Posts Tagged ‘TOBA’

TOO MANY CHEFS FOR RACING’S ‘ALPHABET SOUP’

Wednesday, February 24th, 2010

By Ray Paulick
A Paulick Report reader commenting under the pseudonym of “another young owner” made the following observation in connection with yesterday’s article that surveyed top executive salaries at 18 industry non-profit associations: “Over $3.75 million a year and our industry has never been worse off… we have some great leaders!”

Actually, the aggregate of the 18 salaries was $3,911,096 and didn’t include bonuses, retirement plan contributions or other benefits.

But the point made by “another young owner” was not lost on me. When you consider that executive salary should only be a small fraction of an organization’s expenditures and that there are many more associations and businesses not included in our survey, it makes you wonder: What exactly are we getting for all that money?

Do we really benefit from and need a TRA and an NTRA, a TOBA, an HBPA and a THA, a TOC and a CTT, a Jockey Club and a Jockeys’ Guild? For the ultimate absurdity consider that we used to have two national organizations for racing regulatory bodies—neither of which really had the authority to do anything.

Perhaps when racing was healthy—a regional or local sport that didn’t participate in interstate commerce–there was little need to consolidate some of these redundant organizations. But today, as revenues are in serious decline among racetracks, horse owners, breeders and in virtually every other industry sector, the status quo will not work.

But don’t take it from me. Owner and breeder Satish Sanan, a no-nonsense businessman who has closely examined racing’s organizationally littered landscape, believes the industry will continue in a downward spiral unless it commits to changing its structure.

Sanan, a weekly guest on Steve Byk’s satellite radio show, “At the Races,” has been speaking out in his regular “Our Industry” segment about the need for a new structure. (Click here to listen.) Yesterday, in reaction to the Paulick Report’s salary survey, Sanan said: “If you look at the so-called alphabet soup organizations from TOBA to NTRA to horsemen’s associations, the THA, and the (Thoroughbred) Owners of California, you can add all that crap up, and collectively we are spending millions of dollars. Each one is doing one or two good functions, but not seriously impacting the growth of the industry. It goes back to, do we need this kind of structure and what the hell is it doing for our industry? We need a single structure and in that structure we have got to find a way to generate more revenue, put more money back into the business, hire the best talent.

“When the NFL and NBA created leagues, they brought people in, paid them millions of dollars, and put governance and structure in place and marketed the hell out of their sport and nobody complains about that because they bring in hundreds and hundreds of millions of dollars. Unfortunately, there is not an organization with the exception of maybe individual racetracks that are customer focused, customer centric, customer-service centric.”

Sanan said Breeders’ Cup–where he is on the board of directors and has led a strategic planning committee that is set to announce its final recommendations at a board meeting on Thursday—is the only association on the horsemen’s side of the industry that has focused on revenue growth. “I do not know of another organization that is tasked with growing the business,” he told Byk.

“The leadership of our industry should be thinking like a think tank and working together, talking about how do we transform this business, how do we go back to how this business used to be, how do we attract new owners, keep the existing owners, keep the existing horseplayers, have them bet more and make it more attractive to them and market the sport so we can attract new ones. I’m at a loss as to whose job it is and who thinks about these things on a daily, weekly, monthly basis. Can you name somebody? I (expletive deleted) can’t.”

Byk couldn’t either.

“We have got to streamline our industry,” Sanan continued. “There should be one horsemen’s organization, not 15. Period. There should be one panel that focuses on nothing but all the issues that are integrity-related: safety, medication, tote and wagering, and build confidence so we can attract new people. We need the best of minds with the most creative and innovative marketing programs to attract new horseplayers, new fans and market the hell out of the sport. Shoot, if this was my company I would be doing it.”

And that begs another question: Whose company is it? Who will take the lead here? Which organization will dissolve or be willing to merge with someone else. Which alphabet soup executive will focus more time on doing what’s right for the greater good of the industry instead of fighting to maintain whatever small chunk of turf he controls? Many of these executives are bright people, but the absence of a common-sense structure and industry-wide collaboration is a lethal combination.

There are too many chefs cooking our alphabet soup, and no one is buying it.

Copyright © 2010, The Paulick Report

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AMERICAN GRADED STAKES STANDINGS brought to you by Keeneland: INDUSTRY REGULATION AT ITS WORST

Thursday, December 10th, 2009



By Ray Paulick

In an unprecedented move, the Thoroughbred Owners and Breeders Association’s American Graded Stakes Committee has taken “graded” status away from three races in Pennsylvania that had already been run in 2009 because the Pennsylvania State Horse Racing Commission failed to follow drug testing protocol required by the TOBA committee. The races in question are the former Grade 2 Pennsylvania Derby and Fitz Dixon Cotillion Stakes at Philadelphia Park and the former Grade 3 Masters Stakes at Presque Isle Downs.

To repeat, these races were advertised and run as American Graded Stakes, and the various trade publications and Thoroughbred industry data bases reported them as being graded after they were run. It was not until the American Graded Stakes Committee met recently that the races were stripped of their graded status.

At first blush, the decision doesn’t seem fair, especially to the owners and breeders of the horses who either won or placed in those stakes. Why should they be punished for something (drug testing protocol) that was completely out of their control?

But, frankly, I like the fact TOBA is flexing whatever muscle it has to strengthen the integrity of the game, to tighten drug and safety rules and create some level of national standards for the best and most important races run in the United States. The committee members should be congratulated for setting these standards (click here to read the American Graded Stakes Committee’s protocol), and, for the first time, showing their commitment to integrity by enforcing them.

Andy Schweigardt, who administers the AGS program for TOBA, said committee members were “disappointed” they had to take such a dramatic step, one that could have had significant economic implications on the horses losing the important status that comes with an American Graded Stakes victory. In this instance, all three winners either previously or subsequently won a graded race of the same or equal standing, so it did not impact them. According to an article at bloodhorse.com, however, three of the horses that placed in the Pennsylvania races lost their standing as “graded stakes placed” or slipped from grade 2-placed to grade 3-placed. So there are some potential economic damages.

Schweigardt said the committee engaged legal counsel prior to the decision to revoke the race grades. In other words, TOBA feels safe in the event of litigation by anyone who might feel they were harmed by the decision. I’m not sure the Pennsylvania State Horse Racing Commission should have the same comfort level.

What the Pennsylvania State Horse Racing Commission failed to do is conduct testing for alkalizing agents, commonly known as milkshakes, something that is part of the American Graded Stakes drug-testing protocol.

All racing commissions in states that offer American Graded Stakes are notified of the protocol in advance by Schweigardt, who then follows up in the autumn of the year the races are run by requesting a letter from each racing commission stating their compliance with the protocol. “We hadn’t received (the letter of compliance) from Pennsylvania as of the mid-November deadline,” said Schweigardt. “We got ahold of someone just before Thanksgiving, and he said at the time he couldn’t send the letter because they hadn’t done the testing for alkalizing agents.”

“One of the reasons given was budget constraints,” Schweigardt added, “but the others were philosophical in that they disagreed with us, saying their scientific counsel told them the use of alkalizing agents in Thoroughbreds doesn’t have any affect on performance, therefore it would be a waste of money.” Schweigardt said Dr. Lawrence Soma was the source of the scientific advice to the Pennsylvania State Horse Racing Commission. Pennsylvania does test for “milkshakes” in Standardbreds.

Pennsylvania State Horse Racing Commission chair Dr. Corinne Sweeney did not return a phone call from the Paulick Report to discuss the issue and Joe Mushalka, director operations for the commission, said he could not talk about it though said a press release would be released in the next few days.

“TOBA’s decision (to require testing for alkalizing agents) was based on the fact it was important, as seen in California and other states,  and by a desire of the Racing Medication and Testing Consortium to put together a model rule on how to go about properly testing and regulating this practice,” Schweigardt said. “And, quite frankly, there was concern from racing fans that this was in their perception a significant performance enhancer in horses.”

The position taken by the Pennsylvania Horse Racing Commission is ignorant and arrogant and demonstrates some of the ongoing challenges in the scientific community on which the horse industry depends on drug testing and medication issues. Some people and institutions simply think they are smarter or more informed than others, even when their positions fly in the face of industry consensus. The Pennsylvania State Horse Racing Commission comes out looking like fools in this case and owes an apology to the owners and breeders of the horses that competed in the three races that had their graded stakes status revoked, and to the fans whose confidence in this sport is wavering because of medication and drug testing issues.

This was industry regulation at its worst.

* The American Graded Stakes Standings only includes races in the United States. Additionally, sales stats are only included for horses that were sold.

Copyright © 2009, The Paulick Report

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CULLEN RESPONDS TO ACCUSATIONS OF WRONGDOING

Friday, November 27th, 2009

By Ray Paulick
I took no glee in writing about bloodstock agent Jim Cullen’s legal and financial problems earlier this week. The trail of lawsuits, unpaid financial obligations and charges of alleged wrongdoing from some of his former clients and associates do not paint a pretty picture to outsiders interested in investing in the Thoroughbred industry.

For his part, Cullen has responded to my article at the website he maintains for his company, Cullen Bloodstock. Click here to read his response. Feel free to comment below on whether you feel he was wronged by the Paulick Report expose, or in subsequent, similar articles at bloodhorse.com and drf.com.

We have a shortage of Thoroughbred owners, and in some ways the industry has itself to blame. Organizations have failed to adequately look out for and protect the best interests of many newcomers to racing who, quite frankly, have been fleeced and unfortunately participate in what has historically been a three-step program: 1) get in; 2) get screwed; 3) get out.

There has been some progress. The Thoroughbred Owners and Breeders Association’s Sales Integrity Task Force has been formed, and it took some very modest steps to protect horse owners from unscrupulous agents, including a long-overdue Code of Conduct for participants. It’s better than what was in place before—nothing.

But let’s be honest. Much, much more can and should be done to inspire confidence in people who enter the Thoroughbred industry with the expectation of getting a fair shake. The decision by Keeneland to sanction Cullen—banning him from auction participation until 2011 at the earliest—was the first time the Sales Integrity Task Force’s Code of Conduct has been openly cited for enforcement since its adoption in 2007. I would suggest its enforcement has been less than aggressively pursued by some auction companies.

There has been no small amount of throat-clearing and back-patting about how well “the system worked” in bringing about the Code of Conduct-cited sanctions against Cullen. In this instance, the “system” did very little. If not for the tireless efforts of the individuals who felt they were wronged by Cullen, I doubt any action would have been taken.

By the way, the charges are just that—allegations—and Cullen deserves his day in court to respond to any of the lawsuits or accusations against him. For his part, he calls the conduct of his former clients “harassment” and said they have made “slanderous” and “defamatory” statements about him. Cullen said he has filed “charges” against them with the Lexington (Ky.) police for “harassing communications.” The Paulick Report checked with both the Lexington Police Department and Fayette County court system to see if such charges were filed, but was unable to confirm that any charges have indeed been filed as Cullen indicated.

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KEEP: WILLIAMS’ ATTACKS CEMENT INDUSTRY UNITY

Wednesday, September 30th, 2009

KEEP just released an editorial in response to KY State Senator David Williams’ criticism of the Thoroughbred industry’s desire for alternative gaming in Kentucky. Are you moved by this editorial? Where do you stand on the slots issue and have any of the recent editorials changed your mind one way or the other? The Paulick Report wants to know. - Bradford Cummings


In a recent response to an editorial by Bill Farish entitled, “Gambling, Not a Partisan Issue,” Sen. David Williams continued to attack Kentucky’s horse industry in a misguided attempt to divide and conquer horsemen.
 
What Sen. Williams doesn’t understand is that his attacks only further cement the unity among our industry to seek alternative gaming at racetracks. The horse industry is more united today than at any time in our history because we understand the enormity of the threat posed to our competitiveness. We live it every day as we watch our racing dates eliminated, our purse money decline and owners and trainers ship horses to states where purses and breeder incentives are enriched by gaming revenue.  
 
Sen. Williams began his editorial by saying expanded gaming is “bad economic policy for the state and for the horse industry.”  I firmly disagree. Isn’t it bad economic policy for the state to stand by while its signature horse industry declines because we lack the competitive tools other states are using to capture what Kentucky already has? Kentucky has a horse industry that is world-renowned for its product. It generates a $4 billion economic impact. It supports 100,000 jobs statewide. But in the end, Kentucky’s bond with the horse cannot be measured by mere economics. It is that intangible that makes Kentucky unique.  
 
Let’s take Sen. Williams’ points one by one.
 
Sen. Williams says, “expanded gambling will flood Kentucky with funds that will skew our body politic.”
In his response, Sen. Williams calls into question the Farish family’s affiliations and makes mention of political corruption in other states where gaming is allowed. This personal attack on the Farish family is an all-time low point in the gaming debate and will not go unanswered.
 
The Farish family has a long history of public service and staunch support of the Republican Party.  William S. Farish served as United States Ambassador to the Court of St. James under President George W. Bush. His son, Bill, served as a personal aide to President George H.W. Bush. Both father and son are lifelong horsemen who are actively involved in all aspects of Thoroughbred racing and breeding. From their development of Lane’s End Farm into one of the world’s premier breeding operations, to their service with the American Horse Council, the Breeders’ Cup, The Jockey Club, the Kentucky Thoroughbred Association, the National Thoroughbred Racing Association and Thoroughbred Owners & Breeders, their commitment to the horse industry cannot be questioned.  
 
Sen. Williams says that once slots arrive, horse owners and trainers will get the short end of the stick.
If alternative gaming is not growing purse money at racetracks in those states where it is allowed, then why are Kentucky horsemen shipping to Pennsylvania, Indiana, West Virginia and Louisiana, among others?  
 
Total purses in Kentucky have been stagnant or have declined since 2001. In contrast, Thoroughbred and Standardbred purses in Pennsylvania jumped nearly 40 percent from 2007 to 2008, the first full year of gaming operations. Indiana’s Hoosier Park just announced its second purse increase of the current meet. Louisiana racetracks such as Evangeline Downs and Fair Grounds are enjoying resurgence. Gaming revenues are up 5.5 percent at Florida’s Gulfstream Park compared to 2008; while Calder Race Course will open its gaming operation in 2010.
 
The horse industry’s plan to authorize video lottery terminals (VLTs) at Kentucky racetracks was the most comprehensive show of support for the entire horse industry—both racing and non-racing breeds—ever to be introduced in the United States. Though purse supplements for Standardbreds, Quarter Horses and Thoroughbreds are the most visible allocation, revenue would be broadly distributed to enhance many Kentucky equine breeds and related programs.
 
Gaming funds would expand the Kentucky Breeders’ Incentive Program (KBIF), which offers economic incentives to encourage ownership of all Kentucky-bred horses, even non-racing breeds. As an example, since it’s inception in 2005 the KBIF has fueled dramatic growth in Kentucky’s Quarter Horse industry, attracting 600 new Quarter Horse stallions, more than 2,000 mares and an influx of new Quarter Horse farms.
 
Our proposal also dedicates revenue to promote the health and welfare of horses by funding new equine facilities and riding trails; it will enable improvements to the backside and stable areas at racetracks; properly fund the Kentucky Horse Racing Commission and repeal a sales tax on feed and equipment for horses—an exemption already bestowed on other Kentucky livestock.
 
Though he would like to convince you otherwise, Sen. Williams’ plan is not a “horse industry” proposal. Under it, he addresses only purse money; contributing nothing to the KBIF or non-racing breeds. His proposal would redirect to the horse industry $19 million in existing tax revenues that currently go to the General Fund, which is already suffering a shortfall. He would place a 10-cent tax on lottery tickets, so your $1 lottery ticket would cost $1.10. The Kentucky Lottery Commission estimates this tax would result in significant lost lottery sales, which would adversely affect our children since all the funds go to funding the Kentucky Educational Excellence Scholarship (KEES) program.
 
Sen. Williams says slots will not “save” Kentucky’s budget.
Kentucky’s horse industry has never made the claim that expanded gaming would be the silver bullet to Kentucky’s budget shortfall. However, what our proposal would do is generate at least $700 million in new revenue, including more than $200 million in new tax dollars for the state, and be a source of new jobs and new capital construction.
 
Sen. Williams says the horse industry is beset with problems endemic to the industry itself.
The horse industry competes with an explosion of casino gaming nationwide. Today, 36 states in the continental United States permit commercial, Indian and/or racetrack casinos.
 
Kentucky racing is battered by casino gaming forces on two fronts. First, we directly compete with six Indiana riverboats on our border, where $1.44 billion was wagered in 2008. Casinos also line Kentucky’s border with Illinois, Missouri and soon Ohio. These casinos, which include the nation’s largest riverboat, the Hollywood Casino near Lawrenceburg, are situated to take advantage of Kentucky’s major population centers.
 
Even more damaging to our competitiveness, each of the 12 racing states nearest to Kentucky—Arkansas, Illinois, Indiana, West Virginia, Louisiana, Florida, Maryland, Delaware, Pennsylvania, New Jersey, New York and Ohio—are using expanded gaming to strengthen their horse industries.  
 
We don’t view alternative gaming as a long-term fix for Kentucky’s horse industry. Instead it will provide us with a short-term infusion of revenue we can use to spark economic development in our industry. These funds will help us compete, in the immediate future, by allowing us to raise purses and preserve Kentucky’s year-round racing circuit, renovate infrastructure, explore new marketing ventures and employ new technologies in an effort to attract new fans.
 
Alternative gaming at Kentucky’s racetracks will not change the behavior of Kentuckians. They already spend more than $670 million at riverboat casinos in Illinois and Indiana alone.
 
Sen. Williams, however, continues to stir the pot by stating that Kentuckians will have to “gamble” $11 billion to produce the $1 billion net win the horse industry proposal projects. As Sen. Williams knows, this is absolutely not true. He conveniently misuses this figure to confuse and concern. In reality, “churn”—whereby players repeatedly use their winnings to continue play—will account for most of that $11 billion gross wager. We are not asking any Kentuckian to gamble a single dollar that they are not already gambling. We are, however, asking that if they choose to gamble, they do it in Kentucky to help our own people. We don’t want a government subsidy!  What we want is a level playing field. If we get this we will out-work and out-produce our competition and remain the “Horse Capital of the World”!

 

AMERICAN GRADED STAKES STANDINGS brought to you by Keeneland

Thursday, July 30th, 2009

 


By Ray Pauick

Every sport, whether it’s baseball, basketball, football, golf, hockey or tennis, keeps track of its major league records. Baseball doesn’t mix statistics of Triple A players with those in the American or National League, just as the NFL doesn’t compare its players’ individual performances and records with those in Arena Football. The PGA Tour and Champions Tour keep separate records.

Why should horse racing be any different?

Since 1973, horse racing in the United States has had a clearly defined “major league” of races designated as Grade 1, Grade 2 and Grade 3 among the tens of thousands of races run throughout the country. These races (there are 489 of them this year) are the “best of the best,” restricted only by age or sex, not by state where bred or other conditions that apply to many maiden, allowance, claiming or even stakes races. Yet the overwhelming majority of statistics presented day in and day out mix the best races with the worst in sire, owner, trainer breeder and jockey standings. 

The  American Graded Stakes program (formerly North American Graded Stakes, until the Jockey Club of Canada opted to grade its own races) is overseen by a committee of the Thoroughbred Owners and Breeders Association, which uses specific criteria to evaluate the relative quality of open, unrestricted stakes races. The American Graded Stakes Committee consists of owners, breeders, and racing officials from around the country; the committee meets after the Breeders’ Cup each year to evaluate and grade the races for the following year.

The Paulick Report believes American Graded Stakes are one of the most underutilized assets of our sport and can be the foundation for a national program that could lead to the development of a “major league” for horse racing. But that’s a discussion for another day and food for thought for some of racing’s various organizations to ponder.

Our role in compiling information on the winners of these races and publishing American Graded Stakes Standings, which is brought to you by Keeneland, is to highlight which stallion sired the most graded stakes winners of the current year, which trainer or owner won the most, which breeder bred the most, which consignor sold the most, and which sale company auctioned off the highest number of winners of America’s best races.

Racing and breeding is a statistical endeavor, and we think the most important statistics involve the winners of the best races. Those races are the American Graded Stakes.

Over the coming weeks, the Paulick Report will examine each of the categories in more detail, looking at who owns, breeds, trains, consigns, buys and sells the most winners of American Graded Stakes. We’ll try to identify value and pick up on trends that can help industry participants better understand where the next Graded Stakes winner may come from. 

For example, so far in 2009, the median price of a yearling that went on to win a graded race in 2009 was $63,665; 2-year-old median for 2009 graded stakes winners is $180,000; and weanling median price for a 2009 graded stakes winner is $55,000. The lowest-priced yearling that won a graded stakes was the $1,000 Autism Awareness, the lowest-priced weanling was the $25,000 Our Edge, and the lowest-priced 2-year-old was the $10,000 Secret Gypsy.

The accompanying lists are for American Graded Stakes through July 26. We’ll update the lists each week so the industry, for the first time, has an up-to-date leaders lists of these important races. In our analysis, we’ll add some context to the raw numbers. And as with anything we publish, we’ll open the comment section to our readers in hopes that you’ll have some suggestions to make these lists even more meaningful and useful.

DELAWARE SWITCHES ON TOE GRABS: DO THEY KEEP HORSES FROM STUMBLING?

Tuesday, July 14th, 2009
By Ray Paulick
Citing an unusual number of horses that stumbled at the start of their races, the Delaware Thoroughbred Racing Commission recently approved an emergency regulation regarding toe grabs on front shoes, increasing the maximum allowed in dirt races from two to four millimeters. The adoption of rules earlier this year (by the Delaware commission and most other racing commissions or by racetracks in the form of house rules) barring front toe grabs that exceed two millimeters was in line with model rules of the Association of Racing Commissioners International, eligibility guidelines for graded stakes from the Thoroughbred Owners and Breeders Association’s American Graded Stakes Committee, the National Thoroughbred Racing Association’s Safety and Integrity Alliance Code of Standards, and the recommendations of the Jockey Club Safety Committee on Shoes and Hoof Care.

Delaware Park received a safety accreditation in June from the NTRA Safety and Integrity Alliance. It’s not known how the Delaware Racing Commission rule change affects that status.

The policy change, adopted June 23 and effective the following day, may not affect graded stakes at Delaware Park. According to John Wayne, the racing commission’s executive director, the policy change will not apply to American Graded Stakes. The Thoroughbred Owners and Breeders Association, which oversees the American Graded Stakes program, set two new conditions for races to receive a grade in 2009: a ban on anabolic steroids and on front toe grabs exceeding two millimeters.

The regulations were based on studies tying increased incidence of catastrophic breakdowns and injuries to toe grabs. WinStar Farm co-owner Bill Casner, former chairman of the Thoroughbred Owners and Breeders Association, presented some of those statistics during a talk at the 2008 Jockey Club Round Table in Saratoga Springs, N.Y. , in which he said horses and jockeys may be at higher risk when front toe grabs were worn. 

However, the Delaware commission reversed the regulation for the same reason. “The commission felt that the present regulations were putting jockeys in unnecessary danger,” said Wayne, who added that both the Delaware Jockeys Association and Jockeys’ Guild supported the change from two millimeters to four.

Immediately after the regulations on toe grabs went into effect in April, stewards at Delaware Park noticed an increase in the number of horses stumbling coming out of the starting gate and began to track the statistics at Wayne’s request. “They noticed two, three or four horses a day were stumbling, and riders were coming off horses." Wayne also said track maintenance crews and the starting gate crew tried different things to alleviate the increase in stumbles at the start, to no avail.

"Since we made the change (to four millimeters) last month," Wayne said, "the number of horses stumbling has fallen off the charts.” (Click here to see their report.)

The commission notified both the NTRA and Jockey Club of the change. TOBA officials contacted the commission on Monday seeking clarification.

“We didn’t make this decision hastily,” Wayne added.

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PAULICK REPORT CELEBRATES FIRST ANNIVERSARY

Tuesday, June 16th, 2009

By Ray Paulick
There have been very few dull moments since the Paulick Report was launched one year ago today, June 16, 2008. I guess that’s one of the benefits for a journalist covering an industry in turmoil.

Where to begin? We’ve posted 418 of our own stories, most of them written by me, and have linked to thousands of others published in daily newspapers and trade publications – both of which are going through their own economic crises – and the independent writers who represent about the only growth segment of the industry through their online blogs.

The idea behind the creation of the Paulick Report was to offer independent coverage of an industry that, for the most part, has been given a free pass from the press. We’ve tackled many subjects people in the industry have talked about for years but were left untouched by the media. Foremost among those issues is the leadership that is largely responsible for the problems the industry now faces.

Among other subjects, we’ve examined how the Breeders’ Cup has evolved over the last 25 years, going from a small group of self-appointed leaders to a more democratic process where nominators to the program have a say over who is charge. But the battle for control has been fierce, between the “old guard” led by Will Farish, his son Bill and some close associates, and the “new guard,” represented by people like Bill Casner of WinStar Farm.

Many of the Breeders’ Cup nominators weren’t very happy in December when the organization’s board of directors voted to eliminate the special stakes program supplements that have been a key part of the program since 1984. The Paulick Report covered that story aggressively and accurately, reporting on the significant losses of the Breeders’ Cup’s investment portfolio, which coincided with the decision to eliminate the stakes supplements. The uproar was substantial, and in an unprecedented move, the board quickly reversed its decision and kept the stakes program for at least another year.

We’ve taken a close look at how the Jockey Club, run for years by Dinny Phipps, has tentacles reaching into many other industry organizations in an attempt to control as much of the business as possible. We also reported on how The Jockey Club, whose principal purpose is to be the Thoroughbred breed registry, has built a family of for-profit companies that have done quite well financially at the expense of industry participants.

Another company that has prospered is the Keeneland Association (which we referred to as “Lexington’s Fort Knox” in a two-part series that culminated with the question “Who Owns Keeneland?”) The articles explained how Keeneland took over the sales company from a horsemen’s co-op and has since earned hundreds of millions of dollars, and how the once publicly held shares in Keeneland were acquired by the association over a number of years and are now in the hands of a holding company.

We had fun with some of these stories. When the Thoroughbred Owners and Breeders Association gave its own Sales Integrity Committee an industry service award (the headline was “TOBA gives award to…TOBA”), we called them on it (as if nobody else noticed the self-congratulatory move).

One of the hot-button issues in recent years is medication. Bad news has been abundant in that area (Rick Dutrow was the 2008 Triple Crown poster child for medication and other violations, and several additional high-profile trainers also had horses test positive for prohibited drugs), but there was good news, too. Anabolic steroids, which for years had been one of racing’s dirty little secrets (they were considered a therapeutic drug and were legal in most states), were subjected to strict regulations in many jurisdictions in 2008 and early 2009.

Another significant problem the industry faces is an antiquated tote system owned by three different companies, all of which are for sale. We reported on numerous instances of past-posting, where bettors were allowed to make wagers after races had started and in some cases well after they had been run. Another Paulick Report exclusive focused on how the Jockey Club may get into the tote business with yet another for-profit subsidiary. Stay tuned on that one.

Racetracks provided us with plenty of stories to cover, too. Magna Entertainment, the largest track operator in North America, filed for bankruptcy in March. We reported much earlier on the constantly revolving door of executives who have worked for the company and were terminated at the whim of Magna chairman Frank Stronach. It hasn’t been a stable company at any point in its brief history.

We exposed how Churchill Downs, which has been far more successful than Magna, is trying to squeeze purse revenue by shifting wagers from on-track to its account wagering company, Twin Spires. A feature on the Thoroughbred Horsemen’s Group, which represents various horsemen’s organizations in their negotiations with Churchill and other tracks, provided some good news for horse owners.

The Paulick Report also served as a forum for other writers, including the tireless Fred Pope, the Lexington advertising executive who has been calling the simulcasting model “upside down” because it rewards the bet takers (the site or account wagering company taking wagers on someone else’s race) far more than it does the racetrack and horsemen who staged the race. Pope’s article elicited a record number of responses in the comment section, a unique part of our online publication, which allows the public to sound off on the issues.

We broke our share of stories over the past year: Curlin going to Lane’s End for stud duty; the Ernie Paragallo horse abuse case in New York; the efforts of “old guard” Breeders’ Cup board members to keep NetJets chairman and longtime horse owner and breeder Richard Santulli, along with Hill ‘n’ Dale Farm owner John Sikura, off the organization’s operating board; layoffs at Churchill Downs and Blood-Horse magazine, along with the elimination of several turf writers at big city daily newspapers; Halsey Minor’s efforts to buy Hialeah from John Brunetti, and Minor’s attempt to purchase many of the Magna tracks out of bankruptcy; and the Thoroughbred Owners of California’s decision to bid for Santa Anita from the same bankruptcy proceedings.

Live blogging was an interesting and effective way to cover some of the events and get the news out as it happens: among them were the Congressional hearings into horseracing last June, industry conferences and regulatory meetings, and the Eclipse Awards in January.

Do we have any regrets? Sure, perhaps the tenor of some of the stories were overly critical and sometimes too personal.

But the overwhelming feeling I have for the last year is gratitude. Our readership has more than tripled since our launch, and we have continued to build support from the Thoroughbred advertising community, even though they understand they are not buying favorable coverage with their dollars. It is gratifying that so many businesses support this kind of independent journalism, and we hope those who haven’t will see the benefits of what the Paulick Report offers to the industry.

Thanks to our readers, those who have given us moral or financial support, and our advertisers.

We’re just getting started.

Copyright © 2009, The Paulick Report

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IS COMPETITION OR ARROGANCE KILLING BLOOD-HORSE?

Tuesday, June 2nd, 2009

By Ray Paulick
“What kills a company is not competition, but arrogance. We control our fate.” So said Eric Schmidt, the chairman and CEO of online giant Google in an article in the New Yorker magazine last year. 

Stacy Bearse, the president and publisher of Blood-Horse Publications, apparently doesn’t share that belief. In a staggering show of arrogance, Bearse recently sent a letter to members of the board of trustees of the Thoroughbred Owners and Breeders Association, which owns the company, urging them to shift their advertising dollars away from Blood-Horse’s competition, specifically Thoroughbred Times and Thoroughbred Daily News, and spend their money with him. He made a similar plea to undermine his competition during a TOBA board meeting in Lexington in April. (Click here to read his recent letter.)

(Fortunately, he didn’t tell TOBA trustees, many of whom are associated with major stallion farms that make up the bulk of the advertising market, not to advertise with the Paulick Report, the horse industry’s fastest-growing web site. Please feel free to contact us to learn more about our cost-effective advertising opportunities!)

“The market is simply not large enough to support two profitable weeklies,” Bearse wrote to the TOBA trustees. “There’s a very good chance that one won’t survive this downturn. It may come down to who runs out of cash first.”

I contacted Joe Morris, publisher of Thoroughbred Times, to see if he had any comment about Bearse’s assertion. Morris disagreed that the market couldn’t support two magazines but said he wasn’t going to get caught up in a fight and instead chose to "go out and sell something."

Bearse said declines in advertising revenue have caused Blood-Horse to reduce the company’s workforce and cut salaries and benefits. Among those let go in the most recent round of layoffs were writers Amanda Duckworth, the inaugural Joe Hirsch Scholarship winner and a graduate of the University of Kentucky’s journalism school, and Ryan Conley, a top-notch reporter with extensive industry experience, knowledge and contacts. Both were dedicated professionals, but many other good people have lost their jobs at the company in the last 18 months. Thoroughbred Times and Thoroughbred Daily News have not had to take such drastic measures.

“My job is to ensure that your magazine – The Blood-Horse – is the last one standing, and that it emerges from this dark period strong and successful,” Bearse wrote.

That’s good news, I thought, as I read the letter to the TOBA trustees. My old boss (I was Blood-Horse editor from 1992-2007) surely must have a plan to improve the efficiency of the staff or make the product more timely, interesting or relevant to readers. The last thing I want to see are more of my former colleagues out of work, and less coverage of Thoroughbred racing and breeding, whether in print or in digital form. The Paulick Report believes competition is good for any business.

Apparently, that isn’t the case with Stacy Bearse: his plan is to kneecap the competition.

“But for us to succeed,” he wrote to the TOBA trustees. “I need your support. If you advertise in TDN or Thoroughbred Times, consider shifting your dollars to The Blood-Horse. If you divide your advertising, consider consolidating your investment in The Blood-Horse. If you board your mares or own a controlling interest in a stallion, encourage the farm manager to support The Blood-Horse.”

Then came Bearse’s most chilling comment: “You don’t need two weeklies to cover this market.”

That is exactly why the Paulick Report was launched, to prevent the consolidation of news and analysis for this industry into one, Pravda-like, party-line publication, and to ensure that it has an independent voice.

As someone else pointed out to me, Blood-Horse and the Thoroughbred Record (now merged into the Thoroughbred Times) both survived the Great Depression and the Times and Blood-Horse made it through the severe horse industry slump from 1985-92. Following that same logic, would the horse industry be better off with just one large stallion station instead of all the competing farms, or one auction house?

I think Eric Schmidt was right: It’s not the competition that kills a business.

Copyright © 2009, The Paulick Report

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HEY COMMISH! YOUR CHANCE TO BE HEARD

Monday, April 20th, 2009

By Ray Paulick
Are you happy with the job racing regulators are doing? Could these individuals who serve on commissions, boards, or government agencies, many of them as unpaid political appointees, be doing a better job? What about the paid staff at the commission level, or the racing commission stewards or veterinarians?

That’s what Ed Martin, the president of the Association of Racing Commissioners International, wants me to sound off about during a panel discussion tomorrow at the RCI’s annual convention in Lexington: what’s working and what isn’t working on the regulatory side of this struggling industry.

I’ve got my own opinions to be sure, mostly about things that aren’t working. But I want to know what you think. If you’re an owner, breeder, trainer, horseplayer, industry employee or casual fan, I’d like to know what message you think I should carry to this gathering of racing commissioners. Pretend you’re racing commissioner for a day: what are the issues most important that racing regulators can act upon? What needs addressing now?

Please use the comment section below to make your voice heard. (If you have something to say you would prefer not be seen publicly, please send me an email at ray@paulickreport.com).

 

 

Copyright © 2009, The Paulick Report

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THOROUGHBRED MEDIA: MAYBE WE CAN BLAME THE MESSENGER

Monday, April 13th, 2009
By Ray Paulick
When launching the Paulick Report last June, I promised readers that we would provide unvarnished coverage of the Thoroughbred industry, reporting on the large reservoir of news left uncovered by the trade magazines and breaking stories other publications avoid. And I believe the fact traffic on the site has more than doubled in less than a year shows this promise has at least somewhat been fulfilled.

I received call at the time of our launch from a Central Kentucky breeder who wields a great deal of clout in both industry leadership positions and advertising decisions. “Good,” he said about the philosophy behind the Paulick Report. “It’s about time. I think the Thoroughbred media is in part to blame for the mess we’re in. It’s been too afraid to cover the tough issues.”

That comment stung, since he was saying that for the 15 years I was at Bloodhorse magazine I was part of the problem. As the editor of a publication owned by the Thoroughbred Owners and Breeders Association and controlled by an old-guard board of trustees dominated by Jockey Club members, I had to pick my spots carefully when I felt the industry’s feathers needed ruffling. Criticism of the TOBA’s Graded Stakes Committee and calls for more transparency at Thoroughbred auctions didn’t go over real well. “You’re turning the magazine into the National Enquirer,” one Bloodhorse board member said to me after I wrote an editorial questioning the integrity of the auction process. “How are we ever going to get new people interested in buying our horses if you keep printing negative things?”

“Maybe if the auction process is cleaned up and more transparent, people will have increased confidence that it’s a fair marketplace,” was my naïve response.

I came away from that conversation convinced this particular individual wasn’t enamored with the idea of a free press, no matter what the U.S. Constitution says. Great guy to have on the board of trustees for a magazine.

I thought of that board member last week when the industry was awash in bad news on several fronts and Bloodhorse.com was putting a happy face on every story.

– Quality Road, the winner of the Florida Derby, was being treated for a quarter crack, something his trainer, Jimmy Jerkens, said is “always serious.” The Bloodhorse headline read: “Quality Road Quarter Crack Not Serious.”

– Trainer Jeff Mullins was allegedly seen by security personnel treating Gato Go Win with a prohibited substance in Aqueduct’s detention barn in a stakes race on the undercard of the Wood Memorial, a race won by the Mullins-trained I Want Revenge. Kudos to Throughbred Times for breaking the story. But California horsemen and fans familiar with Mullins’ history could only shake their heads when Bloodhorse.com ran a headline that said, “Mullins: NY Incident Honest Mistake.” To put an even happier face on the subject, Bloodhorse.com then ran a commentary under the headline: “Lets Look on the Bright Side of Mullins Incident.” If that wasn’t enough, Bloodhorse.com ran a third article saying: “Owner Not Angry With Mullins.” I’m sure that was reassuring to horseplayers.

– Undernourished and lice-infested horses owned by owner-breeder Ernie Paragallo were found at a New York livestock auction’s kill pen, and allegations of malnourishment of dozens more were first reported in the Paulick Report and by Joe Drape in the New York Times on April 3. Yet it wasn’t until four days later that the first staff-written account of the deplorable situation made its way onto Bloodhorse.com, and that story was mostly generated by press releases from the New York State Racing and Wagering Board and Jockey Club. ThoroughbredTimes.com did no better on this one, writing its first story on the Paragallo investigation that same day, well after the story had been picked up by other mainstream publications.

(To be fair, Daily Racing Form’s Matt Hegarty wrote an outstanding and balanced article on the issue of horse slaughter, spurred on by the Paragallo investigation.)

Was the hesitation on the part of both Bloodhorse and Thoroughbred Times due to the fact that Paragallo is co-owner of Unbridled’s Song, who stands at stud in Kentucky at Taylor Made Farm, a major advertiser with both publications?

I can speak from personal experience that fear of advertising repercussions by bean-counting publishers is at the heart of some editorial decisions at horse industry trade publications. There is a fear by these publishers, unwarranted in my opinion, that advertisers are not interested in reading the truth about their industry.

I think a majority of the advertisers are more like the breeder who called when I launched the Paulick Report and encouraged me to be tough, honest and fair in what I write. They understand that without a strong and independent press, we will continue to sweep our problems under the rug, something this industry can ill afford.

Copyright © 2009, The Paulick Report

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