Are Calder Agreements in Jeopardy?
By Jim Freer and Ryan Conley
On July 7, Calder parent CDI and the Florida HPBA signed a 2008 purse contract for Calder and a contract on future slots revenue at the Miami Gardens, Fla., track. But according to CDI filings with the Securities and Exchange Commission, each agreement has provisions that could permit either party to terminate it if the FTBOA did not reach agreement by a specified date on its portion of Calder slot revenues.
The original deadline was Aug. 6. On July 31, CDI and the Florida HBPA agreed to extend the deadline to until Aug. 31.
Talks among the parties continued through the Sept. 6-7 weekend. On Sept. 8, officials of CDI, the Florida HBPA, and the FTBOA would not disclose details. But Kent Stirling, executive director of the Florida HPBA, said “there are rumors that the talks are not going well.”
Richard Hancock, executive vice president of the FTBOA, declined to comment on the situation.
“I will not deal with rumors that are out there,” Hancock said. “Feel free to call me when you have heard something directly from Kent Stirling, (Florida HBPA president) Sam Gordon, or (CDI executive vice president) Steve Sexton.”
Kevin Flanery, a spokesman for CDI, told The Blood-Horse Sept. 8 that while the company hoped to “get a deal done,” and would announce such an agreement when completed, it would not comment on ongoing negotiations.
CDI has said it plans to build a casino with Class III Las Vegas-style slot machines. But it has not announced a date for start of construction or many other details, other than to indicate it would like to have the facility open in the second half of 2009.
Florida law on pari-mutuel casinos permits Gulfstream Park, which opened a casino in 2006, and Calder to obtain a casino license only after reaching agreements on revenue with the FTBOA and Florida HBPA. In its July 7 announcement, CDI said the Calder slots agreement guarantees the Florida HBPA and the FTBOA $14.375 million for purses in the combined first three full years of any slots operation at Calder.
The horsemen’s groups are guaranteed 6.75% of slots revenue for the remainder of a 10-year term. Additional provisions provide for the horsemen to share in the upside should a Calder slots facility generate specified but undisclosed revenue minimums in the second and third full years of operations.
CDI’s talks with the FTBOA include determining the percentage of revenue that would go directly to that group. The FTBOA and Florida HBPA reportedly do not have major disagreements on that split of revenue.
The latest talks are part of a series of 2008 financial disputes at Calder. The track opened its meet April 21 without a purse contract. In negotiations, the Florida HPBA declined to sign a purse contract without also signing a contract on future slots revenue.
The Florida HPBA used authority under the Interstate Horseracing Act to prevent Calder from sending its signal to racetracks outside Florida. Horsemen’s groups in eight other states barred tracks from sending signals to Calder. The horsemen’s groups in Florida and other states ended those blackouts July 7.
But CDI and the Florida HBPA, which is using the national Thoroughbred Horsemen’s Group as a brokering agent, have not reached a 2008 agreement for Calder with most advance deposit wagering companies.
Amid the signal blackouts, Calder announced April 22 a 30% cut in average daily overnight purses and on May 9 announced cuts in purses for some stakes. On July 7, Calder returned average overnight purses to about $180,000. It also returned all stakes purses to at least $55,000 -- the minimum for “black type” in stallion registries for horses finishing first, second, or third.
CDI does not provide handle numbers except in quarterly financial filings with the SEC. Through the first six months of 2008, Calder’s handle as reported by CDI was down 35% from a comparable period in 2007, while handle in the second quarter, which incorporated April 1-June 30, declined 47%. Calder’s live meet began Apr. 21.
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