Posts Tagged ‘Thoroughbred Owners and Breeders Association’

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Bob Evans, president and chief executive officer of Churchill Downs Inc., said during a Friday morning press conference at the company’s flagship track in Louisville, Ky., that the CDI board of directors discussed the possibility of reducing the field size of the Kentucky Derby during a regularly scheduled meeting in New Orleans last week.

The Derby’s maximum field size of 20 is under scrutiny in the wake of the death of the filly Eight Belles in last year’s Derby, even though her fatal injuries occurred after the finish and apparently were unrelated to the number of runners or trouble she may have encountered in the race. The Derby traditionally has the largest field of any race in the United States. No Derby starter has fallen during the running of the race since 1970, when Holy Land clipped heels and fell going into the far turn.

By contrast, Breeders’ Cup fields are limited to 14 starters.

Maximum field size of 14 horses and the prohibition of fillies running against males were considerations in an original discussion document circulated by the National Thoroughbred Racing Association to industry leaders who formed what ultimately came to be known as the NTRA Safety and Integrity Alliance.

Field size or sex limitations were not part of the final recommendations of the NTRA Safety and Integrity Alliance Pledge, which can be viewed by clicking here.

Evans said CDI has devoted a great deal of time and resources to examine a wide range of safety issues since the death of Eight Belles and has adopted all of the safety recommendations made by committees formed earlier this year by the Jockey Club and Thoroughbred Owners and Breeders Association.

The CDI board discussed the reduction of the field size, Evans said, though he gave no indication whether a change will be made. “For now, it’s the way it’s always been,” he said. Nominations to the Triple Crown races, including the Derby, state that the size of the Derby can be “up to 20 horses.”

A reduction in field size might not be greeted favorably by horse owners and trainers who throughout the winter and spring closely follow whether their 3-year-olds are in the leading 20 contenders, based on money earned in graded or group stakes races. Churchill recently announced a marketing agreement with Kempton racecourse in England that will guarantee one spot in the Derby field to the winner of the Kentucky Derby Challenge Stakes, a 1 1/8-mile race on Polytrack, on March 18.

Handle on the Derby would also decline in the event of a reduction in the field size. Evans said Churchill has researched Derby handle in relationship to field size but would not say how much handle might fall. A reduction from 20 to 14 starters would also cost Churchill Downs $300,000 in lost entry and starting fees ($25,000 to enter and $25,000 to start).

Evans discussed the Derby field size and other safety measures following a media briefing announcing that Oaks and Derby ticket prices, with a few exceptions, would be frozen in 2009. “Our slowing economy is having a pronounced effect, and many of our customers have been affected in various ways as well,” Evans said. “Although the Kentucky Derby occupies an elite spot in the world of sports and tickets are typically in high demand, we want to keep our price points at the same level to help our customers in this challenging economic climate.” Click here to read more about the ticket price freeze.

The only exceptions will be scheduled price increases in the 30-year personal seat license program, which are coming off a three-year price freeze; some luxury suites and Marquee Village accommodations; and reserved seats in the infield.

Churchill Downs is also offering the opportunity for on-track customers to buy Derby reserved seats in a sweepstakes running each day from tomorrow (Saturday, Nov. 22) through Nov. 29. Individuals whose names are drawn will be eligible to buy two Derby tickets ranging in price from $88 to $207. (Derby tickets range in price from $88 for infield reserved seats to $693 on millionaire’s row.) One thousand of the tracks 55,000 seats are being offered in the sweepstakes. For more details, click here.

Copyright © 2008, The Paulick Report

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By Ray Paulick

THOROUGHBRED HORSEMEN’S ASSOCIATION: CEO Alan Foreman said the organization has not taken a position on the current legislation. “There will be a new Congress in January and we will visit the issue then,” Foreman said.

THOROUGHBRED OWNERS AND BREEDERS ASSOCIATION:  Position statement from TOBA president Dan Metzger: “We are categorically opposed to the slaughter of Thoroughbreds, and urge all those involved in the Thoroughbred industry to support rescue and adoption efforts and to work together to find humane means of dealing with the problems presented by Thoroughbreds no longer suitable for racing or breeding.” Metzger did not indicate whether or not TOBA has a position on H.B. 6598. TOBA is a member of the Unwanted Horse Coalition and is affiliated with Thoroughbred Charities of America, which supports numerous horse retirement and retraining operations.

THOROUGHBRED OWNERS OF CALIFORNIA: Did not reply to requests for a position statement. TOC’s Web site offers advice to a horse’s “last owner” and pushed for a first-of-its-kind charitable fund, the Calfornia Retirement Management Account  (CARMA), to solicit and distribute purse checkoffs for retirement and retraining programs. Transport for slaughter is illegal in California.

THOROUGHBRED RACING ASSOCIATIONS: Executive vice president Chris Scherf said the organization of North American racetracks has adopted no official position.

The Labor Day announcement that Stonerside Stables has been sold by Robert and Janice McNair to Dubai’s Sheikh Mohammed is troubling news – not over concerns that the sheikh’s Darley operation may become a dominating force in American racing and breeding but because of the symbolism of McNair’s departure from active participation in our sport.

With the exception of a few horses they are retaining, the McNairs sold the multi-state breeding, training and racing operation lock, stock and barrel for an undisclosed sum that surely approaches or exceeds $100 million.

The McNairs began development of the farm and racing stable in 1994, a mere 14 years ago. And now, just like that, they are getting out. Pfft!

Why?

The press release announcing the sale said Robert McNair found it increasingly difficult to devote enough time to Stonerside in light of his ownership of the National Football League’s Houston Texans, a franchise that McNair bid $700 million to buy and which played its first NFL game in 2002, five years after the Houston Oilers moved to Tennessee and were renamed the Titans. Despite going their first six seasons without a winning record, the Houston Texans were appraised by Forbes magazine as the fourth most valuable team in the NFL (behind the Dallas Cowboys, Washington Redskins and New England Patriots) with an estimated value of over $1 billion.

To get the Texans and return the NFL to Houston, McNair outbid entertainment mogul Michael Ovitz and billionaire oilman Marvin Davis, among others, who wanted to bring a franchise back to Los Angeles, which had lost the Rams to St. Louis and the Raiders to Oakland. McNair knew that the NFL was the sports world’s most valuable league, and understood the power that a strong league office, with the support of team owners, had in shared media rights, merchandising, sponsorships, and marketing. Stepping up with a bid of $700 million seemed like a big risk, but now it looks like a bargain.

While McNair was busy starting his NFL team, he also lent his support, time, personal resources and expertise to a project that the Thoroughbred Owners and Breeders Association was trying to launch: the Thoroughbred Championship Tour (TCT). The TCT was a property Thoroughbred owners would create through an investment of $25 million, hosting a series of races showcasing top horses in divisions tied to the Breeders’ Cup at tracks throughout the country. The TCT would control media and wagering rights for those races.

McNair was named chairman of the TCT, which after its public unveiling in 2003 was slow to get off the ground for a variety of reasons, including TOBA’s staffing inadequacies. TOBA board members and TCT officials went to the Breeders’ Cup and National Thoroughbred Racing Association (which at that time were effectively one organization) for support, but they were stonewalled by some of the same people who helped kill previous initiatives, including Fred Pope’s National Thoroughbred Association. Leading the charge against the TCT was G. Watts Humphrey, who along with Will Farish controlled the executive committee of the Breeders’ Cup until its governance was changed and its board elected by nominators.

The stonewalling worked. After a series of meetings among racing organizations that went on for years, TCT announced in 2005 that it was “suspending operations” – which might be a stretch. There never really were any operations…only discussions.

The opposition of Humphrey and other “old guard” Thoroughbred owners and breeders to the TCT and its “new guard” supporters had carryover effects beyond this attempt to create a series of races for the best horses in training. There were hard feelings by people like McNair who were trying to bring change to an industry that has long resisted it. Some in the new guard kept pushing for change through the Breeders’ Cup election and governance process, which still remains under the control of the old guard. Others have backed away from industry initiatives after getting a bad taste in their mouth from their experience with the TCT.

McNair is getting out of the horse business almost entirely, instead putting all of his considerable energy into the NFL, where there is more enlightened leadership and, as a result, heightened opportunities to grow a business.

This much we know: the NFL’s gain is the horse industry’s loss.

The past week was all about closed-door industry committee meetings in Saratoga Springs, N.Y., designed to save racing from itself.

Such is the nature of an industry that is run by a handful of self-appointed “leaders,” who then like to show off their might during a thunderous display of power at the annual Jockey Club Round Table on Sunday morning. Tut-tut. The Round Table, hosted by Jockey Club chairman Dinny Phipps, is preceded the night before by a sumptuous feast (called Dinny’s Din-Din by some) for Jockey Club members and selected guests at the National Museum of Racing, where dozens of aging white men are able to determine whether or not their tuxedos still fit them from a year earlier.

Speaking of the National Museum of Racing, the Paulick Report began its week pointing out some of the cracks in that aging, inertia-driven institution, such as a dismal financial record that had the charity watchdog Web site CharityNavigator.com give it zero stars on a four-star ranking system. But the Paulick Report also gives the museum a zero on creativity and less than a zero on transparency and candor.

Try this exercise: See if you can find out who the trustees of the National Museum of Racing are. Check the Web site: not there. Call  communications director Mike Kane and ask: when the Paulick Report did that a few months ago, we were told (on orders from the museum director) that those names could not be disclosed. Which begs the question: Why? What are the trustees of the National Museum of Racing afraid of, and why are they trying to hide from the public? Perhaps they don’t feel as though they should be accountable to anyone.

Accountability? That would be a new one for Dinny Phipps, the Jockey Club chairman and de facto strongman of the New York Racing Association. It’s been more than 25 years since Phipps carried the official title of chairman of the board of trustees of the NYRA, but he’s still numero uno in clubhouse box assignments at Saratoga and Belmont Park, and that says a lot. So do his behind the scenes power plays on behalf of NYRA and the Jockey Club, which continue to be incestuously intertwined.

Phipps hasn’t been satisfied just being the boss of New York racing. According to Fred Pope, the Lexington, Ky., advertising executive who created the National Thoroughbred Association, Phipps managed to put the dagger into that effort to give racing “major league” status and instead transformed it into a trade association that neutralized the power that Thoroughbred owners were attempting to seize NTA through the (just as team owners in the NFL, NBA, MLB, or golfers in the PGA Tour have done).

But it’s all about control for Phipps and his Jockey Club vice chairman William S. Farish. Whether it’s Jockey Club president Alan Marzelli bullying NTRA executives on when to hold meetings and who to invite, or surrogates for Phipps and Farish populating industry boards and leadership positions, they want to make certain nothing moves forward without their stamp of approval. Their sphere of control includes such institutions as the Breeders’ Cup, Keeneland, the National Thoroughbred Racing Association, Thoroughbred Owners and Breeders Association and its American Graded Stakes Committee, Bloodhorse magazine, and, of course, the New York Racing Association, among other groups.

There is growing awareness among industry stakeholders that this control may be contributing to the decline of the sport. Efforts have been made to derail the mighty Jockey Club and bring new leaders and fresh ideas to the forefront, but those efforts have been turned back…for now.

Will those who want change continue to fight, or will they fall like others before them to the mighty clutches of power that a handful of people wield  in the Thoroughred racing and breeding industry? 

That’s a question the Paulick Report cannot answer.

Copyright © 2008, The Paulick Report

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What you won’t hear in the report is how the tentacles of the Jockey Club and some of its individual members strategically reach into various organizations and businesses in an effort to exert control throughout the Thoroughbred industry.

To quote from the book, “The Right Blood: America’s Aristocrats in Thoroughbred Racing,” by Carole Case: “This is a story about money and power, and about a particular group of rich and powerful Americans—the men (and a very few women) of the Jockey Club. With its founding in New York City at the turn of the twentieth century, the Club took the reins of Thoroughbred racing in the United States, and it has never entirely let them go. For more than a century, then, the Jockey Club has dominated horseracing in this country.”

For better or worse, the Jockey Club, which has been ruled since 1982 by chairman Dinny Phipps and vice chairman William S. Farish, has considerable power over the Breeders’ Cup, Keeneland, National Thoroughbred Racing Association, the Thoroughbred Owners and Breeders Association and its American Graded Stakes Committee, Bloodhorse magazine, and the New York Racing Association, among others.

Here’s a quick rundown.

– William Farish’s son, Bill, is the board chairman of the Breeders’ Cup, which before its governance was changed a few years ago, had been tightly controlled by the senior Farish and his longtime friend and horse business partner G. Watts Humphrey. The battle over control of the Breeders’ Cup board has been detailed by previous articles in the Paulick Report..

– The senior Farish replaced Ted Bassett in 2006 as one of the three trustees who oversees Keeneland’s operations. Keeeland’s president, Nick Nicholson, is a former executive with the Jockey Club. There is some speculation that one of the senior Farish’s goals is to expand Keeneland to the point where it can bid to become a permanent host for the Breeders’ Cup, making it the Augusta National of the racing industry.. An expansion is on the drawing board now, with Keeneland making a possible Breeders’ Cup bid as early as 2011.

– The NTRA board is populated by several Jockey Club members, including Humphrey and Robert Clay, plus Jockey Club president Marzelli, and three racetrack executives — Nicholson of Keeneland, Bob Elliston of Turfway Park (owned in part by Keeneland), and Charles Hayward of the New York Racing Association, which has been controlled by Phipps for more than 30 years. At one point, the NTRA and Jockey Club shared office space in New York.

– The Thoroughbred Owners and Breeders Association has had some semblance of independence from the Jockey Club in recent years, through its chairman, Bill Casner, who is not a Jockey Club member but has been asked to speak at Sunday’s Round Table. Casner was recently succeeded by Reynolds Bell, currently a steward of the Jockey Club and a bloodstock agent whose major client is Farish’s Lane’s End Farm. Dell Hancock, whose family’s Claiborne Farm boards the Phipps family mares, served as chair of the American Graded Stakes Committee until recently being succeeded by Peter Willmot. Steve Duncker, currently the board chairman of NYRA, was a previous Graded Stakes Commiteee chair.

– Stuart Janney is chairman of Bloodhorse magazine, whose board also includes Bill Farish, G. Watts Humphrey, D.G. Van Clief, and Antony Beck—all Jockey Club members with the exception of Beck, who is very close friends with Bill Farish. Janney is a Jockey Club steward, a cousin of Dinny Phipps, and chairman of Bessemer Trust, the company founded by Phipps’ great-grandfather. He succeeded Humphrey as chairman, who in turn succeeded Bayard Sharp, Farish’s late father-in-law.

– The New York Racing Association’s close relationship with the Jockey Club is no secret. Its tracks serve as playgrounds for many Jockey Club members, most notably Dinny Phipps, who has the most desired finish line boxes at the NYRA tracks. The Jockey Club even has offices at the New York tracks. The Jockey Club once officially ruled New York racing, but lost its official control when a horseman named Jule Fink went to court after being denied an owner’s license. NYRA’s board is populated with Jockey Club members, and its chairman, Steve Duncker, like most chairman before him, is a member of the Club as well.

The tentacles clearly reach into breed associations, regulatory agencies and other organizations throughout racing and breeding.

What isn’t clear is why the Jockey Club, led by its chairman and vice chairman, wants so desperately to control the industry, and what they plan to do with that control.

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Fred Pope just won’t give up.

For more than 16 years, since he first used advertising space in Bloodhorse magazine to publish an article entitled “Whose Game Is it?” Pope has been trying to convince Thoroughbred owners that they can control their own destiny in racing.

Pope is a Lexington, Ky., advertising agent who for many years was closely associated with Gainesway Farm and its founding owner, John Gaines. Both men loved the power of ideas and both wanted to see Thoroughbred racing grow out of a parochial, tradition-steeped existence that encouraged inertia over creativity. Gaines started the Breeders’ Cup, which he had hoped would become a vehicle to market the sport to a wide audience that currently does not participate in racing. He went to his grave disappointed that his big dream was not fulfilled, even though the Breeders’ Cup has been widely hailed as racing’s best innovation of the 20^th century.
 
Pope saw the power of the event, which at the very least gave racing the championship day it never had. The Breeders’ Cup has evolved from a one-day on-track experience with a relatively large television viewing audience to a two-day event in which racing fans throughout the country can participate through simulcast betting at their local track, OTB or via account wagering. The television audience has plunged in numbers over the 25-year history of the Breeders’ Cup, even as handle has grown substantially.

The bottom line is that the Breeders’ Cup may capture the attention of most racing fans for a weekend, but it isn’t creating very many new enthusiasts for the sport.

Pope believed racing needed more than just one big weekend in the fall to help the sport grow, so he began trying to find ways to define a “major leagues” for racing. He kept going back to the fact that the racehorse owners, the people who own the “talent,” should be in control of the game. “Control” means licensing, scheduling of major races, marketing regulations, contractual agreements over distribution and revenue. It’s the kind of control defined by the most successful major league sports, including the National Football League (controlled by the team owners) or the PGA Tour (controlled by the players).

After studying various sports and how the team owners or players exert control, Pope formed the National Thoroughbred Association, which would create a major league for horse racing by, among other things, reversing what he called the upside-down revenue model currently in place for simulcasting, which now accounts for nearly 90% of wagering. The upside-down model, in brief, pays five times more to the business handling a wager (the simulcast outlet or account wagering company where a bet is made) than it pays to the track and horsemen who puts on the race on which the wager is made.

One of the first people Pope convinced that his idea would work was John Gaines, who along with Pope started convincing some of the most powerful owners in the business to get on-board. Eventually more than 100 owners signed up, each contributing $50,000 to the NTA as seed money, and the NTA was off and running in the summer of 1996. A board of directors was formed and Robert Clay was elected president of the NTA.

In early 1997, as the NTA’s plans continued to be formulated, Jockey Club chairman Dinny Phipps got involved and called Clay and a few others to a private meeting in Palm Beach, Fla. Neither Phipps nor William S Farish, the Jockey Club’s vice chairman, supported the NTA. Farish was also the chairman of the board of publicly traded Churchill Downs and a major consignor of yearlings at Keeneland. The latter role led Farish to have ambivalent feelings about the NTA, he told Gaines privately, because “I have to sell yearlings” to many of the people who had signed up in support of the NTA or who sat on its board of directors.

Clay was almost breathless in his enthusiasm for the “all hands together” approach that Phipps proposed during the Palm Beach meeting, that called for the Jockey Club, Breeders’ Cup and Keeneland to get involved. Other groups eventually were also brought in, including racetracks, and what had been an owner-driven initiative was now, for lack of a better term, a fustercluck of industry organizations which, by their nature, could never paddle in the same direction.

As Pope said during a talk he gave to a group of equine attorneys last year, “The NTRA looked like the NTA, sounded like the NTA, and promoted itself with the terms such as ‘Commissioner’ and ‘league office’ but without the basic elements of a Major League. It was a fake major league.

“The NTRA could not package, price, or distribute the sport. It did not have the rights from the racehorse owners, it did not have rights from the racetracks, nor did it seek to change simulcast pricing. Instead of the proven Major League sports structure, the NTRA tried to include not just all of Thoroughbred racing, but also included all of the Thoroughbred industry, as well as other horse breeds and dog racing industries.

“Instead of a real Major League structure, the NTRA presented a fantasy structure selling the premise that if everyone would close their eyes, join hands and sing Koombaya, then Thoroughbred racing would be restored The political operators had everyone drinking the NTRA Kool-aid.

“If Mr. Phipps thought stopping the major league NTA, to start another trade association, then in my opinion he is incompetent. If he did it only to stop the NTA, then he and people who helped him are guilty of something more sinister and owe the industry an apology. Although Mr. Phipps is the acknowledged head of the industry, I have never read about his vision for Thoroughbred racing. Every time someone else has put forward an idea, he has moved to stop it. To the point now, no one has offered anything new in the last ten years.”

Pope made those comments in May 2007. Since then, the industry’s prognosis has gone from bad to worse. This year alone we’ve we had the death of Eight Belles at the Kentucky Derby, the admission by trainer Rick Dutrow that Kentucky Derby winner Big Brown raced on anabolic steroids, medication positives for the trainers of the Horse of the Year, the Kentucky Derby winner and the Kentucky Oaks winner, the possible implosion of Magna Entertainment (the largest racetrack owner in the country), ongoing disputes over simulcasting and account wagering, and Congressional hearings that made the industry’s leaders look incompetent.

I think we are right next to a calamity,” Pope told the Paulick Report.

For that reason, he’s not giving up on the same basic premise that started in 1992 with the question “Whose Game Is It?”

Last month, Pope published an op-ed piece in the Thoroughbred Daily News discussing racing’s upside-down distribution model and the need for owners to get involved. That article got a lot of horse owners talking about the need for change.

I’m afraid we are seeing the total collapse of the economic model that’s in place right now,” Pope told the Paulick Report. “The objective of the NTA was to change from a simulcast buyer’s market to a seller’s market. It’s finally coming to fruition in some very bad ways, and it’s only a matter of how much damage has been done.

In the Aug. 16 issue of Bloodhorse magazine, Pope has repeated that message and has called for Congress to change one word in the Interstate Horseracing Act that will empower owners across the nation.

We have a long list of national organizations, but not a national racehorse owners association,” Pope wrote in a magazine that, coincidentally, is owned by the national Thoroughbred Owners and Breeders Association. Several organizations say they speak for racehorse owners; however, they are actually controlled by breeders, tracks, or trainers. It seems everyone wants to speak for racehorse owners, except racehorse owners.

Currently, the Interstate Horseracing Act gives simulcast approval to what it calls “horsemen,” which has been defined as owners and trainers. Pope wants the word “horsemen” to be changed to “racehorse owners,” mandating that the owners step and get involved in key decisions relating to simulcasting contracts.

One problem is that horse owners, to paraphrase what Robert Clay said many years ago, didn’t join the country club to cut the grass. They joined so they could play golf

Jess Jackson is one owner who believes in Pope’s idea, and that can be viewed as a blessing or as a curse. Jackson is a powerful individual whose written testimony before the Congressional hearing in June included a lengthy article written by Pope. He has access to members of Congress that many others might not have. He is respected and appreciated by some in the industry for what he has done in the area of auction reform, but there are others who may automatically get on the other side of the fence from Jackson on any given issue because they don’t like his tactics.

That shouldn’t be the case. This issue is too important. Racing is in far worse shape than it was in 1996 when Pope and more than 100 owners stepped up to make a difference, only to be shot down by Dinny Phipps and his sycophantic followers.

The idea then was to grow the business by having owners take control of the sport and create a new business model for simulcast distribution. The reality today is that the various parties are fighting over scraps. The focus needs to return to growth, and there is only way for that to occur.

Racehorse owners must support change to the status quo.

Copyright © 2008, The Paulick Report

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