Maryland in Turmoil Over Plan to Slash Dates
Updated: Friday, September 16, 2005 6:01 PM
by Sandra McKee
Posted: Thursday, September 15, 2005 11:17 AM
Maryland Jockey Club president and chief executive Joe De Francis created the picture of a locomotive bearing down on Maryland in the form of Pennsylvania slot machines as he encouraged the Maryland Racing Commission to accept a plan from Magna Entertainment Corp to cut live racing dates from 220 to 112 in 2006.
The idea behind the cut is, De Francis said, to increase purse money from a daily offering of $193,877 to $303,571 in order to make it competitive with surrounding states. For many of the horsemen and breeders in the crowd at the Sept. 13 racing commission meeting, the image was apt but not the one De Francis had in mind.
"There's a locomotive coming," said Wayne Wright, executive secretary of the Maryland Thoroughbred Horseman's Association. "But it's Magna that's driving the train, and our horsemen and breeders are tied to the tracks."
It was a day of imploring testimony as Maryland horsemen made their plea to the commission in an effort to stop MEC from implementing a plan that would scrap live racing for five months from Preakness Stakes (gr. I) day to Nov. 3, close the barns for four months a year, and eventually sell the Bowie Training Center and its land for development.
After hearing nearly 90 minutes of arguments--most of which described the plan as one designed to chase horsemen from the state and kill breeding farms--the commission voted to defer a decision on the proposal until its next meeting, scheduled for Oct. 6.
"People need to be talked to and to talk to each other," commission chairman Tom McDonough said. "I'd also suggest it would be nice if everyone here would talk to (House Speaker Michael Busch) about the problem...It behooves everyone to do some talking."
Busch has been the Maryland General Assembly's chief opponent to legalizing slot machines in order to boost horse racing. However, he and others said they are working on legislation that would include purse subsidies and other measures to help the industry.
After the meeting, commissioner Alvin Akman said: "I think it is highly unlikely the Magna proposal will pass as is. I hope there are still areas to explore on both sides. But we still have to look to Annapolis to help find other solutions."
Maryland THA attorney Alan Foreman pointed out horsemen already have an operating agreement with the tracks that was assumed by MEC when it bought controlling interest in Laurel Park and Pimlico Race Course three years ago. Foreman said the agreement between the Maryland THA and management requires MEC to run five days of live racing each week through Belmont Stakes (gr. I) day in June 2006.
Though the commission said nothing at the time, a day later McDonough disputed part of the Maryland THA testimony.
"Alan misspoke," McDonough said. "The agreement says up to five days. As I read it, that means Magna can fulfill its obligation by running as few as one day a week. It's a matter of interpretation. What I think Alan was talking about was the intent of the parties at the time the agreement was made."
The agreement was forged in 2002 during another difficult time for Maryland racing, when the Maryland Jockey Club was proposing to move Colonial Downs racing dates from September to June and July and shut down Maryland racing to accommodate that move.
During the commission meeting, Foreman said MEC's plan was asking "Maryland horsemen and breeders to pay for all of Magna's (business) failures, not only in Maryland but everywhere else. And they have been emboldened to do it here because they believe they have a compliant racing commission that will rubber stamp their plans."
It was a comment commissioner Akman later called insulting. "Magna has not had an easy time with this board...and if it was true, (Magna) would have done this long ago."
In follow-up comments Sept. 14, Foreman stood by his statements.
"In the first place, the chairman shouldn't be weighing in," Foreman said. "He wasn't in the room when this document was drawn up. But every year since it was agreed to, the tracks have raced five days a week, which speaks to the intent...Tom is arguing Magna's case, saying they can run (less than) five days and be in compliance. We read it as saying not less than five without permission.
"It's very technical, but I think it is an argument over nothing. There are more important issues out there. But we know what was discussed and what was intended when we made the agreement. And what can't be debated is that Magna is proposing stopping racing here on Preakness day, and the agreement says racing must run through Belmont day 2006. That's three weeks out of the calendar. You can't argue with that fact."
Foreman said the Maryland THA has recourse should MEC advance its plan without the horsemen's approval.
"We can ask the commission to enforce the agreement," he said. "We can go to court and ask our rights be upheld. And, it is also true that we control simulcasting. When two-thirds or more of your business is simulcasting, it is a significant penalty. It is in the best interest of the tracks to have an agreement with us."
Though MEC can operate without an agreement with the horsemen, it can't conduct racing without the approval of the racing commission.
"They have to get approval to run anything," McDonough said. "But we have flexibility. We could approve a partial schedule. Though the horsemen have reservations, I don't think there would be much objection to the racing schedule proposed through the spring."
Among the issues the horsemen and breeders are most concerned about are:
-- The impact the curtailing of racing through the summer months would have on horsemen, who would have to find other places to stable their horses and other tracks at which to race.
-- The impact the situation would have on the breeding farms. Cricket Goodall, the executive director of the Maryland Horse Breeders Association, told the commission: "We have different concerns from the horsemen, but our fates our intertwined. The results of what they do will have long-term impact on the breeders.
" If (the plan) is passed, it will have an immediate (negative) impact of about $1 million. The breed fund will decline and the demand to breed here will decline. The farms will be sold and they won't be back."
-- And what is viewed as the untenable situation facing backstretch workers and support businesses that supply services to the tracks, such as blacksmiths and feed farms. "There is a category five hurricane about to hit the backstretch if this passes," horseman Phil Capuano said.
At the Sept. 13 meeting, commissioner Terry Saxon chided MEC for changing its management representatives--at least five different individuals in the last three years. Frequent changes, he said, make it difficult for the Maryland horse industry to develop working relationships. And, he chided horsemen and breeders for their continued attacks on Busch.
"Every time I read something, someone is kicking him in the knee," Saxon said. "There is plenty of room for finger-pointing to go around. Now, maybe we can get together as a group and go talk to someone about something."
Said Akman: "I know everyone is quick to say it isn't Annapolis' problem. But all the other states around us have found their solutions from their legislatures. It's the landscape we're in and we have to compete on the same basis. In absence of real help from Annapolis, we can't compete."
De Francis said the MEC plan is "our best effort" to keep Maryland racing viable.
"This is a business plan," De Francis said. "It is not a negotiable document...Churchill Downs has sold Hollywood Park to a real estate developer. In two years, if there are no slots in California, it will be closed down and developed. And if there were anyone other than (MEC chairman) Frank Stronach running a public company, he would act with a cold heart and do the same thing here. But that's not what we're doing."
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