also was employed for a short time by the Thoroughbred Owners and Breeders Association based in Lexington. As recently as August of this year, he was a guest speaker at a new owners’ seminar Blood-Horse Publications sponsored in conjunction with the Texas Thoroughbred Association prior to a Fasig-Tipton yearling sale.
He went to work for Terry Finley’s West Point Thoroughbreds in 2001, operating out of a Lexington office until parting ways in 2003. (Finley opted not to comment on Cullen to the Paulick Report, saying only that he strongly urged Cullen not use Finley as a reference in future job applications.) He also worked briefly selling stallion seasons for Adena Springs in 2006. That ended, according to Jack Brothers, a longtime bloodstock adviser to farm owner Frank Stronach, because of “misappropriated funds.” Cullen claims that Adena owes him money.
A $40,000 purchase of an El Prado yearling in 2003 that turned into a $360,000 pinhooking success the following year put Cullen on the map as a bloodstock agent, and he was able to establish a significant line of credit with National City Bank.
Cullen bought horses at public auction and formed syndicates to race or breed and charged administrative or management fees. Among the partners were Trumbulovich, Geiger and Colbert. Geiger first started asking questions of Cullen about some of the financial aspects of the partnership, among them: how were purse earnings or sales proceeds being distributed? When he didn’t get satisfactory answers Geiger started networking with some of the other partners, including Trumbulovich and Colbert. “It opened a floodgate,” Trumbulovich said.
“Nobody that dealt with him knew who owned what,” said Mallory.
‘I’M A GOOD HORSEMAN. I’M OBVIOUSLY NOT A GOOD BUSINESS PERSON’
A number of mares in the partnerships were bred, and the partners were billed for stud fees, which they subsequently paid for, according to Cullen’s sworn testimony in the March 2009 deposition involving the National City Bank lawsuit. Under questioning from attorney Emily Cowles of Morgan & Pottinger (representing National City) and Mike Meuser of Miller Griffin and Marks (representing Trumbulovic, Colbert and Geiger), Cullen admitted that on numerous occasions he did not use the money billed to clients for stud fees to pay those fees. Many of the fees were never paid to the farms.
Here is an excerpt regarding Cullen’s purchase of stallion seasons, the billing of clients and non-payment to farms:
MEUSER: Okay, and I can show you the other invoices. But on each occasion that you billed Mr. Colbert or Mr. Geiger or Mr. Trumbulovic for these stud feeds you labeled them specifically on your invoice that that’s what they were being billed for.
CULLEN: Correct. Yes, sir.
MEUSER: All right. And you had made the contractual arrangements with the farms to obtain those seasons?
CULLEN: Correct.
MEUSER: And you knew that when you received those monies from my clients you were obligated to to use them to satisfy those obligations?
CULLEN: See, I didn’t know that. I thought like I, like I’ve made clear, I thought that the whole protection of an LLC was designated to give you license to use that to the best benefit of the company as provided you satisfied what this obligation was for.
MEUSER: Well, you can certainly understand…
CULLEN: I can understand. Yes, sir.
MEUSER: … that a client who received this bill and paid it would have the expectation that their agent who they trusted would use those monies properly?
CULLEN: Yes, sir. Yes, sir. I, I agree to that. I mean.
MEUSER: That’s all I have.
CULLEN: Okay.
Meuser and Cowles coaxed out of Cullen admissions that sale proceeds from horses had not been distributed to partners, that stud fees to stallions had not been paid, and that farms often attached liens to the horses being sold, at times without the knowledge of the partners who had paid the stud fees to Cullen. He called the incidents inadvertent errors, and at one point said, “I’m a good horseman. I’m obviously not a good business perso.”
Cullen also admitted that he had not paid Fasig-Tipton for at least two horses he had purchased from the company, including a $100,000 yearling by Yankee Gentleman out of Silver Spool, later named Patsy Ann. Cullen said in his deposition that he has a signed agreement with Fasig-Tipton to pay for the horses because, as he told Fasig-Tipton executive Boyd Browning, “I don’t have it,” when asked for the money to pay for them. He had made no payments on the agreement as of March 2009. “There isn’t a hard schedule…basically it’s open-ended,” he told Cowles under questioning.
“Wow,” was all Cowles could say in response.
“Again,” said Cullen, “I think he’s (Browning)—given the economic climate and the fact he knows I’m a good pay I think he’s—well there’s been one payment made of $4,000….”
“So do you still owe Fasig-Tipton a hundred grand for Patsy Ann,” Cowles asked.
“I do,” said Cullen. “I, I owe them. Technically when we discussed it, and I hope, I don’t think Boyd would mind me sharing, he was willing to basically write it off. And I’m the one that said no. I bought it. I owe you. I will pay you. Just give me the time to pay it off. Anybody that I, I again, I haven’t declared bankruptcy. I’m not running. Any of the accounts I’ve made I’ve been—I will acknowledge and be responsible for. And Boyd knows me and knows that my word is good and I think that’s why he’s allowing me to pay this off.”
When I called Browning at Fasig-Tipton and asked if Cullen owes money to the company, he said, “I’m not going to answer that question. I’m uncomfortable answering that question. It wouldn’t be prudent. His banning (from participation in sales) is not related for any failure to pay money.”
I then told Browning that Cullen said in the deposition that Browning thought Cullen was “good pay.” If put under oath, I asked, would Browning agree with that statement?
There was a pause, followed by a long, slow chuckle. “If I was under oath I would have to answer that question, but I’m not under oath,” Browning said. “I would rather not have Mr. Cullen speak for me.”
Cullen’s relationship with homebuilder Cam Horton began in Dec. 2005 when Horton agreed to buy a season to A.P. Indy through Cullen Bloodstock for $318,000 to use to breed to his mare, Private Pursuit. Cullen would receive a $15,000 fee. The agreement called for the fee to be refunded if the mare did not get in foal or lost her pregnancy. On Oct. 12, 2006, after being pregnant to the cover of A.P. Indy, Private Pursuit aborted, but Horton didn’t get his money back from Cullen. Cullen wrote a letter to Horton in February 2007, saying he was owed $105,000 from Adena Springs for his commissions in “selling $21 million in stud fees,” would sell some horses. In addition, he wrote, he was owed $42,000 in stallion fees and $34,000 was “owed to me by a multi-millionaire who just refuses to pay me even though he acknowledges the debt.”
Horton never got paid and took him to court. In July 2007, Cullen agreed to pay $333,000, with $25,000 payable at the time of the agreement, $75,000 due on or before Aug. 1, 2007, $100,000 due on or before Oct. 1, 2007 andd the balance due by Dec. 31, 2007. Horton’s attorney, Phillip Scott, said Cullen didn’t meet the obligation. “The agreement wasn’t worth the paper it was printed on,” Scott said.
‘YOU CAN GET AWAY WITH A LOT IN THIS BUSINESS’
Of all those who have dealt with Cullen in recent years, no one knows him better than trainer Denzik, who went to grade school, middle school and high school with Cullen, then roomed with him in college. He trained several horses for Cullen’s Four Board Stable partnership until their relationship went sour a couple of years ago.
“We were best friends,” Denzik told the Paulick Report, “but I haven’t talked to him for a year and a half. He wasn’t paying his bills. He was collecting the money from the people in the partnerships and kept it. I know most of the clients and they were a bunch of good people. He owes me over $20,000. We spent about $10,000 on an attorney, but once I got that bill I said this is ridiculous. We probably lost $30,000, but it may be the best $30,000 I ever lost, just to get him out of my life.”
Denzik, like many of the others who have been involved with Cullen, said he has an engaging personality and is a smooth talker.
“He did some acting when he was younger, and he can pull a different personality out when he needs too,” said Denzik. “When I look at him now and look back I can see he was well prepared to do what he’s been doing. People love him at first. He uses his acting ability, his writing ability and he’s personable…but it’s a bunch of b.s. He steals from people. The big questions we’ve all got is where the money went.
“There was always a little bit of a shady side to him,” Denzik said. “As we’ve gotten older it brought out the crook in him that probably has been in him a long time. He figured out you can get away with a lot in this business. I hope he gets put in jail."
Copyright © 2009, The Paulick Report
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Tags: a.p. indy, adena springs, blood-horse, boyd browning, cam horton, cullen bloodstock, dan malory, early season income, emily cowles, fasig-tipton, florence racing, Jack Brothers, jim cullen, john trumbulovich, kevin geiger, know and trust, mike meuser, national city bank, oakland group, old colony insurance, patsy ann, Paulick Report, Ray Paulick, sales integrity task force, scott mallory, steve johnson, Terry Finley, texas thoroughbred association, Thoroughbred Owners and Breeders Association, thoroughbred times, vincent colbert, west point thoroughbreds, william denzik jr.
Posted in People, Thoroughbred Auctions, Thoroughbred Business | 55 Comments »
Saturday, October 31st, 2009
By Ray Paulick
Please click here to donate to Breeders’ Cup Charities benefiting the Permanently Disabled Jockeys Fund and V Foundation for Cancer Research. Give a minimum of one penny per mile and you will be eligible for a drawing to win one of 10 Breeders’ Cup caps to be signed by the winning jockeys of all 14 Breeders’ Cup races this Friday and Saturday.
Saturday was supposed to be strictly a driving day for the BREEDERS’ CUP OR BUST fundraising drive, but Brad Cummings and I never met a racetrack we didn’t like, so when we saw that Will Rogers Downs was just a couple miles from the Claremore, Okla., exit on I-64, we felt compelled to stop.
The fundraising drive, done in partnership with Breeders’ Cup Charities, will benefit the Permanently Disabled Jockeys Fund and the V Foundation for Cancer Research.
 There was no live racing going on at WRD, but plenty of slot machines, simulcasting and a friendly staff. We even saw a patron arriving on horseback—not something you see every day.
The simulcast room was relatively full, and we talked with one of the regulars, a fellow who looked like a love child of Yosemite Sam and ZZ Top. He was a serious player, bringing a briefcase full of trip notes on tracks around the country, but said he was looking forward to the live meeting that begins at WRD in February. “The racing’s gotten pretty good here,” he said. “Some of the horses from the Fair Grounds and Oaklawn Park will show up.”
This is one of those racetracks that probably wouldn’t be in business were it not for slot machines, or in this case Indian gaming. Will Rogers Downs is owned by the Cherokee Nation, one of three Indian tribes that own racetracks in Oklahoma. The Choctaw Nation owns Blue Ribbon Downs in Sallisaw. That’s the track where jockey Mark Pace died earlier this month. Since that tragedy, the Choctaws announced they will be closing the track because of economic reasons related to the track’s location.
Tomorrow, we’ll be visiting Remington Park, which recently was purchased by Global Gaming Solutions, a subsidiary of the Chickasaw Nation. No track has taken ahold of the bit on raising funds for the BREEDERS’ CUP OR BUST drive like Remington Park has, and I think we’ve got an exciting and gratifying day ahead of us tomorrow. Scott Wells and his staff have gone above and beyond any of our wildest expectations, and we owe a special thanks to Joy Rose Murphy, the track’s promotions coordinator.
I’m not sure I’ll feel the same way after tomorrow’s “Hippity Hop” race, when Brad and I mount giant rubber balls and bounce our way down the track against members of the local jockey colony. But if you’re going to be humiliated, you might as well do it for a good cause.
On a serious note: If our experiences with Remington Park under its new ownership are any indication, horse racing is going to benefit from the Chickasaws’ involvement in the industry. It appears they understand the value of good corporate citizenship.
The visit with Michael Straight and his family at the Rehabilitation Institute of Chicago will be with us for a long time. Sadly, just in the last 24 hours we’ve learned of more spills and mishaps involving jockeys, beginning with an accident at Keeneland involving Julia Brimo, a Sovereign Award winner as leading apprentice in Canada. She was listed in critical condition at a Lexington hospital. Apprentice Amanda Casey, who earlier on Friday at Aqueduct celebrated her first win of the meeting, ended up at a New York hospital with a bruised liver after getting kicked in a paddock mishap. Earlier today, we learned that Omar Moreno was involved in a spill at Woodbine in Canada.
The beat goes on, and so does the industry’s need to help provide for jockeys who are permanently disabled from riding accidents. If you haven’t made a donation to Breeders’ Cup Charities to benefit the Permanently Disabled Jockeys Fund and the V Foundation for Cancer Research, please do so by clicking here.
 After Friday’s visit with the Straight family, we headed south and encountered heavy rainfall alongo the way. We thought we’d stop in and catch some racing at Fairmount Park’s simulcast room late in the afternoon, but didn’t bring our waders to walk through the parking lot to the front door. Apparently we’d just missed a heavy storm that flooded the parking lot and other businesses in the St. Louis area.
Our Saturday began with a tasty breakfast at a Waffle House in Springfield, Mo., in the Ozarks. I thought I’d walked into a bizarre rehearsal for the Rocky Horror Picture Show, but Brad reminded me that it was Halloween morning, and the crew was just having a little fun. Too bad. I think the Rocky Horror Waffle House could be the next big thing in the franchise world.
Sponsors for the Chicago to Oklahoma City portion of this fundraising drive are: Global Gaming Solutions and Remington Park; Terry Finley and his West Point Thoroughbreds partners; Tommy Simon’s Vinery; and Rick Porter’s Fox Hill Farm.
Sponsors for our previous segments were TVG; Bill Casner and WinStar Farm; Barry Irwin of Team Valor International; Kate Lantaff of Tahoma Stud; the William S. Farish’s Lane’s End, Sheikh Mohammed’s Darley, Brereton C. Jones’ Airdrie Stud and the Young family’s Overbrook Farm.
A special thanks to our media partner TVG and the TVG’s online community for playing such a big part in promoting the drive and raising awareness and money for these charities. All sponsorship dollars go directly to Breeders’ Cup Charities, to be divided evenly between the Permanently Disabled Jockeys Fund and the V Foundation for Cancer Research.
Tags: airdrie stud, Bill Casner, blue ribbon downs, Brad Cummings, Breeders' Cup Charities, breeders' cup or bust, Brereton C. Jones, cherokee nation, chickasaw nation, choctaw nation, darley, fox hill farm, joy rose murphy, Kate Lantaff, Lane's End, michael stgraight, overbrook farm, Paulick Report, pdjf, permanently disabled jockeys fund, Ray Paulick, remington park, rick porter, scott wells, Tahoma Stud, team valor, Terry Finley, tvg, v foundation, Varry Irwin, vinery, west point thoroughbreds, will rogers downs, William S. Farish, winstar farm
Posted in Jockeys, breeders' cup or bust | 7 Comments »
Thursday, October 29th, 2009
By Ray Paulick
When Eye of Taurus and Bluegrass Princess swept the Pin Oak Valley View Stakes last week at Keeneland for trainer Kiaran McLaughlin, it vaulted the New York-based native of Kentucky to the lead among trainers of American Graded Stakes winners for 2009.
The wins represented the 12th and 13th individual American Graded Stakes winners of the year for McLaughlin, who ranks fifth among North American trainers by money won (click here for those standings) behind Steve Asmussen, last year’s Eclipse Award winner as outstanding trainer and the leading candidate to win again this year. Asmussen, with 11 individual AGS winners, is well ahead in the standings by money won, with $18.7 million. Todd Pletcher, second to Asmussen by money won with $12.8 million, also has 11 individual AGS winners of 2009.
While McLaughlin-trained horses have won only $6.5 million, he’s had just over one-fifth the number of starts that Asmussen’s had (2,403 for Asmussen, 511 starts for McLaughlin). As he said to Karen Johnson in an interview at ntra.com, McLaughlin has purposely cut back on the number of horses in his stable, ending a relationship with West Point Thoroughbreds and focusing more on the Darley and Shadwell Stables owned by Sheikhs Mohammed and Hamdan al Maktoum of Dubai. "Kiaran is a first-class guy," said Terry Finley who runs West Point and described the parting as completely amicable.
McLaughlin’s greatest success came with Shadwell’s 2006 Horse of the Year Invasor. “Shadwell has always enjoyed a very special relationship with Kiaran," said Rick Nichols, vice president and general manager of the operation. "We have gone through many good times as well as many bad times together. He is an excellent trainer and has a terrific organization of assistants and staff. His integrity is beyond reproach and always has in mind what to do best for the horse.
"On a personal note, I consider him a great friend and respect him both as a horseman, a friend and a wonderful family man."
Despite the lead in saddling the number of AGS winners, I’d still consider McLaughlin a longshot this year to win his first Eclipse Award as outstanding trainer. While the Breeders’ Cup could tilt the scales, the current favorite would be Asmussen, followed by the 2009 leader in saddling the most Grade 1 winners, Bob Baffert.
Baffert has six individual G1 winners this year, twice the number Pletcher, Asmussen and Bill Mott, who have three apiece. McLaughlin has saddled two G1 winners in 2009.
A lot of that could change by the end of next weekend.
Tags: bill mott, Bob Baffert, darley, kiaran mclaughlin, rick nichols, shadwell, steve asmussen, Terry Finley, todd pletcher, west point
Posted in American Graded Stakes Standings, Keeneland | 1 Comment »
Tuesday, September 9th, 2008
Musselman, in fact, seems almost obsessed with the Paulick Report, based on the number of recent references he’s made in his newsletter, which stands true to its motto: “We never let the truth get in the way of a good story.” The most recent reference to the Paulick Report can be found in today’s Indian Charlie, in which Musselman comments on the Paulick Report’s recent two-part series about Keeneland’s very profitable history ( Lexington’s Fort Knox) and current governance and ownership ( Who Owns Keeneland?).
Since the June 16 launch of the Paulick Report, Musselman has shown a potential “man crush,” writing six fictional stories about the Paulick Report and its editor and publisher, Ray Paulick. References to the Paulick Report since June 16 can be found here, here, here, here, here and here.
That number puts the Paulick Report in good company with such regular Indian Charlie cast members as Jerry Bailey, Bob Baffert, Cot Campbell, Robert Clay, Christophe Clemente, Terrence Collier, Bob Evans, Terry Finley, Arthur Hancock, Barry Irwin, Ken McPeek, Niall O’Callaghan, and Dallas Stewart.
“We would like to sincerely thank Mr. Musselman and his billionaire Jockey Club member ghostwriters for the free publicity,” Ray Paulick told the Paulick Report in an exclusive interview, “and we encourage all of them to keep up the good work. Of course, we hope his ghostwriters are able to continue doing such a terrific job running the Thoroughbred industry.”
Copyright © 2008, The Paulick Report
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Tags: arthur hancock, barry irwin, Bob Baffert, bob evans, christophe clemente, cot campbell, dallas stewart, ed musselman, indian charlie, jerry bailey, Jockey Club, ken mcpeek, niall o'callaghan, pacemaker, Paulick Report, Ray Paulick, Robert Clay, terrence collier, Terry Finley
Posted in Jockey Club, People, Racing Media | 31 Comments »
Sunday, July 20th, 2008
Saratoga typically dominates the racing scene in late July and August, so it was good news for Del Mar that the West Coast track had its opening a week earlier than the Spa this year, putting it in the national spotlight at least for a few days.
And a very good debut it was, with the largest opening-day crowd in history – despite an increase in parking and admission prices, soaring gasoline prices and a spiraling economy. A stubborn TVG (do they have any friends left in the industry?) continues to make it difficult for fans to wager online, and that factor had to contribute to a 10% drop in handle.
Last year’s problems with the newly installed Polytrack (the afternoon heat softened the wax, making it more like mushytrack) seem to have been corrected, and the race times in the afternoon are several seconds faster than they were in 2007. Just as important, the track is safe – so far. But horseplayers can’t be blamed for holding back a bit on their Del Mar wagers if they’re uncertain about the kind of track they’ll be getting. More closers than front-runners seem to be winning, but the track is playing fair.
Speaking of playing fair (or not), why did the controlling members of the Breeders’ Cup board of members and trustees gang up to keep NetJets founder Richard Santulli off the 14-member operating board of directors in a recent election? Santulli is a highly respected businessman who brings everything to the table you’d think the Breeders’ Cup board needs. Apparently, however, he lacked the one thing the controlling members wanted: a nodding head.
One fellow the controlling board members favor is Terry Finley, the founder and president of West Point Thoroughbreds, a successful racing partnership. The week after Finley was re-elected to the Breeders’ Cup board, the organization teamed up with West Point in a creative promotion for the popular ESPY Awards on ESPN that gave all the participating celebrities and athletes the opportunity to redeem a free share in a West Point horse and enjoy a free, VIP trip to the Breeders’ Cup championships. West Point in turn would be able to promote the celebrity/athletes as a West Point partner. No matter how innocent the choice of West Point may have been, it’s amazing no one within the Breeders’ Cup saw the potential to read this as another good ol’ boy deal of “we’ll scratch your back if you scratch ours.”
A guest editorial submitted to the Paulick Report by Kentucky Congressman Ed Whitfield is sure to have heads shaking with disagreement in some corners over Whitfield’s proposal to amend the Interstate Horseracing Act of 1978 to address some of the issues the industry is struggling with, including medication. Kentucky’s newly configured racing commission and the California Horse Racing Board took steps this past week to regulate anabolic steroids, and that’s a good thing, but Whitfield’s efforts may be gaining momentum in Congress.
A Paulick Report reader called it typical for the “land of fruits and nuts” when Calilfornia Gov. Arnold Schwarzenegger appointed former actress Bo Derek to the California Horse Racing Board, but what’s wrong with having someone whose life is largely committed to the protection of animals (horses in particular) on a governmental board that regulates horse racing? We weren’t the only one to call the appointment a “10.”
Interesting that on the same day the Paulick Report was writing about the death of print coverage of horse racing (at least in the Los Angeles Times, the nation’s fourth-largest newspaper that axed its two racing writers) , Jess Jackson was stimulating interest with an online poll asking the public to help him guide Curlin through the rest of his racing career. Sure, it’s a gimmick, but it’s a smart one that got a lot of people talking about racing’s biggest star instead of racing’s biggest problems. Within a couple of days, more than 10,000 people had voted in the poll. Go here to vote or see the current results of the poll.
Anyone else wondering what’s up at the Downs? Churchill Downs, the publicly traded company cut a couple of dozen jobs this past week in the wake of a falling share price. CEO Bob Evans hasn’t pulled a rabbit out of his hat yet, and neither has the team of techies he put together in California’s Silicon Valley to develop new products and ideas. Confrontations with horsemen over distribution of account wagering revenue haven’t been productive to Churchill Downs or the industry.
By Ray Paulick
Copyright ©2008, The Paulick Report
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Tags: arnold schwarzenegger, bo derek, bob evans, Breeders' Cup, breeders' cup board, California Horse Racing Board, churchill downs, Curlin, Del Mar, ed whitfield, espy awards, interstate horse racing act, jess jackson, los angeles times, Paulick Report, polytrack, Ray Paulick, richard santulli, saratoga, Terry Finley, west point thoroughbreds
Posted in Week in Review | 3 Comments »
Friday, July 18th, 2008
Though a leading Thoroughbred owner said "it didn’t pass the smell test," there was nothing fishy about a Breeders’ Cup board member getting a potentially huge publicity boost when the Breeders’ Cup placed a free ownership interest in some of his horses in 125 "gift bags" distributed to prominent celebrities and athletes attending Wednesday night’s ESPY Awards in Los Angeles. At least that’s the word from the Breeders’ Cup executive who put the promotion together.
ESPY host Justin Timberlake, presenter Will Ferrell and star athletes ranging from David Beckham to Brett Favre and Danica Patrick were among those who received the 125 gift bags loaded with goodies: apparel, luggage, jewelry, technology, spa treatments and entertainment experiences were among the 50-plus freebies stuffed in each bag and handed out to the celebrities attending the ESPY Awards, which was taped Wednesday and airs Sunday night on ESPN at 9 p.m. Eastern.
According to Peter Rotondo, vice president of media and entertainment for the Breeders’ Cup, Indy car driver Helio Castroneves went through the gift bag for the ESPY telecast and identified the Breeders’ Cup package, which included a VIP experience at this year’s event and a small ownership interest in a horse, as the "number one" giveaway because "I get to own a horse." The certificate included a large cardboard cutout of a racehorse.
The horse ownership is a 2% stake in one of three Thoroughbreds offered by New Jersey-based West Point Thoroughbreds. To claim ownership to the non-transferable certificate, the athlete or celebrity must call West Point to redeem the certificate and agree to allow their name to be used in future promotions by West Point.
Rotondo said West Point was the only racing partnership contacted about the promotion. West Point is operated by Terry Finley, a member of the 14-member Breeders’ Cup board of directors who was recently re-elected in a hotly contested vote July 11 among the 48-member board of members and trustees. Finley is also a close friend of Breeders’ Cup CEO Greg Avioli.
And those factors, a competing racing partnership owner said, "didn’t pass the smell test."
"That is so predictable," another partnership operator said. "This is a great opportunity for West Point to promote its business. It was an inside job, obviously. It’s just the way they go about their business at the Breeders’ Cup."
A third individual, who sits on the board of members and trustees, called the non-bid selection of West Point "outrageous," adding: "It’s clear the Breeders’ Cup board doesn’t feel accountable to the members and trustees or to the rest of the nominators who fund the entire organization."
Peter Land, the chief marketing officer and Rotondo’s boss at Breeders’ Cup, defended the practice. "My job is to work with the board," Land said. "Different board members offer up different ideas. We have a great relationship with our board members, and have worked with (board members) R.D. Hubbard and B. Wayne Hughes on other projects. Terry (Finley) was very receptive to (the ESPY promotion), so we worked with his marketing people."
Asked whether it was "free" publicity for West Point, Land said that it wasn’t: "He’s got to give up partnership interests in the horses," Land said.
Rotondo said he gave no thought to whether or not Finley was a board member when he contacted his close friend, Justin McDonald, a former associate of Rotondo from his days at the NTRA who is now doing marketing work for West Point.
"The whole point of doing this was to get a little buzz for the Breeders’ Cup," Rotondo said. "The second thing was, let’s do something cool to give people something to talk about it. Third, it’s great for West Point if someone redeems the certificate. When I brought the idea to Justin, who’s like a brother to me, he said, ‘We’ll do it.’"
In hindsight, Rotondo admitted the selection of West Point "could" give them a leg up on other racing partnerships in the competitive marketing battle for new investors and racehorse partners.
"Look, it’s good for the whole sport if Justin Timberlake wants to own a piece of a horse," Rotondo said.
And it’s even better for West Point Thoroughbreds to land a celebrity racehorse owner.
Rotondo’s concept was extremely clever, and if anyone redeems the ownership certificates it’s a winner. It’s a good way to generate publicity involving the Hollywood celebrities the Breeders’ Cup desperately want to bring to their championship races at nearby Santa Anita Park this year and in 2009. It’s too bad other partnerships weren’t invited to participate or even bid on the promotion.
An unintended consequence of this promotion will be hard feelings among those who were left out of the process.
By Ray Paulick
Copyright ©2008, The Paulick Report
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Tags: Breeders' Cup, brett favre, danica patrick, david beckham, espy awards, Greg Avioli, Horse Racing, justin timberlake, Paulick Report, peter land, peter rotondo, racehorse ownership, racing partnership, Ray Paulick, santa anita, Terry Finley, west point thoroughbreds
Posted in Breeders' Cup, Marketing, Television | 15 Comments »
Monday, July 14th, 2008
On the surface, it seems unfathomable that the 40-some members and trustees, founding members and officers of the Breeders’ Cup who select the organization’s operating board of directors could have rejected Richard Santulli, whose business acumen is such that he is on the short list of candidates to succeed Warren Buffett, the “oracle of Omaha,” as chairman of Berkshire Hathaway. But that’s what they did on Friday, when the group voted to fill seven positions on the 14-member board. Neither Santulli, a New Jersey-based Thoroughbred owner and breeder, or Hill ‘n’ Dale Farm owner John Sikura received enough votes to secure a board seat.
The members and trustees re-elected all five of the candidates who sought re-election to two-year terms: Breeders’ Cup board chairman Bill Farish of Lane’s End Farm, Antony Beck of Gainesway Farm, Terry Finley of West Point Thoroughbreds, racetrack and casino owner R.D. Hubbard, and Satish Sanan of Padua Stables. Two open seats, made possible when board members Robert Clay and Joseph Shields Jr. were voted off the board of members and trustees by Breeders’ Cup nominators, were filled by Helen Alexander of Middlebrook Farm and Roy Jackson of Lael Stables.
Those seven are joined on the Breeders’ Cup board by the following individuals who were elected to two-year terms in 2007: Reynolds Bell Jr., Donald Dizney, Tracy Farmer, B. Wayne Hughes, G. Watts Humphrey Jr., and Robert Manfuso. The 14th board position is filled by the Breeders’ Cup CEO, Greg Avioli.
It is widely believed that the xenophobic duo of Farish and his father, Will, the vice chairman of the Jockey Club, lobbied heavily with the members and trustees to keep Santulli and Sikura off the board. Ironically, Santulli has been a client of Lane’s End, keeping mares at the Versailles, Ky., farm. Both Santulli and Sikura have been outspoken in their criticism of various aspects of the Breeders’ Cup in recent years. NetJets, the company Santulli founded and which is now part of the Berkshire Hathaway empire, was a Breeders’ Cup sponsor for several years but did not renew its sponsorship in 2008.
New Jersey-based Thoroughbred Daily News publisher Barry Weisbord, a close associate of Santulli, is believed to have lobbied to get Santulli elected. In addition, a number of Kentucky-based members and trustees pushed for the election of Sikura.
Simply put, Farish had the most juice in this election, and sources say it wasn’t even close.
The two new board members, Alexander and Jackson, represent old money. Alexander is an heir to the massive King Ranch, which raced 1946 Triple Crown winner Assault. She is widely respected for her independence and toughness, and support for her candidacy likely reached across the various factions.
Jackson, an heir to the Standard Oil fortune through his grandfather, William D. Rockefeller, is best known as the owner-breeder with wife Gretchen of Barbaro, the Kentucky Derby winner whose injury in the Preakness and unsuccessful battle to survive was a closely followed national drama two years ago. Having the conservative and low-keyed Jackson seek election was a stroke of genius by whoever convinced him to run. He and his wife, along with trainer Michael Matz, jockey Edgar Prado and veterinary surgeon Dean Richardson, were the human elements in the Barbaro story, and the Jacksons received plaudits from all corners for their handling of the horse’s post-Preakness struggles.
I’ve never heard anyone compare Jackson’s business experience with that of Richard Santulli, or his knowledge of the horse industry with John Sikura. But he is without enemies in the business and doesn’t make waves: a sure-fire qualification for an endorsement from the Farishes.
The respect for Alexander and the affection for Jackson notwithstanding, the rejection of a highly successful businessman like Santulli is mind-boggling. If he is good enough to be a candidate to run Berkshire Hathaway, it’s almost comical to think he would not be an asset on the Breeders’ Cup board.
The only conclusion I can make is that the most influential board members, led by Bill and Will Farish, are interested only in maintaining power by preventing individuals with different points of view from getting elected.
“Billionaires run the industry,” one horseman said to me after the election. “The only way to beat them is on the racetrack.”
By Ray Paulick
Copyright ©2008, The Paulick Report
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Tags: Antony Beck, b. wayne hughes, Barbaro, berkshire hathaway, Bill Farish, Breeders' Cup, donald dizney, g. watts humphrey jr., Greg Avioli, Helen Alexander, Horse Racing, John Sikura, Joseph Shields, king ranch, lael stables, netjets, Paulick Report, R.D. Hubbard, Ray Paulick, reynolds bell jr., richard santulli, Robert Clay, robert manfuso, Roy Jackson, satish sanan, Terry Finley, tracy farmer, Warren Buffett, Will Farish
Posted in Breeders' Cup | 7 Comments »
Thursday, July 3rd, 2008
The startling election results for the Breeders’ Cup board of members and trustees conducted among nominators to the program teaches us one thing about this relatively new process: no single farm or entity can stack the board with its own candidates.
That is driven home by the fact that Robert Clay of Three Chimneys Farms, the current vice chairman of the Breeders’ Cup board of directors (the 14-person board elected by the 48 members and trustees), did not receive enough votes to retain his spot as a member/trustee. It is confirmed again by the election loss of James McAlpine, a longtime Magna executive associated with Frank Stronach, who presumably would have thrown the considerable clout of his Adena Springs Farm behind McAlpine in the Breeders’ Cup election process that Stronach himself helped bring about through reforms in governance several years ago. (Those reforms were detailed in a two part series in the Paulick Report: Part 1, Part 2). In voting conducted during the month of June, Breeders’ Cup nominators received one vote for every $500 they paid in foal or stallion nominations. Stallion farms with the high-end stud fees obviously hold the most votes, since a $100,000 stud fee would give a farm 200 votes in the process. Yet even with a Three Chimneys stallion roster that currently includes $460,000 in annual “published” stud fees (and, thus, 920 votes, theoretically), Clay was unable to secure enough votes to retain his seat on the board of members and trustees.
As a result, Clay, who has served on numerous industry organization boards over the last 25 years, will not be eligible to run for re-election to a two-year term on the 14-member Breeders’ Cup board of directors, the group that makes the key operational decisions for the organization. That election will be held during a meeting of the newly elected board of members and trustees in Lexington July 11. To be eligible to run for the board of directors, an individual must be on the larger board of members and trustees. Just as consensus building is necessary to get federal legislation passed in Congress, individuals seeking seats as Breeders’ Cup members/trustees must build coalitions among different groups of nominators. Clay apparently did not do that; nor did three others seeking re-election on the board of members and trustees: Robert Cromartie, Leverett Miller, and Joseph Shields, Jr.
Elected to the board of members and trustees were Helen Alexander of Middlebrook Farm; Doug Cauthen of WinStar Farm; Bill Farish Jr. of Lane’s End; Terry Finley of West Point Thoroughbreds; Lucy Young Hamilton of Overbrook Farm; Maria Niarchos-Gouaze of Poseidon Services Inc; Charles Nuckols III of Nuckols Farm; Bill Oppenheim, a bloodstock agent who writes for Thoroughbred Daily News; Don Robinson of Winter Quarter Farm; Mark Taylor of Taylor Made Farm; Charlotte Weber of Live Oak Stud; and Barry Weisbord, publisher of Thoroughbred Daily News. Of that group, Alexander, Farish, Young Hamilton, Niarchos-Gouaze, Nuckols, and Taylor were re-elected.
In addition to Clay, Cromartie McAlpine, Miller and Shields, the following nominees to the board of members and trustees did not get enough votes for election: Bobby Flay, Arnold Kirkpatrick, Allan Lavin Jr. and Ric Waldman.
Seven of the 14 board of director seats will be open for nomination during the July 11 election, including the seats that have been held by Clay and Shields, whose terms expire. With their required departure, there will be at least two new members elected. In addition, the two-year terms of Antony Beck, current board chairman Bill Farish Jr., Terry Finley, R.D. Hubbard and Satish Sanan also expire, with each eligible for re-election.
The smaller board of director positions are staggered, and the following six individuals were elected to two-year terms in July 2007: Reynolds Bell Jr., Donald Dizney, Tracy Farmer, B. Wayne Hughes, G. Watts Humphrey Jr., and Robert Manfuso. The 14th board position is filled by the Breeders’ Cup CEO, Greg Avioli.
It may be noteworthy that Clay, Miller and Shields were considered part of the “old guard,” as each are members of the Jockey Club, which for decades has tried to assert control over many industry organizations. Not everyone newly elected or re-elected to the board of members and trustees can be classified as “old guard” or “new guard,” but victories by Doug Cauthen, Bill Oppenheim and Barry Weisbord clearly indicate that efforts were made by nominators with large blocs of vote to inject new blood into the organization that runs the two-day championships scheduled to be held for the next two years during the Oak Tree Racing Association meeting at Santa Anita Park in Southern California.
What new alliances are formed among the newly seated board of members and trustees will determine who is retained, newly elected or rejected from the smaller board. That new board, to be seated in September, will determine whether Bill Farish will remain chairman and will also elect a vice chairman of the board. More importantly, the new board will control the fate of the Breeders’ Cup—at least until the next election.
By Ray Paulick
Copyright ©2008, The Paulick Report
Tags: Allan Lavin Jr., Arnold Kirkpatrick, b. wayne hughes, Barry Weisbord, Bill Farish Jr., Bill Oppenheim, Bobby Flay, Breeders' Cup, Breeders' Cup board of directors, Charles Nuckols III, Charlotte Weber, Don Robinson, donald dizney, Doug Cauthen, Frank Stronach, g. watts humphrey jr., Greg Avioli, Helen Alexander, Joseph Shields Jr., Leverett Miller, Lucy Young Hamilton, Maria Niarchos-Gouaze, Mark Taylor, Paulick Report, Ray Paulick, reynolds bell jr., Ric Waldman, Robert Clay, Robert Cromartie, robert manfuso, Terry Finley, tracy farmer
Posted in Breeders' Cup, Industry | Comments Off
Wednesday, July 2nd, 2008
Robert Clay, the owner of Three Chimneys Farm and vice chairman of the 14-member Breeders’ Cup board of directors, did not receive enough votes from nominators to retain his seat on the organization’s 48-person board of members and trustees, the Paulick Report has learned. In something of a changing of the guard for the Breeders’ Cup, Clay was one of four incumbents on the board of members and trustees who was not re-elected. The others were Robert Cromartie, Leverett Miller and Joseph Shields Jr., the latter also a member of the smaller board of directors.
Voting took place during June, with nominators getting one vote for each $500 spent for foal or stallion nominations. Farms with major stallions or a large number of nominated foals had the largest blocs of votes.
Elected to the board of members and trustees were Helen Alexander, Doug Cauthen, Bill Farish Jr., Terry Finley, Lucy Young Hamilton, Maria Niarchos-Gouaze, Charles Nuckols III, Bill Oppenheim, Don Robinson, Mark Taylor, Charlotte Weber, and Barry Weisbord. Of that group, Alexander, Farish, Young Hamilton, Niarchos-Gouaze, Nuckols, and Taylor were re-elected. Farish, son of Lane’s End owner William S. Farish, is chairman of the Breeders’ Cup board.
The nine nominated for board of members and trustees positions but not receiving enough votes for election were: Clay, Cromartie, Bobby Flay, Arnold Kirkpatrick, Allan Lavin Jr., James McAlpine, Miller, Shields Jr., and Ric Waldman.
The primary purpose of the 48-member board of members and trustees is to elect 13 members to two-year terms on the board of directors (the 14th board seat is filled by Breeders’ Cup CEO Greg Avioli). To be elected or re-elected to the board of directors, an individual must be on the larger board of members and trustees. That group meets in Lexington, Ky., July 11 to elect seven individuals for the open positions on the board of directors. Two of the seven — Clay and Shields — are now ineligible to run. The other five whose terms are expiring and will be eligible for re-election are Antony Beck, Farish, Finley, R.D. Hubbard and Satish Sanan.
By Ray Paulick
Copyright ©2008, The Paulick Report
Tags: Allan Lavin Jr., Arnold Kirkpatrick, Barry Weisbord, Bill Farish Jr., Bill Oppenheim, Bobby Flay, Breeders' Cup, Breeders' Cup board of directors, breeders' cup election, Charles Nuckols III, Charlotte Weber, Don Robinson, Doug Cauthen, Helen Alexander, James McAlpine, Joseph Shields Jr., Leverett Miller, Lucy Young Hamilton, Maria Niarchos-Gouaze, Mark Taylor, Paulick Report, Ray Paulick, Ric Waldman, Robert Clay, Robert Cromartie, Terry Finley
Posted in Breeders' Cup, Industry | 2 Comments »
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