Who's Running The Guild?
by Eric Mitchell
Date Posted: 7/11/2001 4:59:17 PM
Last Updated: 7/16/2001 4:24:34 PM

Jerry Bailey, second Hall of Fame jockey to resign as officer of The Jockeys' Guild.
Turmoil over who is running the Jockeys' Guild has caused three of the organization's officers--including its president--to resign in the past month.

President Pat Day, past president Jerry Bailey, and treasurer Anthony Black resigned from the Guild's executive committee and board of directors because they believe the hiring of Matrix Capital Associates to manage the organization was handled inappropriately.

Day resigned June 21 but declined to fully explain why he was leaving. He would only attribute his decision to "philosophical differences."

Bailey and Black, however, were more forthcoming. They said a five-member majority of the Guild's executive committee acted too hastily in hiring the California-based management consulting company. Bailey did not support the decision because Matrix Capital refused to provide any references. Guild committee members hired Matrix Capital on the assurances of Chris McCarron, who apparently has a close relationship with the company's leader, Pepperdine University professor L. Wayne Gertmenian.

"Chris told me that if I knew Gertmenian as well as he did, then I would be assured that he was the best one for the job," Bailey said. "But I don't know him as well as Chris."

Bailey asked Gertmenian about his qualifications and references and was told they were confidential. He said McCarron has been no help in providing the information, either.

"It was a very simple and routine request from a board member for information about a company," he said. "I have been met with a stone wall."

At the same time Matrix was hired, the executive committee fired the Guild's six staff members in the Lexington, Ky., office and fired six regional managers (two managers have since been rehired to help with the transition of management). McCarron drafted the resolution that called for Matrix to be hired and the staff to be fired. The resolution was signed by McCarron, Tomey Swan (who is acting Guild president), Dean Kutz, Robert Colton, and Mike McCarthy.

Bailey said he explained in a resignation letter, mailed to the executive committee's nine members earlier this week, that he cannot do the job he was elected to do when major decisions like hiring Matrix Capital are made with so little information.

"I cannot defend these decisions to the membership," he said. "To continue on in that fashion would be a futility."

McCarron could not be reached for comment. His agent, Scott McClellan, said McCarron has been swamped with phone calls from jockeys about health insurance, Guild officers about Matrix Capital, and the media about both.

"Every minute he is not on horseback, he is on the phone," McClellan said. "He is not trying to slight anybody. He's just overwhelmed."

Attempts to reach Gertmenian in Moscow were unsuccessful, and Thomas Brondum, who is managing the Guild's office, declined comment.

Problems at the Jockeys' Guild began April 1 when the members' health insurance policy expired. The policy could not be maintained because the 2001 premium soared 43%. Historically, the Guild had not faced an increase more than about 12% and the former management had anticipated a worst-case scenario of 20%.

"The increase made it impossible for the haves to pay for the have-nots," Bailey said. On March 6, the executive committee voted to let the health insurance lapse.

Jockeys receive up to $100,000 in coverage for work-related injuries from racetracks in 34 states. In California, Maryland, New Jersey, and New York, workers compensation provides coverage and the racetracks offer catastrophic health insurance in lieu of medical insurance. For most the nation, however, jockeys and their families now lack any health insurance protection.

Swan said she believes Matrix Capital can restore the insurance coverage.

"I'm really happy with giving Matrix Capital a chance to achieve what we need to do," she said. "I've looked at the stuff from Dr. Gertmenian and talked to his staff. The credentials of the people he has look impressive, and the stuff I've heard from Dr. Gertmenian is pretty impressive. Besides, they are an interim company. If we're not happy with it, we can change it."

In June, former Guild national manager John Giovanni announced he would not seek another term. Some executive committee members felt Giovanni's departure provided a good time to put in a management team with more skills at negotiating things like insurance contracts.

"We thought the sooner we could get a temporary group in there the smoother the transition would be," Bailey said. "The way the takeover was orchestrated, however, it was impossible."

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