Battle Over Control of Breeders' Cup Heats Up Before Sunday Vote
by Ray Paulick
Date Posted: 1/7/2006 8:27:31 AM
Last Updated: 1/7/2006 4:24:46 PM

TOBA chairman Bill Casner
Photo: File
The names of 19 Thoroughbred owners and breeders have been submitted and at least one more nomination is expected to be made from the floor when the 48 directors of Breeders' Cup Ltd. meet in Lexington Sunday to vote for a leaner board that will have just 13 members.

When the full board approved governance changes Nov. 4, one stipulation was that there would be no official slate of candidates from a nominating committee. But there is at least one ad hoc slate being circulated among voters, and more than one Breeders' Cup board member told The Blood-Horse the campaign for control of the organization has turned personal and is being fueled with misinformation.

What's at stake is control of the Breeders' Cup World Thoroughbred Championships, the vision of the late John Gaines described as a "crown jewel" by Breeders' Cup president and NTRA commissioner D.G. Van Clief Jr. "There would be very few who would contest the fact it is one of the three most important days in global racing," Van Clief said. "It punctuates the American racing calendar, and it has without a doubt established itself as a major sporting event."

Also hanging in the balance of the board vote is the joint operating agreement between the Breeders' Cup and National Thoroughbred Racing Association, which merged operations in 2000. The operational merger of the two organizations, driven by the late William T. Young, is critical to the future of the NTRA, in part because of the financial support it receives from the Breeders' Cup.

"What we have at our fingertips with this decision to move to a new governance structure," Van Clief said, "is an opportunity to accelerate the process of taking the organization and our event to the next level."

Results of the vote could be announced as early as Sunday afternoon. A chairman will be elected once the new board meets after a period of at least 10 days, and new committees will be formed to replace existing ones.

Bill Casner, co-owner of WinStar Farm and chairman of the Thoroughbred Owners and Breeders Association, is the driving force behind a slate of nominees that some board members fear could result in Van Clief's removal from the Breeders' Cup presidency that he has held since 1996. Van Clief has served in his dual role as NTRA commissioner since September 2004, following the resignation of Tim Smith.

Casner and his backers, including Texas owner-breeder Bill Heiligbrodt, who was named as the TOBA representative on the NTRA board in September, have become increasingly critical of the NTRA and Breeders' Cup management and skeptical of some of the expenditures of the two organizations.

Casner denied he would "clean house" if a majority of his slate of candidates is elected Sunday.

"That is absolutely a false rumor," Casner said Thursday night. "That is not the intention at all."

However, Casner did say he does not think it is appropriate in the long run for Van Clief to hold positions with both the NTRA and Breeders' Cup. "He has to work at the direction of his two boards," Casner said. "There's only so much he can do, and I've told him that I believe you cannot serve two masters. He has done a great job as head of the Breeders' Cup, and I think he has done all that he possibly could -- since he only has so much room to work with."

Though the Breeders' Cup has two representatives on the NTRA board -- Robert Clay and G. Watts Humphrey Jr. -- in addition to Van Clief, Casner said he is frustrated that the Breeders' Cup "doesn't have much control over the NTRA." Casner gives the NTRA high marks for its lobbying efforts in Washington, D.C., and for its leadership in such issues as tote security. "I would hate to think where we would be without the NTRA," Casner said. "But there are some components we should look at, including individual people, and evaluate them. Maybe some of those people haven't had goals set for them. It's a moving target. There's no accountability."

Van Clief strongly disagreed.

"There is as much accountability as any director could ever want," Van Clief said Thursday night when told of Casner's remarks. "We have provided financial reports in abbreviated form, in detailed form, and we have invited directors of the NTRA and Breeders' Cup boards who have questions at any time to call us and visit and go into as much details as they care to have in our financial reports. Anyone who implies that we have not been willing to provide sufficient financial information is simply unknowledgeable."

Many NTRA/Breeders' Cup employees, and all of senior management are given clear goals, Van Clief said. The company's compensation program is based on recommendations of an outside consulting firm that determined senior management compensation be based on industry, corporate, and personal goals that are measurable and reviewed by a compensation committee of the board.

"The fact of the matter is there are very specific goals," said Van Clief. "We are very specifically goal oriented, and we have a consistent eye on return on investment. Any inference that that is not the case is simply inaccurate."

"D.G. has done a damned good job," said John T.L. Jones Jr., the former Walmac Farm owner who was a founding member of the Breeders' Cup board but is not seeking a seat on the new board. "I'm sure Bill Casner is well intentioned, and I'm sure there are some things the Breeders' Cup could have done to make things a little better. We didn't move as quickly on some new ideas as some people would have liked, and I'm guilty of that, too. But I don't think that whatever problems are said to exist aren't the kind that can't be solved with time and reason."

The slate of officers Casner hopes will win election and take control of the new board has developed over several months during private meetings at WinStar Farm. "I have not been invited to the meetings that I believe include members of the Breeders' Cup board and others," Van Clief said.

"It's unfortunate there are dissenting stakeholders who want to throw out management," said one Breeders' Cup board member who has attended some of the meetings but spoke only on the condition of anonymity. "It's becoming personalized, which is unfortunate. They are playing loosely with the facts, and I don't understand the motivation."

Alan Foreman, who represents the Thoroughbred Horseman's Association on the NTRA board, said he is nervous about the outcome of the election. "A lot of what is going on is the Central Kentucky rumor mill," the Maryland-based Foreman said. "These issues are not playing out anywhere else. Quite frankly, it's a problem I thought might happen when the NTRA decided to locate in Lexington. The rumor mill is one reason we felt it was wrong to locate there."

Several board members said disenchantment with the Breeders' Cup rose in April after the full board approved a new stallion nomination fee structure. Under the old system, a stallion's annual nomination fee was equal to his stud fee, but as book sizes increased and the number of commercial stallions declined, revenue also fell. The new Breeders' Cup nomination system collects 1.5 times the stud fee if a stallion has 50-99 foals and two times the fee for 100 foals or more. Stallions with fewer than 50 foals are assessed the equivalent of one stud fee.

"The whole purpose was to increase revenue to bring Breeders' Cup day to $20 million," said Robert Manfuso, who chaired the committee that had representation from numerous stallion farms, including Airdrie Stud, Ashview, Claiborne, Coolmore/Ashford, Lane's End, Mill Ridge, Overbrook, Three Chimneys, and Wintergreen. "We met for over a year, and the committee unanimously approved the new structure. When it went to the full board, it was approved overwhelmingly. The concern became how the money would be spent."

Oddly enough, according to several board members, criticism of the new fee structure came from some individuals who either were committee members or had representatives of their farm serving on the committee that crafted and then unanimously endorsed the new structure.

Some of the unhappiness had to do with the possibility of funds falling into the general budget of the NTRA, which some Breeders' Cup board members believe is controlled by racetracks. "I don't accept that," said Foreman. "That would suggest my role has been minimal, and I don't think that's the case. Clearly, Tom Meeker (representing Churchill Downs) and Jim McAlpine (Magna Entertainment) are strong personalities. Their contributions and concerns at the NTRA board level have not been negative by any stretch. They've been very helpful in everything we are doing. Tom is looking to the future of the industry, trying to position us for the 21st century."

That's what Casner said he is doing, too. "I'm going to do all I can to move the industry forward," he said. "I love it too much. I've been around it since I was 14 years old. I hope it's around for my daughter to enjoy and for her children. As I see it right now, if you don't understand the changing landscape of your business, you are destined for failure. You have to be able to understand what's happening next week, next year. You have to be able to react. I think we would all agree our industry vision has been very, very limited over the years."

Casner didn't deny having a slate that he is promoting to others and a separate list of names he is advocating for a "no" vote. "I guarantee you they've got a slate, too," he said of other board members. "Because I am vocal, because I tend to be outspoken, I've got a huge target on my back. But I'm trying to unite people. I do not believe in division."

Some board members Casner has contacted said they aren't sure what he has in mind for the future if he and his supporters carry a majority of the 13 seats. "He doesn't have a specific plan," said one board member who requested anonymity. "He said he wants to change the direction, but I don't know what direction he wants to go."

John T.L. Jones Jr. offered this thought about Bill Casner's challenge: "It's like what the old Wizard of Hamburg Place, John Madden, said: 'No complaint received unless accompanied by a remedy.'"

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