The fight for control of the Breeders' Cup began in earnest in January 2006, shortly after the organization's board of directors ratified a change in bylaws that would end its self-perpetuating nature and give anyone who nominates a foal or stallion to the program the opportunity to vote in an annual election.
The battle is ongoing, as witnessed by the 21 candidates seeking 12 positions on the 48-person board of members and trustees. Ballots were recently sent to nominators, who will have the option this year for the first time to vote via a secured web site. Results will be announced in July, after which a meeting of the new board of members and trustees will be held to vote for seven of the 14 positions on the board of directors, the group that makes most of the key operational decisions for the Breeders' Cup.
Until the 2006 change in governance, the Breeders' Cup had been tightly controlled by an executive committee consisting of a handful of Jockey Club members who stockpiled approximately $40 million in cash reserves but made precious few changes or enhancements since the championship event's inaugural running in 1984. Thoroughbred breeders unhappy with the event's status quo and with the Breeders' Cup's expensive alliance with the National Thoroughbred Racing Association saw the change in bylaws as an opportunity to bring in new blood and new ideas to the organization in an effort to stimulate growth and interest. Many from the old guard saw it as a threat to their long-established rule.
It became a classic battle of the new guard vs. the establishment. In some cases it was new money, self-made millionaires, against a wealthy group populated with members of what investment wizard Warren Buffett calls the “lucky sperm club.”
The contrast of the two groups is best exemplified by a pair of New Yorkers who are worlds apart in background but share a passion for Thoroughbred racing: Dinny Phipps and Bobby Flay.
Phipps, chairman of the Jockey Club and born into the wealthiest of old-money New York families, is a current trustee and member of the Breeders' Cup. Until he was voted off the smaller Breeders' Cup board of directors last July, Phipps was considered one of the most powerful figures in racing.
Flay, seeking election for the first time as a Breeders' Cup member and trustee, is a high-school dropout who worked his way up from salad maker at a New York restaurant to become a master chef, restaurateur, television celebrity and highly successful businessman.
Phipps is the leader of the racing establishment's inner circle that has held control over numerous organizations and initiatives. Flay has close ties to Thoroughbred Daily News Publisher Barry Weisbord, one of the industry's most progressive thinkers but considered by some in the establishment as a thorn in the side.
The primary role for members of the large board that Flay seeks to join is to elect individuals to serve on the 14-member board of directors. There has been intense lobbying, politicking and deal-making among people seeking positions on that small board, beginning with the first election in January 2006, when two separate slates of candidates were circulated.
One slate was pushed by WinStar Farm's Bill Casner (also the chairman of the Thoroughbred Owners and Breeders Association) and the other by Lane's End Farm's Bill Farish, the son of Jockey Club vice chairman Will Farish (the younger Farish is the son-in-law of Phipps). Among other things, Casner's group was not happy with the Breeders' Cup operating agreement and relationship with the NTRA and sought more transparency and accountability for the money spent by the Breeders' Cup on administrative expenses. He and his allies also pushed for the 2006 Breeders' Cup championship purses to be increased to $20 million.
The Farish slate was victorious, though not overwhelmingly. Six of the board members were establishment figures who were members of the Jockey Club. Farish was elected board chairman and Robert Clay of Three Chimneys Farm as vice chairman. It was Farish's father who served for many years as chairman of the Breeders' Cup executive committee that made most of the major decisions for the organization.
Nevertheless, enough critics of the status quo were elected to bring about some of the changes Casner sought. In May 2006, the new Breeders' Cup board voted to approve $20 million for that year's championship day purses, and in August the Breeders' Cup terminated its operating agreement with the NTRA. The new board also reached an agreement with longtime executive D.G. Van Clief Jr. to step down as Breeders' Cup president. He was replaced by Greg Avioli, an attorney who previously held key positions at the NTRA.
Lobbying, politicking and deal-making has not been limited to the small-board election. Nominators to the Breeders' Cup program vote for the larger board using a formula of one vote for each $500 they spend on stallion or foal nominations. A farm with $500,000 in annual stud fees gets 1,000 votes, so it quickly became apparent that the largest stallion farms, including Coolmore, Darley, Lane's End, WinStar, Taylor Made, Three Chimneys, and Gainesway had the most power in electing individuals to the large board of members and trustees. Alliances have been formed among some of the farms to support specific candidates.
Sources said a number of the people elected to the large board have not bothered to attend any of the annual meetings, when members of the smaller board are elected. Instead, they send in proxies to a trusted ally.
According to several board members, Bill Farish has controlled more voting proxies than all of the other members and trustees combined. One current board member (not on this year's ballot), who spoke on condition of anonymity, was critical of three of the people running for re-election this year: Joseph Shields, Leverett Miller and Maria Niarchos-Gouaze. “I've never seen either Joe Shields or Leverett Miller at a meeting,” the board member said. “Frankly, I have no idea who they are, what level of investment they have in the game, why they are on the Breeders' Cup board of trustees, or why they are running for re-election. Maria Niarchos (Niarchos-Gouaze) is strictly a proxy vote for Bill Farish. Never, to my knowledge, has she been to one meeting in all the years she's been on the board.”
(For the record, Shields is an investment banker and an owner-breeder who served as co-chairman of the board of the New York Racing Association prior to the federal indictments and bankruptcy proceedings. Miller formerly owned and operated T-Square Stud in Florida, where Shields' horses have been boarded. Niarchos-Gouaze took over her family's Thoroughbred operation after the death of her father, Greek shipping magnate Stavros Niarchos. Her horses are boarded at Lane's End.)
“There is no question that guys like like Lev Miller and Joe Shields are good for votes for the old establishment,” said one of this year's candidates. “It concerns me that the person with the most muscle tries to stack the board to have their philosophy represented. Doing that loses any free-thinking. How much free or creative thinking can there be if there is just one faction combating another faction.
“There was a lot of politicking last time,” he continued. “The way it's heavily weighted, the factions know where they have to go to get the votes – the major stallion farms. In the last election, Bill Farish came to me and said here are the candidates I hope you'll vote for. There's no slate circulating this time, at least to my knowledge, and I haven't heard from Bill. Maybe he thinks he's got it under control and doesn't need any more votes.”
Following last year's election of the members and trustees, there was controversy involving Terry Finley, the head of West Point Thoroughbreds. Finley, previously a member of both the small and large boards, did not receive enough votes in the June 2007 election to remain on the large board. It was expected he would have to resign from the smaller board, since membership on the larger board is a requirement.
During the July 2007 meeting of the members and trustees, however, it was decided that Finley could remain on the small board for the duration of his two-year term, which expires this year. In a press release announcing the 2008 member and trustee candidates, the Breeders' Cup said Finley was running for reelection to the large board—even though he was voted off last year.
Here are the 21 individuals running for the 12 spots on the board of members and trustees:
Helen Alexander–Middlebrook Farm
Doug Cauthen–WinStar Farm
Robert N. Clay–Three Chimneys Farm
Robert Cromartie–Briggs & Cromartie Bloodstock Agency
Bill Farish, Jr.–Lane's End Farm
Terrence P. Finley–West Point Thoroughbreds, Inc.
Bobby Flay —B Flay Thoroughbreds, Inc.
Lucy Young Hamilton–Overbrook Farm
Arnold Kirkpatrick–Kirkpatrick & Co.
Allan G. Lavin, Jr. –Longfield Farm
James McAlpine–McAlpine Thoroughbreds
Leverett S. Miller –T-Square Stud
Maria Niarchos-Gouaze–Poseidon Services Inc.
Charles Nuckols III–Nuckols Farm
Bill Oppenheim–Bloodstock consultant
Don M. Robinson–Winter Quarter Farm
J.V. Shields, Jr. –Shields & Company
Mark Taylor–Taylor Made Farm
Ric Waldman–Overbrook Farm
Charlotte Weber–Live Oak Stud
Barry Weisbord –Media Vista
Editor's note: The original version of this article incorrected stated Leverett Miller owns and operates T-Square Stud in Florida. Miller sold the major portion of that farm in December 2006.
By Ray Paulick
Copyright ©2008, The Paulick Report
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