Posts Tagged ‘Will Farish’
Tuesday, December 29th, 2009
NTRA PRESS RELEASE
December 29, 2009
The National Thoroughbred Racing Association (NTRA), Daily Racing Form and the National Turf Writers Association today announced that William S. Farish, owner of Lane’s End Farm and a pre-eminent industry leader of multiple organizations and causes, will be honored with the Eclipse Award of Merit for a lifetime of outstanding achievement in Thoroughbred racing.
Farish will receive the Eclipse Award of Merit on Monday, January 18 at the 39th Annual Eclipse Awards ceremony at the Beverly Wilshire Hotel in Beverly Hills, Calif.
“I am so honored to have been selected for a sport which has given me and my family so much pleasure and enjoyment for the past 35 years,” said Farish, who resides in Lexington, Ky. “I am humbled to be chosen to join this list of outstanding people who have received this Award of Merit, many of whom have been long time friends.”
A successful owner and breeder who has served the Thoroughbred industry in a number of high-profile positions, Farish is one of the world’s most well-known and influential horsemen. He is a steward and vice chairman of The Jockey Club, a director and former chair of the executive committee of the Breeders’ Cup (for which his son, Bill, currently serves as chairman of the board), a member of the board of directors of the Keeneland Association, and a Keeneland trustee. He was chairman of the board of Churchill Downs from 1992-2001, where the company grew from a single race track to a multi-track corporation.
“Will Farish is deeply involved in every phase of the Thoroughbred Industry,” said Keeneland president Nick Nicholson. “If you follow the life cycle of the Thoroughbred each stage from mating, breeding, raising, registration, sales, training, racing, and then back to the farm for breeding, Will has positively impacted each step along the way. His knowledge, passion and willingness to give of his time for the betterment of the Industry and the sport have meant so much for the modern Thoroughbred world. We are grateful to have him serve as a trustee of Keeneland and appreciate his advice and counsel.”
In June, the William Stamps Farish Fund donated $1 million to the Permanently Disabled Jockeys Fund (PDJF). As a member of the PDJF board, and working with its executive director, Nancy LaSala, Farish is helping to raise some $10-12 million to endow a fund that will provide continuous support for disabled riders. “The more I explored the situation,” said Farish, “the more I realized that a sustaining pool of monies was necessary. I feel that everyone who is associated with our sport realizes that a permanent source of funding is needed improve the lives of these disabled riders.”
Farish was born in Houston, Texas and is the grandson of the late William S. Farish II, the founder of Humble Oil and Refining and chairman of Standard Oil of New Jersey. Farish’s grandfather founded the famed Lazy F Ranch in Texas, which campaigned three-time Eclipse Award Champion Horse of the Year Forego in the mid-1970s.
Will Farish purchased his first Thoroughbred in 1963. In 1972, he campaigned Preakness Stakes winner Bee Bee Bee. In 1979, Farish founded Lane’s End, a stallion and breeding farm and public sales operation that covers more than 3,000 acres near Lexington, Ky. Among the 22 stallions currently standing at Lane’s End are 1992 Eclipse Award Champion Horse of the Year A.P. Indy; 2003 Eclipse Award Champion Horse of the Year Mineshaft, which Farish campaigned; leading sire Smart Strike; and Smart Strike’s sons Curlin, Eclipse Award Champion Horse of the Year in 2007 and 2008, and English Channel, 2007 Eclipse Award Champion Turf Male. With the late Warner L. Jones Jr., Farish bred Seattle Dancer, who set the world-record price for a yearling when he was sold for $13.1 million in 1985. Farish is a two-time recipient of the Eclipse Award as leading breeder, including in 1999 when he and his partners bred the winners of all three Triple Crown races that year. Farish has raced more than 150 stakes winners in his name or with various partners.
From 2001-2004, Farish served as the U.S. Ambassador to the Court of Saint James, and the Farishes have hosted Queen Elizabeth II on her visits to Kentucky, most recently to attend the 2007 Kentucky Derby.
“In his many leadership roles over the years, Will Farish has been an immensely important contributor to the sport and business of Thoroughbred racing,” said D.G. Van Clief, Jr., former president and CEO of the Breeders’ Cup and the National Thoroughbred Racing Association. “Whether serving as an Epsom Oaks-winning U.S. Ambassador to Great Britain, the chairman of Churchill Downs, a trustee of Keeneland or the master of Lane’s End Farm, his presence has ensured progress and success. I know firsthand that Will’s service as the chairman of the Breeders’ Cup executive committee was instrumental to its successful launch and subsequent growth as a world championship. Without him it would not be the globally respected event it is today. Wherever Will Farish has applied his personal brand of leadership the sport has benefited, and there is no more deserving recipient of this award.”
The Eclipse Awards are bestowed upon horses and individuals whose outstanding achievements in North America have earned them the title of Champion in their respective categories. The Eclipse Awards are named after the great 18th-century racehorse and foundation sire Eclipse, who began racing at age five and was undefeated in 18 starts, including eight walkovers. Eclipse sired the winners of 344 races, including three Epsom Derbies.
The 39th Annual Eclipse Awards will be held on Monday, January 18 at the Beverly Wilshire Hotel in Beverly Hills, Calif. For hotel accommodations and Eclipse Awards ceremony reservations, contact Michele Ravencraft at the NTRA’s Lexington office, (800) 792-6872, or e-mail mravencraft@ntra.com.
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Tags: churchill downs, D.G. Van Clief Jr., daily racing form, eclipse award of merit, eclipse awards, farish, Keeneland, Lane's End, national turf writers association, nick nicholson, NTRA, pdjf, permanently disabled jockeys fund, Will Farish, William S. Farish
Posted in People, eclipse awards | 3 Comments »
Tuesday, October 6th, 2009
By Ray Paulick
Based on comments from trainer John Oxx, there seems little doubt that Sea the Stars, who ran his consecutive Group 1 win streak to six with a victory in Sunday’s Qatar Prix de l’Arc de Triomphe at Longchamp, will be retired to stud for the 2010 breeding season. There has been no indication, however, that 27-year-old Christopher Tsui, owner of this racing superstar, has had serious discussions with any specific stallion station in Europe or the United States. Bloodstock experts peg the colt’s value at stud in excess of $50 million, even in the currently depressed market.
Thirty or more years ago a horse like Sea the Stars would almost certainly stand in Kentucky. That’s where the money was for major stallion syndications, and it was home to the world’s finest broodmares, giving a stallion prospect the best chance possible to succeed at stud. John Galbreath brought Roberto home to his Darby Dan Farm in Kentucky after the son of Hail to Reason raced to glory in the United Kingdom. Nijinsky II, a son of the great Northern Dancer, was retired to Claiborne Farm following his outstanding career in Europe carrying Charles Engelhard’s colors. John Gaines populated his stallion roster at Gainesway Farm with a number of top Europeans runners.
Times have changed. Like those horses mentioned above, Sea the Stars has raced exclusively on grass, and American breeders in the present era have shown an aversion to breeding to turf horses, no matter how accomplished they were on the racetrack. There are a few exceptions, among them Kingmambo at Lane’s End, Dynaformer at Three Chimneys, and Giant’s Causeway at Coolmore’s Ashford Stud. In addition, European sire power has skyrocketed, particularly at John Magnier’s Coolmore Stud in Ireland and Sheikh Mohammed’s Darley divisions at Kildangan Stud in Ireland and Dalham Hall Stud in England. European breeders have upgraded the quality of their broodmare bands to match this increased sire power.
“There is a prejudice here against grass horses,” said Barry Irwin of Team Valor. “The Keeneland sales have dictated what kind of stallions are accepted. I’ve got three mares I’m selling in Europe next year, but there’s nothing we can breed to here. The good thinkers like John Gaines have been replaced by guys who don’t have the same scope.”
That begs the question of whether a horse like Roberto or Nijinsky II would succeed in the United States in the current climate, and if contemporary American breeders would support Sea the Stars. Will Farish, owner of Lane’s End, thinks the answer to both questions is “yes.”
“I think Roberto and Nijinsky would succeed today if they got the support,” Farish told the Paulick Report, “though there are fewer people breeding for the classics now. Breeders over here have tended to have much more luck with our mile and mile and an eighth sires. They are the ones in most demand.”
Farish said he believes American breeders would support Sea the Stars even though “it’s been much harder to get people to breed to a grass horse.” He cited Giant’s Causeway as an example of a top-class European turf horse who has been well supported in the United States, though the son of Storm Cat is out of an American Graded Stakes-winning mare and showed good dirt form when narrowly beaten by Tiznow in the 2000 Breeders’ Cup Classic at Churchill Downs. “With his outstanding race record and that pedigree (by Darley’s leading sire Cape Cross out of Arc de Triomphe winner Urban Sea, who produced Epsom Derby winner and top sire Galileo) I would think you could stand Sea the Stars anywhere and he would get tremendous support,” Farish said.
Headley Bell of Mill Ridge Farm in Kentucky concurs. “He’s exceptional in that same kind of category (as Nijinsky II and Roberto). He’s an extraordinary horse, and the cream of Thoroughbred breeders around the world would want to breed to him,” Bell said. “You could make 40 phone calls and sell him out (for syndication as a stallion).”
The Irish National Stud has been the only farm mentioned as a leading candidate to land Sea the Stars, and that’s because of an existing relationship with the horse’s owner. Urban Sea, dam of Sea the Stars, was kept there until her death earlier this year. “They’ve done an incredible job of making stallions,” Bell said of the National Stud. “John Oxx is such a class person. I would think they would lean in that direction.”
Standing Sea the Stars in the U.S. would seem to be a longshot at this stage. The increased size of stallion books and the emphasis on commercial breeding has contributed to the squeezing out of turf sires in the U.S.
“Grass horses haven’t been very popular the last 10 or 15 years,” said one breeder who asked not to be named. “Maybe breeders will start breeding for the winner’s circle instead of the sales ring.”
“Commercial breeders have hit a bubble,” said Thomas Gaines, son of the Gainesway Farm founder who co-owns Gaines-Gentry Thoroughbreds. “We’ve grown the commercial breeding part of the marketplace more than we’ve grown the number of people who show up and buy yearlings. Commercial breeding is contracting now because there are not enough people to buy the horses. Supply and demand has to recalibrate.”
Gaines said one mark of a stallion’s success today is “when the breed-to -race people start breeding to them, and half or more of a stallion’s book consists of people breeding to race. There are still a lot of those people out there, and they’ll support a horse like Sea the Stars. If he stood at a farm in Kentucky, you’d also have a lot of Europeans sending their mares here. That’s how it was in the 1980s.”
Bernie Sams of Claiborne Farm isn’t so sure. “Grass horses are a hard sell whether they ran overseas or here,” said Sams. “I wonder how many grass-type mares are left in Central Kentucky. Look at those races run over the weekend in France and England; Europeans are breeding to European stallions.”
It’s not just the bias against grass horses that adds to the challenge of making a stallion, said Sams, it’s getting a competitively sized book of mares. “How would you do with a horse like Danzig nowadays?” he asked of Claiborne’s late three-time leading stallion who went to stud off just three races, none in stakes. “Because of book size, if you had to get a horse like him started, it would be tough. Book sizes have hurt to an extent.”
Clifford Barry of Pin Oak Stud agrees. “Trying to get 150 mares to a horse is the biggest difference between now and 20 years ago,” he said. “But if you’ve spent a lot of money on a stallion prospect, you’ve got to try and recoup that cash. And there’s going to be some guys that aren’t going to recoup that money.
“It’s a tough market, and it’s been a tough market. It’s been an uphill struggle to maintain a top-class grass horse like Sky Classic (who stands at Pin Oak) here in Central Kentucky. Our game is driven so much by the commercial market, and the ones who sell well are not always the horses with the highest percentage of stakes winners.”
As for Sea the Stars, Barry sees only a few farms in the U.S. or Europe that have access to the money and the best mares that a top stallion prospect deserves. “The pool of mares is so important,” he said.
“This horse is one of the best 3-year-olds Europe has seen in 20 years or more. Every time they have asked him a question, he’s answered them, and he’s been managed impeccably by John Oxx. I don’t care where he stands, he will be a serious kind of stallion prospect.”
If he were to stand in the U.S., what about that bias against grass horses?
“He’s got a different kind of gene,” Barry said. “He’s great, not grass.”
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Tags: barry irwin, bernie sams, cape cross, christopher tsui, Claiborne Farm, clifford barry, danzig, darby dan farm, gainesway farm, headley bell, irish national stud, John Gaines, john oxx, lane's end farm, mill ridge farm, nijinsky ii, Paulick Report, pin oak stud, Ray Paulick, roberto, sea the stars, Thomas Gaines, urban sea, Will Farish
Posted in Breeding, Kentucky, Racing Greats, Stallions | 20 Comments »
Thursday, June 25th, 2009
By Ray Paulick
Permanently disabled jockeys got a huge boost today with the announcement that the Williams Stamps Farish Fund has pledged $1 million to the Permanently Disabled Jockeys Fund, the organization currently assisting 60 former riders who have been seriously injured in racing accidents.
The president of the Farish Fund is William S. Farish, the owner of Lane’s Farm and vice chairman of the Jockey Club. His pledge, to be annualized with equal payments over four years beginning in 2009, was accompanied by a message of hope that others in the industry will also step up on this issue.
“I’ve made a lot of friends over the last 30 years who are riders,” Farish told the Paulick Report. “They are in a position that if something happens to them, they don’t have the support financially to move forward. There’s a void. I think this is something that everybody connected to our sport ought to be contributing to: owners, breeders, everyone who is involved in some way or another with racing. These are independent contractors, they’re not protected once they go down, and there’s nothing for them to fall back on.”
The PDJF was formed in 2006 with the assistance of the National Thoroughbred Racing Association (NTRA Charities) and several racetracks, including those owned by Magna Entertainment and Churchill Downs Inc. A number of racetracks, owners, corporate sponsors and organizations have supported the PDJF.
It was necessitated after the former Disabled Jockeys Fund administered by the Jockeys’ Guild ran out of money during the disastrous administration of Wayne Gertmenian, who was ousted in November 2005 after virtually sending the organization into bankruptcy over the previous four years. The PDJF now stands alone as a 501(c)3 charity. Nancy LaSala is executive director of the Fund, overseeing its annual operating budget of approximately $800,000.
For more on the PDJF, click here to see the May 29 feature on the organization that was part of the Paulick Report series, Good News Friday Sponsored by Liberation Farm.
Farish said the PDJF has “been on my radar for a while.” There is a separate endowment, created by the Guild, that Farish hopes can be built up to $10-million to $12-million. It currently has about $2 million, but the money cannot be used until it reaches a certain level.
The Williams Stamps Farish Fund has actively supported numerous community and racing organizations, including Grayson-Jockey Club Research Foundation, the Maxwell H. Gluck Equine Research Center at the University of Kentucky, the National Museum of Racing in Saratoga Springs, N.Y., and the Kentucky Derby Museum, among others. “I’m hopeful and feel like by putting our name behind this very, very important organization, we can help financially and draw attention to the need,” he said.
“We are deeply grateful to Mr. Farish for his commitment to the PDJF and the disabled athletes it supports,” said executive director LaSala said in a press release. “Thanks to his generosity and leadership the PDJF can now focus more attention on building the endowment that will ensure that financial assistance for our disabled riders will always be available.”
Contributions to the PDJF may be directed to: PDJF, P.O. Box 803, Elmhurst, IL 60126. All contributions are tax-deductible. For inquires contact Nancy LaSala at (630) 595-7660. For more information visit www.pdjf.org.
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Tags: churhcill downs, disabled jockeys, Lane's End, Magna Entertainment, nancy lasala, ntra charities, pdjf, wayne gertmenian, Will Farish, William S. Farish, williams stamps farish fund
Posted in Jockeys, People, racing injuries | 13 Comments »
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.
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Tags: Bill Casner, Dinny Phipps, fred pope, Jockey Club, Keeneland Association, Magna Entertainment, Paulick Report, rick dutrow, steroids, Thoroughbred Horsemen's Group, TOBA, Twin Spires, Will Farish
Posted in Paulick Report | 36 Comments »
Tuesday, February 3rd, 2009
By Ray Paulick
President Barack Obama, on his first full day in office, called for higher standards in transparency and accountability for his administration. While there already have been some bumps on that road, our new president’s demands are in line with a broader movement toward greater transparency, accountability and openness, not only in government but in private enterprise as well.
A recent scandal in Lexington, Ky., involving the executive director of Blue Grass Airport and several of his key staff was uncovered only after the local newspaper, the Herald-Leader, filed an open records request and examined travel and expense reports of airport executives. What the paper found was shocking: thousands of dollars of taxpayer’s money spent on a night of partying at a Texas strip club, airport credit card purchases of a shotgun, audio systems, DVDs and other items seemingly unrelated to the operation, including scalped tickets to a Hannah Montana concert at Rupp Arena.
The airport’s oversight board at first dismissed the newspaper’s charges that the executive director’s travel and entertainment expenses were exorbitant, but after conducting an internal audit discovered numerous irregularities and suspended him. Shortly thereafter he resigned.
The episode teaches us several valuable lessons, including the importance of a free press, open records law, and vigilance by members of oversight boards. Without transparency or sunshine laws, it’s likely the airport scandal never would have been uncovered and taxpayers would continue to be abused by officials entrusted to serve them.
While I am by no means suggesting similar transgressions are taking place, a call for greater transparency and accountability is also at the heart of Thoroughbred owner and breeder Peter Blum’s recent criticisms of the Breeders’ Cup – a non-profit company funded in part through stallion and foal nominations by thousands of breeders. Following a guest commentary he wrote for the Jan. 10 edition of the Thoroughbred Times and a follow-up letter to the editor published in both the Jan. 31 Thoroughbred Times and Feb. 2 Paulick Report, Blum has heard from a number of fellow horsemen who are in philosophical agreement.
“As a result of my willingness to speak out, many people have contacted me and have expressed their concerns and serious reservations about Breeders’ Cup management,” Blum told the Paulick Report. “One theme that continually comes up when people share their thoughts with me is, ‘What are they trying to cover up?’ Have there been any bonuses recently paid, particularly in this troubling economy when (President Obama) in the last few days referred to bonuses paid to bankers as shameful, outrageous and the height of irresponsibility? If there have been any bonuses, who got them, when they did get them, and how much did they get? And if they were given, why were they given, especially in light of the Breeders’ Cup announcement to cut off supplemental funding for 121 races throughout the year? (That decision was quickly reversed.) Furthermore, have there been any recent senior management contract extensions. If so, who got them, and when and why were they given?”
Blum sees things only getting worse unless there are changes in how the Breeders’ Cup operates. “There is very little transparency and it is apparent that is the core of all major issues,” he said. “Does the Breeders’ Cup management not understand how angry its members are? Unless transparency soon occurs, the Breeders’ Cup cannot succeed in its present form. And has there been any disclosure to membership of an agenda of board member meetings, votes, and minutes? If not, why not?”
The Breeders’ Cup moved toward a democratically elected board in 2006 after complaints from some breeders that it had been run for too long by a handful of people selected by a self-perpetuating board of directors. But as Blum pointed out in his letter to the editor, there are flaws in the revised bylaws that appear to stack the election process in favor of the status quo.
Thirty-nine individuals are elected to the board of members and trustees by stallion and foal nominators (each year, 13 of the 39 seats are up for election to three-year terms). Those members and trustees are responsible for electing the 13-member operating board of directors. However, in addition to the 39 elected members and trustees who vote for the smaller board, also given votes in the small board election are six “founding fathers” of the Breeders’ Cup: Brownell Combs, formerly of Spendthrift Farm; William S. Farish of Lane’s End; Seth Hancock of Claiborne Farm (whose proxy has been permanently bestowed upon farm executive Jim Friess); Brereton Jones of Airdrie Stud, John T. L. Jones, director emeritus of Walmac Farm; and James Philpott, an attorney who has served as Breeders’ Cup secretary. Two former Breeders’ Cup presidents, James E. (Ted) Bassett III and D.G. Van Clief Jr., also are entitled to vote in the small board election, as are four current officers of the Breeders’ Cup, including CEO Greg Avioli.
It strikes me as unfair to “grandfather” any founding fathers onto the board of members and trustees. When the U.S. Constitution was written, individuals who signed the Declaration of Independence were not given a lifetime seat in Congress. Representatives of farms like Coolmore, Darley and Three Chimneys, among many others that have been major financial contributors to the Breeders’ Cup, are forced to actively run for a board seat while those farms associated with founding members get an automatic seat. Furthermore, at least two of the founding Breeders’ Cup members are no longer actively engaged in the business. Doesn’t seem right.
It also seems downright scandalous to allow paid staff, including CEO Avioli, to vote for who their bosses will be on the operating board of directors. Human nature suggests they will always favor those who butter their bread.
Blum also takes issue with how votes are allocated to those farms with stallions (stallion owners are entitled to one vote for each $500 of a stallion’s stud fee).
“It appears that large farms standing stallions may control the outcome of the election of inner and outer board members,” Blum said. “For example, if Gainesway stands a syndicated stallion like Tapit or Mr. Greeley, the farm is given all of the votes, not the actual owners or shareholders of the stallion. If this is true, won’t this inequity come as a surprise to most breeders?” (Editor’s note: It is believed that some stallion syndicate agreements may convey Breeders’ Cup votes to majority shareholders.)
As a result of the inequities he sees in the bylaws, Blum calls for widespread change in the election process.
“In view of the existing controversy, will management agree to submit to membership the right to hold a new election for board members under a more democratic process sooner rather than later?” he asked. “When will the BC provide an accounting of all the nomination fees paid in, and why have we not received them to date?”
Breeders’ Cup board member Satish Sanan wrote a rebuttal to Blum’s commentary that was published in the Thoroughbred Times of Jan. 24. Sanan later spoke with the Paulick Report about some of the issues raised by Blum, along with his own role as chairman of a Breeders’ Cup strategic planning committee.
“Mr. Sanan appears to be a constructive voice at the Breeders’ Cup and I hope his efforts bring much needed changes in transparency and benefits to breeders,” said Blum.
Blum said he hopes his decision to speak out on the management and direction of the Breeders’ Cup is not misinterpreted
“My remarks were intended as constructive criticism of Breeders’ Cup management and recommendations for change,” he said. “In no way were they made to be personal in nature or an attack on the Breeders’ Cup concept or festival of racing. On the contrary, my remarks were intended to encourage needed change and redirection of management.”
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Tags: airdrie stud, barack obama, blue grass airport, blue grass airport scandal, Breeders' Cup, Breeders' Cup board of directors, brereton jones, brownell combs, Claiborne Farm, coolmore, D.G. Van Clief, darley, gainesway, Greg Avioli, James E. Bassett, james philpoptt, jim friess, John T.L. Jones Jr., Lane's End, Paulick Report, peter blum, Ray Paulick, satish sanan, Seth Hancock, spendthrift farm, Ted Bassett, Three Chimneys, walmac farm, Will Farish, William S. Farish
Posted in Breeders' Cup, Industry Organizations | 21 Comments »
Friday, January 23rd, 2009
By Ray Paulick
Satish Sanan has never been afraid to speak his mind, whether he’s at a Thoroughbred auction, the racetrack or a corporate boardroom. Still a relative newcomer to this industry (he and wife Anne bought their first yearlings at Keeneland in 1997 for his family’s Padua Stables), Sanan has been a proponent of greater transparency and disclosure in many facets of racing and breeding.
A native of India who was educated in England and is now a U.S. citizen and successful businessman, Sanan was first asked to join the Breeders’ Cup board in 2003. He was elected to the 13-member board of directors when the organization restructured its governance in January 2006. “I’ve seen the good, the bad, and the ugly when it comes to the Breeders’ Cup,” Sanan told the Paulick Report, “but I’ve seen a lot of progress lately.”
If there is progress in the future, Sanan might deserve a large share of the credit. He is head of a strategic planning committee that’s hired a world-class consulting firm to examine virtually every aspect of the Breeders’ Cup and present a strategic plan to the board of directors in July. The committee was his idea, after he criticized the organization for not having a five- or 10-year strategic plan, instead operating tactically on a year-to-year basis and making decisions on what Sanan called “knee jerk reactions” to events.
But while Sanan has been critical of some aspects of the Breeders’ Cup, he strenuously objected to the tone and content of an editorial written by owner-breeder Peter Blum that appeared in the Thoroughbred Times of Jan. 10, 2009, and was referenced here in the Paulick Report. Sanan wrote a rebuttal to Blum that was published in the Jan. 24 edition of the Thoroughbred Times, citing a series of changes and improvements to the Breeders’ Cup since the new board was elected three years ago. (Neither Thoroughbred Times commentary is available online.)
“I felt the (Blum) article was all negative and non-factual,” Sanan told the Paulick Report. “He is objecting to a number of things, but doesn’t back it up with anything, and I tried to go through it step by step and back it up with a lot of data.”
Sanan said there are some who will criticize “whatever the Breeders’ Cup board and its management do. The perception is that it’s still the ‘old guard,’” he added, “that (board chairman) Bill Farish runs it and his dad (William S. Farish of Lane’s End) tells him what to do. But the reality is a lot of people on that board are pretty damned vocal and will say what they want to say. From operations to communications to financial management to the whole structure, I tell you it is so much better than it was five years ago.”
The younger Farish and chief executive officer Greg Avioli worked closely with Sanan in the early stages of the strategic planning process, beginning in August and September. “We asked for volunteers (among the 48 individuals on the Breeders’ Cup board of members and trustees) and got a very positive response, with more than 15 committee members,” Sanan said.
During a personal trip to London, Sanan scheduled an appointment with Spectrum Value Partners, a global consulting firm that was referred to him by Malcolm Glazer, owner of the Tampa Bay Buccaneers of the National Football League and majority owner of the English Premier League football giant Manchester United. Spectrum Value Partners offers strategic advice to a number of telecom and media clients worldwide, and also has a roster of sports clients, including several teams in the English Premier League. They also have had some horse racing clients, according to Sanan, including At the Races television, the Melbourne Cup and Victoria Cup. Click here to learn more about some of the sports consulting done by Spectrum Value Partners.
“We needed a firm that can take a 500,000-mile view and help us put together a five-year plan,” Sanan said. “The Breeders’ Cup needs to put a plan in place, like NASCAR did 10 years ago, something that says, ‘Here is where we want to be in five years, or 10 years.’
“They did a terrific presentation to the board, and the process has started,” Sanan said.
The first step was development of a lengthy questionnaire distributed to the 48 Breeders’ Cup members and trustees. The nearly 70 questions cover considerable ground, including sections on governance, nominations, perceptions about the Breeders’ Cup, comparisons with other sporting events, international issues, external challenges, and expectations about the future. The consulting team from Spectrum Value Partners, led by partner William Field and assisted by Janice Hughes, Richard Mooney and Sam Evans, will then conduct one-on-one interviews with roughly 50 major industry stakeholders from around the world. It will also gather information from racetracks and horseplayers, Sanan said.
In the midst of this, a two-day retreat for the strategic planning committee will be held in South Florida in February.
“One of the things I’ve been critical of is that we rely on one-day of revenue (now two days) with the championship races and on stallion and foal nominations,” Sanan said. “Breeders’ Cup needs to find alternative forms of revenue and not be dependent on foal nominations from breeders, but to somehow do more for breeders. Should we consider multiple cities for the event, like the World Cup does in soccer? We are in the baking stage, but I believe something good is going to come out of this.
“Whether or not it will be implemented remains to be seen.”
Putting together strategic plans is something Sanan has done in all of his businesses. “If you can put together a five-year plan and execute it, it’s very helpful,” he said. “You may have to adapt the plan each year, tweak it a little because of external events, but we’ve always executed these plans in my businesses. For some reason, a lot of people don’t do it in this (the Thoroughbred) industry.
“There is a big difference between running a business and building a business,” he added. “It’s in building and growing and transforming that you learn a great deal. The Breeders’ Cup is a great entity with a good brand name. We should be able to generate a couple hundred million dollars worth of revenue. This can be transformed into a huge, international, highly successful organization. Whether we can get there or not, I don’t know. But as part of the process, I’m going to give it a go.”
Copyright © 2009, The Paulick Report
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Tags: at the races, Bill Farish, Breeders' Cup, Breeders' Cup board of directors, Breeders' Cup World Championships, english premier league, Greg Avioli, Horse Racing, malcolm glazer, manchester united, melbourne cup, nascar, padua stables, Paulick Report, peter blum, Ray Paulick, satish sanan, spectrum value partners, tampa bay buccaneers, Will Farish, William S. Farish
Posted in Breeders' Cup | 10 Comments »
Monday, December 29th, 2008
By Ray Paulick
One of the first projects that landed on my desk when I joined the Thoroughbred Times as managing editor in 1988 was a feature story on the Jockey Club, the organization historically entrusted with registering Thoroughbreds and being the keeper of the Stud Book. The article was accompanied by a lengthy mail-in survey of Thoroughbred Times readers. The story and the survey results were of great interest, for at the time I had no idea how broadly the Jockey Club reached across the entire industry and how unhappy rank and file breeders then were with the organization’s service, pricing and activities.
It should be noted that there was an agenda to the article. The Thoroughbred Times was then owned by Richard F. Broadbent, whose Bloodstock Research Information Services was facing new competition from a subsidiary of the Jockey Club. There were questions about whether a tax-exempt breed registry like the Jockey Club should create a subsidiary to compete with a private enterprise company like BRIS, which supplied statistical data to breeders, owners and various publications. A few years later, the Jockey Club helped form another for-profit company, Equibase, which competed with the Daily Racing Form to collect racing results (the Form eventually closed its track and field operations and became Equibase’s biggest customer). The Jockey Club has since started other for-profit businesses.
One of the things that struck me was the comparison between how the Jockey Club and the American Quarter Horse Association conduct their business. The Jockey Club is clearly a breed apart from its Quarter Horse counterpart. The AQHA, then and now, is a relatively transparent organization, one whose membership is open and whose leadership is democratically elected through regional and national elections. There is a board of directors, from which comes an executive committee and elected officers. The AQHA has term limits that prevent individuals from maintaining longstanding control of the organization. The AQHA web site publishes a great deal of information about its governance and membership rules, which can be read here.
 By comparison, membership in the Jockey Club has always been by invitation only. Click here for an explanation about membership. It is "governed" by a rotating board of stewards, though that term is used loosely since the Jockey Club has been under the firm control of just two men since 1982, when Ogden Mills “Dinny” Phipps was named chairman and William S. Farish became vice chairman (pictured left). Click here to see the current list of Jockey Club members, stewards, and officers.
The AQHA is a huge organization that maintains the registration of more than five million Quarter Horses, with 135,000 registered in 2007 alone. There are nearly 350,000 AQHA members. According to Internal Revenue Service Form 990 for tax exempt organizations, the AQHA generated $54.4 million in revenue in the 2005-06 fiscal year, the most recent year available. At that time it had $73 million in total assets, including nearly $49 million in investment securities. Click here for the AQHA Form 990.
The AQHA, like the Jockey Club, maintains pedigree records, but also promotes the Quarter Horse breed through horse shows and publishes three magazines (the Quarter Horse Journal, the Quarter Horse Racing Journal, and America’s Horse) that had total circulation of over 400,000 in 2006.
The AQHA charges as little as $25 to register a Quarter Horse foal if done within seven months of birth. The organization is based in Amarillo, Texas, and its highest-paid officer, longtime executive vice president Billie G. Brewer, earned an annual salary of $424,928; treasurer Lee Callaway was paid $221,965 (both figures are from the IRS Form 990.) The two executive salaries represented 5.5% of the AQHA’s total payroll of $11,725,124.
The Jockey Club is also a rich organization, one that is exempt from federal taxes but also has several wholly owned for-profit subsidiaries. The Jockey Club’s 2006 IRS Form 990 states that it registered 37,300 foals that year. The Jockey Club generated $13.2 million in revenue in 2006, the most recent year the figures are available. It claimed $32 million in total assets, including $21.6 million in investment securities. Click here for the Jockey Club Form 990.
In addition, the Jockey Club claimed that its subsidiaries generated over $25.7 million in income for 2006 ($13.7 million by TJC Holdings Inc. & Subsidiaries, which is engaged in information services and software solutions; $4.9 million by The Jockey Club Racing Services, for the collection of Thoroughbred racing data; and $7.1 million by The Jockey Club Technology Services, Inc., for its technology services). Click here for more information on those subsidiaries, which include shared ownership in the data collection company Equibase, and full ownership of TJCIS (The Jockey Club Information Systems and data supplier Equineline), and InCompass Solutions, which provides software systems for racetracks.
The Jockey Club’s IRS Form 990 lists its annual Round Table Conference in Saratoga Springs, N.Y., publication of its Fact Book, and providing financial support to other industry organizations among reasons for its tax-exempt status, in addition to its breed-registry responsibilities.
The Jockey Club charges $200 to register a Thoroughbred foal, considerably higher than the AQHA’s fee. Its last increase was in 2000, when it was upped from $175. The Jockey Club, which for many years was known as the “New York Jockey Club,” relocated its registration department from New York to Kentucky in 1988.
 Its highest-paid officer is president Alan Marzelli (pictured, left), who earned $672,796 in 2006, 58% more than the AQHA’s top executive. The Jockey Club has three executive vice presidents: James Gagliano, with a salary of $256,885; Daniel Fick, $243,546; and Laura Banllaro, $243,804. IRS Form 990 also lists but does not itemize another $542,776 in 2006 pension plan contributions for those officers. The salaries represented 39.1% of the Jockey Club’s total payroll of $3,626,092 (exclusive of its subsidiaries, each of which have its own executive staff and employees).
The Jockey Club’s 2006 tax return came to light recently when an entity called “CTBA Boardwatch” (which generally concerns itself with the inner workings of the California Thoroughbred Breeders Association) distributed IRS Form 990 to numerous individuals. A number of those people contacted the Paulick Report and were outraged over the salaries paid to Marzelli and his three executive vice presidents.
I don’t know the going rate of executive compensation for a tax-exempt company in New York, where three of the four Jockey Club officers are based (only Dan Fick, a former AQHA executive, is located in the Lexington offices of the Jockey Club). Perhaps those numbers are perfectly in line with other non-profits. I would imagine, though, that the going rate for an executive staff is higher in New York than it would be in Kentucky.
It does seem strange to me that the Jockey Club continues to maintain a nicely appointed office in the high-rent district of midtown Manhattan, on 52nd Street just off Park Avenue. I doubt that it’s gotten many walk-in customers seeking to register their foals since the registration department was moved to Lexington more than 20 years ago. It is conveniently located near the headquarters of Bessemer Trust, the Phipps family-run wealth management firm whose offices are just a few blocks away on Fifth Avenue.
I asked Jockey Club communications officer Bob Curran why the Jockey Club continues to have a New York office 20 years after the organization’s primary function was relocated to Lexington. A few days later I received the following statement from Jockey Club president Marzelli: “Beginning in 1989, when the first of our commercial subsidiaries was incorporated, The Jockey Club has created and developed a group of for-profit subsidiaries and strategic partnerships, each designed to serve specific segments within the industry by utilizing highly efficient, state-of-the-art technology platforms. We have built and managed this growing list of technology-based companies with a corporate office based in New York and operations centers in Lexington, Ky., and Mountain View, Calif.”
That didn’t really answer the question “why a New York office is necessary” although it did tell me something I didn’t know; namely, that the Jockey Club now has a division in California’s high-tech Silicon Valley town of Mountain View.
The bigger question is who is the Jockey Club accountable to. Is it simply Phipps and Farish and their hand-picked stewards? Is the breeders who have paid registration fees over the 100-plus years of its existence? Is the Thoroughbred industry at large? If there is accountability to the industry, why isn’t there more transparency in the operational and financial activities of the Jockey Club and its various subsidiaries? Why is its membership so restrictive and its governance so secretive?
James Gagliano, one of the aforementioned executive vice presidents, touched on some of these questions, during the Jockey Club Round Table in August in which he discussed some of the activities of the Jockey Club and its affiliate for-profit companies. Click here to read Gagliano’s remarks.
Are you satisfied that the Jockey Club is properly and responsibly representing the best interests of the Thoroughbred industry? Let us know in the comment section below, or take the Daily Paulick Poll about the Jockey Club and its activities, located on the left-hand column of the Paulick Report home page.
Copyright © 2008, The Paulick Report
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Tags: Alan Marzelli, american quarter horse association, aqha, bessemer, bessemer trust, billie brewer, billie g. brewer, bloodstock research information services, bob curran, breed registry, bris, california thoroughbred breeders association, ctba, ctba boardwatch, daily racing form, dan fick, Dinny Phipps, equibase, Horse Racing, incompass, james gagliano, Jockey Club, jockey club racing services, jockey club round table, jockey club steward, jockey club survey, jockey club technology services, laura banllaro, Ogden Mills Phipps, Paulick Report, phipps family, quarter horse, Ray Paulick, richard f. broadbent, the jockey club information systems, thoroughbred, Thoroughbred breeding, thoroughbred times, tjc, tjc holdings, tjcis, Will Farish, William S. Farish
Posted in Breeding, Industry Organizations, Jockey Club, daily racing form | 27 Comments »
Monday, December 15th, 2008
By Ray Paulick
Last week’s decision by the Breeders’ Cup board of directors to suspend the program that put $6 million in purse enhancements into stakes races around the country in 2008 has brought an angry outcry from breeders who nominate their foals and stallions to the Breeders’ Cup in part because of the incentive created by that money. Some are saying they feel betrayed by the board and want a refund on their nominations because the decision was announced after the foal nominations deadline. Others are suggesting the move will cause some breeders to stop nominating stallions and foals in the future.
A press release issued late Friday said the stakes program has been suspended for 2009 and other cost-cutting measures have been adopted due to “anticipated losses in nominations revenue because of recent trends in the bloodstock market and decreased revenue related to the worldwide economic downturn.”
Breeders’ Cup president and CEO Greg Avioli told the Paulick Report on Sunday that a $10-million decline in revenues is anticipated: $4 million less in stallion and foal nominations compared with 2008; $3 million less in sponsorship money; and $3 million less in revenue from the two-day world championships, which are scheduled to return to Santa Anita Park in Southern California Nov. 6-7.
Purses for the world championships will remain at their 2008 level of $25.5 million. The board’s vote on the various budget actions at its Dec. 11 meeting was unanimous, Avioli said.
The Breeders’ Cup press release failed to disclose that the non-profit organization has lost approximately $11 million in the stock market this year and that its cash reserves have declined by more than 25%, from $40 million at the beginning of 2008 to less than $30 million today.
Even with those losses, some breeders believe the cash reserves, which many of them view as an “emergency fund” created from their nominations money, should have been used to make up the projected 2009 budget shortfall as an alternative to elimination of the $6 million from the stakes program. Avioli said the board did not want to budget a deficit for 2009 and would not dip into cash reserves to pay operating costs.
“The projections are for us to go from $50 million to $40 million in revenues,” he said. “That’s what the board was faced with, and it was a simple choice for 2009, once they determined we would not operate at a deficit: reduce championship purses or suspend the stakes program.”
To help meet the budget reductions, Avioli said, marketing costs for the “Win and You’re In” Breeders’ Cup Challenge Series have been cut from $6 million to $2 million. “That means no national media this year,” he said, “no inserts in major publications. We eliminated all the mid-year ABC telecasts and we are down to two shows on ESPN in the fall, four and five weeks out from the championships. That saved us $500,000.”
The changes caught many people by surprise, including numerous members of the 48-person Breeders’ Cup board of members and trustees contacted by the Paulick Report. The members and trustees have no specific power other than to elect the 13 members of the Breeders’ Cup board of directors, but some of them feel the smaller operating board should at least consult or poll them on issues as important as the decision to suspend the stakes program.
STAKES PROGRAM A REASON TO NOMINATE
“Nobody called me, nobody said a word to me, and there was no discussion about this,” one member/trustee said. “This stakes program is one of the reasons people nominate. The purse supplements give breeders, especially those outside of Kentucky, an incentive to participate. Without this program, many of them will stop nominating their foals and stallions.”
Another member/trustee who is based outside of Kentucky concurred. “There are a lot of breeders in my state with 40 or 50 foals a year who pick out the 10 best ones and nominate them,” he said, “not because they think they can win one of the big races but because of these smaller Breeders’ Cup stakes around the country. It’s the only reason they nominate.”
Minnesota-based breeder David Miller wrote the Paulick Report, saying: “As a regional breeder who has nominated his foals for the last few years, these supplements were my only chance to realistically recoup the investment. What is my recourse? The money is paid in and after re-reading the nominations terms, it appears the Breeders’ Cup will be making no refunds under any circumstances.”
Avioli disagrees that the stakes program has played a major role in nominations. “We’ve done qualitative and quantitative research and we never got results back that the stakes program was the driving reason people nominated,” he said. “The two reasons that came out in research is the opportunity to have a horse be eligible for the championship days and the perceived increased value at sales for Breeders’ Cup nominated horses. This is not something we took lightly when we removed it, and I can’t tell you it’s not going to be restored in the future.”
Kentucky-based breeder Tom Evans, who operates Trackside Farm, made the following comment about the suspension of the program: “As a breeder who annually contributes funding for the Breeders’ Cup, I would appreciate the financial detail as to why the Breeders’ Cup needs to suspend nearly $6 million in co-funding for 2009 stakes races throughout the country. The catch phrase ‘challenging economic environment’ lacks the detail that supporters of the program deserve. And, since the Breeders’ Cup finds it necessary to suspend funding, what measures have they taken to cut costs in other areas such as corporate overhead and executive compensation?”
Avioli — whose compensation package was $517,965 plus another $248,175 in employee benefits in 2006 (the most recent year the Breeders’ Cup IRS Form 990 is available) – said the organization eliminated five full-time positions in the last year and will cut one additional job by the end of 2008. “Our total (2009) compensation budget is basically flat with 2008,” he said. The Breeders’ Cup 2007 annual report showed $3.6 million spent on personnel costs (2008 figures are not available). It is paying $266,160 in 2008 and 2009 to former CEO D.G. Van Clief Jr. as part of an $890,000 severance package he received when he stepped down in 2006.
WHAT IS THE PURPOSE OF THE CASH RESERVES?
John Sikura, of Hill ‘n’ Dale Farm in Kentucky, a member/trustee who unsuccessfully sought a seat on the operating board earlier this year, has been an outspoken critic of the Breeders’ Cup board’s handling of its cash reserves. Sikura doesn’t understand why the reserves are not being used to cover anticipated shortfalls in 2009 to keep the stakes program intact.
“Those reserves are there for times of emergency,” Sikura said. “This is certainly one of those times. They should have funded the program, at the very least through 2009, because people have made reliances on this stakes program, and to have the rug pulled out from under them is wrong. These programs are not secondary to the racetracks or to the people who own horses.”
Avioli claims the reserves are there to “protect against catastrophic occurrences that would cause cancellation of the championship event” – such as the kind of equine disease outbreak that shut down Australian racing last year or an earthquake or other natural disaster. Business interruption insurance would cover some, but not all, of a catastrophic event, Avioli said.
“Second, like any organization, you have reserves so that you have security that the organization will continue if unforeseen circumstances arise,” he said. “Say this economy stays down for four or five years and nominations don’t come close to former levels. If you don’t have reserves, what are you doing to do? The question is, what’s the level of the reserves that need to be maintained, and that’s a function of the board of directors.”
Some believe the board has built its cash reserve fund as a defense against the possibility of a boycott by stallion farms or syndicates that could grow unhappy with the direction of the Breeders’ Cup and stop nominating.
The cash reserves are overseen by an Investment Committee chaired by G. Watts Humphrey Jr., a board member who for many years served on the Breeders’ Cup Executive Committee with William S. Farish prior to the 2006 changes in governance that brought some semblance of democracy to the organization. Farish’s son, Bill, has served as chairman of the board since 2006.
The other members of the Investment Committee are Antony Beck, Donald Dizney, Ogden Mills “Dinny” Phipps, Joseph Shields, and recent appointee Satish Sanan. As board chairman, Bill Farish is automatically on every Breeders’ Cup committee, Avioli said.
Phipps was voted off the board of directors in 2007 and Shields was voted off the board of members and trustees earlier this year. As chairman, Humphrey is authorized to invite anyone he wants, and he appointed Shields and Phipps to the committee. The cash reserves are entrusted to three or four different financial advisers. Contrary to rumors, Phipps’ Bessemer Trust is not one of the groups handling the Breeders’ Cup cash reserves, according to Avioli.
Critics of the Investment Committee complained that scheduled meetings have been cancelled or postponed this year as the cash reserve fund was battered by market volatility and the global financial crisis that hit in September.”Farish and Humphrey do what they want,” one member/trustee told the Paulick Report.
Another member/trustee said the cash reserves should not be looked upon as an emergency or catastrophic fund if a large percentage of it is invested in the stock market. “That’s a long-term investment strategy,” he said, “so it makes no sense to call it an emergency fund if it’s in equities.”
Avioli defended the board’s handling of the cash reserves, even though the Paulick Report learned that at last week’s board meeting the Investment Committee indicated it was likely going to “get out of the equities.”
“Should the money have ever been invested in the stock market?” Avioli said. “If you say ‘no,’ we wouldn’t have had the $40 million to begin with. If you accept that it was in the market and want to see how it was managed in the last 18 months, I’d say it’s done reasonably well compared with other industries. It’s down from $40 million to $30 million, but given these markets that’s not atrocious.”
“I’ll bet a lot of the members and trustees don’t even know there is an Investment Committee,” one member/trustee said when learning of the $10-million-plus in losses. “It’s all part of the cloak and dagger secrecy that some of the people still engage in, even after we went through this new process of electing the board. People like the guys who run this committee do whatever they want with it. They can make all the bad decisions and they don’t think they have to be held accountable.”
Another commented: “There is an unrecognized aristocracy in the United States, and these guys think they are part of the First Family.”
Sikura is disappointed at the message the Breeders’ Cup board’s decision sends out to the industry. “In times like these, people are looking for some reassurance in the business from some of the industry foundations,” he said. “By taking this action, the Breeders’ Cup board failed to provide that reassurance.”
Do you have an opinion on the Breeders’ Cup board’s decision to not use some of its $30 million in cash reserves to make up a projected budget shortfall and instead eliminate the $6 million in purse supplements to the Breeders’ Cup Stakes Program? Take the Daily Paulick Poll on the left-hand column of the Paulick Report homepage or leave your comments in the space provided below.
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Posted in Breeders' Cup, Industry Organizations | 22 Comments »
Wednesday, December 3rd, 2008
By Ray Paulick
“How do you corral 30,000 horses, having taken them off the range where they lived, and just say ‘night night’?” asked Madeleine Pickens, the animal-loving wife of billionaire T. Boone Pickens and better known in Thoroughbred racing circles as the former Madeleine Paulson, who with her late husband, Allen Paulson, developed one of the most successful Thoroughbred breeding and racing operations of the 1980s and ‘90s. Allen Paulson died in 2000, and she remarried in 2005.
In recent years, Madeleine Pickens has spent sleepless nights agonizing over the plight of the American West’s wild mustangs, which have been rounded up and held in pens in increasing numbers over the last eight years by cowboys hired by the federal government’s Bureau of Land Management after complaints from cattlemen that the horses were depleting grazing areas. As federal funding for the wild horses was squeezed and the number of people interested in adopting them declined, BLM officials were faced with an unpleasant option: allow the horses to be sent to slaughterhouses or perform mass euthanasia.
 The story of these wild horses – “America’s animal” she calls them – hit Madeleine Pickens’ radar screen at a time when she was putting considerable personal resources of time and money into efforts to end the slaughter of all horses. She studied the issue, then hired a polling company to gauge public opinion on the slaughter of horses for human consumption, finding out that seven in 10 Americans oppose the practice. She then paid for anti-slaughter advertisements in the New York Times, lobbied members of Congress and worked with other groups and individuals. Ultimately, however, those efforts ended in frustration because, she said, the pro-slaughter lobby, assisted by the cattle industry, was simply too entrenched with Washington, D.C., powerbrokers. Anti-slaughter bills passed by the U.S House of Representatives were stopped in the Senate. And she was outraged that so many Thoroughbred industry leaders failed to help.
“I would lay in bed, crying, and say, ‘How can we stop this? What can I do?” she told the Paulick Report. “I’m not a religious person, but a spiritual one, and I swear to God that I prayed for an answer.”
One night, she said, the answer came to her. “Why not buy a ranch and give every horse a home?”
Pickens’ plan for a horse sanctuary would be similar to how cattlemen got access to millions of acres of federal land, she said. “This is how the cattlemen got going,” she said. “They got the BLM land attached to their ranches with sweetheart deals. They pay a very low lease for it, and most aren’t even using the land now.”
Pickens has a private foundation in the formative stages, a key to which will be tax credits for donors, she told the Washington Post. She met with Senate Majority Leader Harry Reid of Nevada, where half of the wild horses are held. Pickens isn’t prepared to say how much she needs to raise for an endowment to make the plan work, but she is confident she will be able to make it happen. She envisions corporate sponsors, campgrounds and cabins for tourists to come and observe the horses. “There is so much support for this right now,” she said. “It’s amazing the number of calls and emails I’ve received from people who want to help or go to work there.” (Click here to see the official Madeleine Pickens Web site.)
She estimated that she will need upwards of a million acres, and is currently in negotiations on three different properties. She took her plan to BLM officials, who leaked the story to the Washington Post, prematurely, in her opinion. “The story got out way too early while I’m working on the land deal,” she said. “The land people may suddenly say, ‘Ohhh, deep pockets,’ and become unreasonable. I’m trying to be responsible and do the right thing here. I’m very confident that next year this whole thing will be in place.”
Pickens said she felt like someone who’s been trying to walk through quicksand the last couple of years and can’t seem to get out of it. “Nothing was happening, and you can’t believe the idiocy of it all,” she said. “Why do people not get it?”
She grew weary of trying to work for a solution in Congress. “The people in the racehorse industry weren’t on board and we had all those cattlemen against us,” Pickens said. “We really couldn’t win. I give the people who have been fighting this for so long a lot of credit.
 “I think this will work because I came up with a private-sector solution rather than trying to put a bill through Washington where politicians could have their way and destroy it. When the bureaucrats do it, it costs too much and doesn’t work. With private individuals, you’re not indebted to every group or compromised by lobbyists.”
Her proposal has been widely applauded, within the BLM and the general public. While her husband, a well-known corporate raider, oilman and philanthropist, has been a highly visible proponent for a plan to make America energy independent, Madeleine Pickens became an overnight celebrity because of her desire to save the horses. The week her plan went public, ABC’s World News Tonight named her “Person of the Week.” Some outside of the horse business remembered her as the heroine (pictured, left) who rescued hundreds of abandoned cats and dogs in New Orleans following Hurricane Katrina.
“I knew people cared, but I was somewhat stunned at the way this story took off like a wildfire,” she said. “It surprised me, but it really shouldn’t have."
A PLACE FOR EX-RACEHORSES, TOO
Pickens said the ranch will not just be a refuge for wild horses. She wants it to be all inclusive for different breeds, and especially ex-Thoroughbred racehorses that often end up unwanted or sold to killer-buyers who send them off for slaughter in Canada or Mexico. There are no remaining horse slaughterhouses in the United States.
“We’re going to have enough land where I don’t know how we can say no to anything,” she said. “It won’t happen overnight. But I want to give the Thoroughbred industry an opportunity to do something here, and to make people feel that they are being responsible for the animals in their sport. I’m going to ask the industry for their support. It’s going to be difficult for the racing industry to change their way of thinking. With this, I hope they can say they have an exit strategy for their horses.”
Pickens is still angry over the National Thoroughbred Racing Association’s refusal to support recent anti-slaughter legislation in Congress. She was one of a large number of major industry participants to sign a letter written by owner-breeder Josephine Abercrombie to members of Congress stating their support of anti-slaughter legislation and their disapproval of the NTRA’s position. “The NTRA had to compromise themselves with Goodlatte (Virginia Rep. Bob Goodlatte, former chairman of the House Agriculture Committee and now ranking member), who has helped them with gambling legislation but has close ties to the cattle industry,” she said. “By getting behind my proposal, they won’t have to worry about the threat of someone like Goodlatte.”
The Jockey Club is another group that has disappointed Pickens. “They register 35,000 horses a year and they say those horses are worth millions and millions of dollars,” she said. “And they come up with some plan where people can give a few dollars when they register a foal and the Jockey Club says they’ll match up to $200,000 a year. This is the same old b.s. — $200,000 is a peanut. How dare they say this is all they’re going to put into a retirement fund for all the horses who don’t make it. It’s all part of what makes the system not work.
“In every business it’s leadership, and we’ve had horrible leadership in racing. Will Farish (vice chairman of the Jockey Club and owner of Lane’s End Farm, where Pickens retired Grade I winner Rock Hard Ten to stud) can be a good guy. He’s head of this and head of that, and people look up to him. But here’s a man who won’t go against slaughter. Why? Is it because he’s from Houston, where so many of the cattlemen are from?”
Pickens, who said she has withdrawn from the racing business largely because of its inaction on this issue, said she thinks the Thoroughbred industry can learn a great deal from how her proposal has been embraced by the public.
“Racing people can learn that they have a chance to endear the public to them,” she said. “They get a few gamblers here and there, but they are in trouble because they seem to have lost sight of the animal who is the athlete. They have too many fatalities and too many injuries that happen in public on national television. When that happens, it exposes the fact they have no exit strategy for the horses.
“Again, there is no leadership. Those who have been in it for a long time have done nothing to endear people to the business. Now they have an opportunity like the BLM has to try and resolve one of their problems.”
I asked Pickens why she is doing all this, what is driving her to take on a project so big?
She told me of how she emigrated to the United States from Iraq in 1969 because she wanted “to come to a new world and do something with my new country.”
But then she confessed to another reason, something that haunted her when she first learned about the horrors of slaughter: “Maybe it’s because I’m ashamed that I was in the industry for years and never knew there was a slaughterhouse for so many horses at the end of the day. I’m so ashamed I never knew. And people who know about it and aren’t doing anything, they should be ashamed, too.”
Copyright © 2008, The Paulick Report
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Tags: abc world news tonight, anti-slaughter legislation, blm, bob goodlatte, bureau of land management, harry reid, horse industry, Horse Racing, horse slaughter, Horse Welfare, hurricane katrina, hurricane katrina pet rescue, Jockey Club, Josephine Abercrombie, Lane's End, madeleine paulson, madeleine pickens, National Thoroughbred Racing Association, NTRA, Paulick Report, person of the week, pickens, pickens plan, pro-slaughter, Ray Paulick, rock hard ten, saving wild horses, t. boone pickens, Thoroughbred industry, thoroughbred retirement, wild horse ranch, wild horse refuge, wild horses, wild mustangs, Will Farish, William S. Farish
Posted in Horse Slaughter, Horse Welfare, Jockey Club, National Thoroughbred Racing Association, People | 24 Comments »
Monday, November 24th, 2008
By Ray Paulick
The retirement of reigning Horse of the Year Curlin to Lane’s End Farm may be one of the more unusual stallion contracts with which the Versailles, Ky., farm’s owner, William S. Farish, has been involved. Farish said as much in an interview with the Paulick Report, although he would not go into details of the deal that was announced on Nov. 21.
Farish confirmed that Lane’s End did not purchase any interest in the Smart Strike 4-year-old colt, who will stand for $75,000 live foal as the property of Jess Jackson and the Midnight Cry Stable – at least until Midnight Cry’s 20% ownership interest is resolved in a legal battle that goes back to a 2001 diet-drug class-action settlement. The case revolved around the legal fees charged by plaintiff attorneys William Gallion and Shirley Cunningham, among others. The two men, who raced under the Midnight Cry stable and bought Curlin as a yearling for $57,000 in 2005, lost a $42 million judgment in a civil suit and face retrial on criminal charges of mail fraud after a previous trial ended in a hung jury. A third defendant was acquitted.
A court-ordered receiver has been charged with selling Midnight Cry’s 20% interest in Curlin, but the fair market value of the horse is in dispute. At a recent hearing, bloodstock consultant Ric Waldman estimated Curlin’s total value at $20 million, meaning Midnight Cry’s interest is worth $4 million – the amount Jackson and his wife, Barbara Banke, offered to buy it. Andre Regard, an attorney for Midnight Cry, said the figure is too low.
Because of the legal complications, it’s believed Jackson was unable to convey any breeding rights to Lane’s End, a standard part of most stallion contracts that gives the farm standing a horse a minimum of four to six annual breeding rights. In lieu of those rights, the assumption is that Jackson is paying Lane’s End an annual management fee, in addition to standard marketing and board fees. Unless the management fees are linked to Curlin’s stud fee (i.e., they increase if his stud fee increases), Lane’s End will not enjoy the potential upside it would if the farm owned shares or a percentage of the horse, or if the farm received a specific number of annual breeding rights.
Regard said he has requested a copy of the stallion contract from Jackson but has yet to receive it. He suggested the details of the contract could help establish Curlin’s true value. Regard contends that the $20-million appraised value is too low, based on the multiple of 267 times the initial $75,000 stud fee. Some stallions are valued based on a multiple of 400 (or even as high as 500) times the initial stud fee, Regard said.
Farish admitted the negotiations over Curlin were “difficult” because of the legal challenges. That Jackson and Farish ended up business partners on the horse is viewed by some as ironic, in light of Jackson’s crusade to reform the Thoroughbred auction business and his push to have bloodstock agents licensed. It is widely believed the politically-connected Farish used his clout in Kentucky’s legislative circles to restrict reforms and block the mandated licensing of agents.
Curlin was retired following his fourth-place finish in the Breeders’ Cup Classic, the only time in 16 career starts he finished worse than third. North America’s all-time leading earner, with $10,501,800 won in the United States and Dubai, will make a final public appearance this Saturday at Churchill Downs before joining his sire, Smart Strike, at Lane’s End.
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Tags: andre regard, annual breeding rights, barbara banke, Curlin, fen-phen, jess jackson, Lane's End, midnight cry stable, Ric Waldman, shirley cunningham, smart strike, thoroughbred auction reform, Thoroughbred breeding, thoroughbred stallions, Will Farish, william gallion, William S. Farish
Posted in Breeding, Curlin, Stallions | 1 Comment »
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