CDI Fires Back on Jockeys' Guild Contract

CDI Fires Back on Jockeys' Guild Contract
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The general counsel for Churchill Downs Inc. has issued a lengthy defense of the racetrack operating company’s decision to not renew a contract with the Jockeys’ Guild, of which most prominent North American jockeys are members.

In the statement, Alan K. Tse, executive vice president and general counsel for CDI, said CDI believes the guild has violated the terms of the agreement under which the tracks have been making payments to the guild that total $330,000 annually.

Earlier this year, CDI said it is dropping its share of the annual contribution to the riders’ insurance fund. CDI operates four tracks—the flagship Churchill Downs in Kentucky, Calder Casino & Race Course in Florida, Illinois’ Arlington Park, and Fair Grounds Race Course & Slots in Louisiana. The contract expires at the end of 2011.

Two other major racetrack operators—The Stronach Group and New York Racing Association—have renewed their guild contracts.

The guild has undertaken an aggressive campaign to try to convince CDI to change its mind. On Nov. 14 the Jockeys’ Guild presented a petition signed by 240 members to CDI’s board of directors in an effort to persuade the company to renew the contract.

In his statement, Tse said CDI did not want to engage in a public relations battle with the guild, but added “we didn’t start this one, and we’ve had enough. CDI will no longer be used as a scapegoat for the Guild’s financial difficulties and management challenges. It’s time to turn the focus of this discussion to where it belongs—the Guild’s management team, the real motives behind its recent actions, and whether the Guild has kept its promises to both jockeys and racetracks.”

Terry Meyocks, national general manager for the guild, said late Dec. 6 the organization is working on a response to Tse's statement and will issue it Dec. 7.

During its meeting at Hollywood Park Nov. 17, the California Horse Racing Board, acting in response to a complaint from an attorney for the jockeys, deferred until Dec. 15 renewal of an application by TwinSpires.com to continue operating in the state.

TwinSpires.com is owned by CDI. But the CHRB also withheld two-year license extensions for the two other advance deposit wagering companies in the state, TVG and XpressBet.com, though CHRB chairman Keith Brackpool made it clear the board’s objection was over CDI’s decision.

Here is the text of Tse’s statement, “The Truth about the Jockeys’ Guild and Churchill Downs Incorporated:"

“Thoroughbred jockeys have one of the most dangerous jobs in sports. Churchill Downs Incorporated understands that, and we are committed to protecting the health and welfare of jockeys that race at our tracks in Kentucky, Florida, Illinois and Louisiana.

The Jockeys’ Guild, a trade organization that represents jockeys, has been saying lots of derogatory things about CDI in the media lately. We have remained silent. But it’s now time the truth be heard about the relationship between the Jockeys’ Guild and CDI, and what’s transpired over the last few months. First, consider what CDI does to help jockeys and the significant costs behind that commitment.

In 2007, the Guild was in financial trouble and declared bankruptcy. A few racing companies like CDI had already stepped in and secured $1 million (per accident) on-track medical insurance for jockeys after the Guild, under former national manager Wayne Gertmenian, mismanaged funds, cancelled jockeys’ health care insurance, and failed to inform them of that decision. CDI paid for jockeys’ on-track injury insurance even though we have no obligation to do so.

CDI doesn’t employ jockeys. Jockeys are self employed. Horse owners and trainers hire jockeys to ride their horses and pay jockeys mount fees and a percentage of purse monies won. Jockeys choose for whom and at what tracks they will ride. In exchange for that freedom, jockeys bear the responsibility for the cost of their own benefits—things like health insurance, life and disability insurance, and retirement plans. This is true for virtually all self-employed people in the country.

Even though CDI does not employ jockeys, we have been willing to take significant responsibility for caring for them when they ride at our four tracks. We spend more than $2.5 million every year to pay for on-track injury insurance; for health, safety and welfare programs; and for charitable donations benefiting current and retired jockeys. CDI’s commitment to jockey welfare has become an industry best practice through the NTRA Safety & Integrity Alliance’s racetrack accreditation program. CDI’s tracks constitute four of only 12 racetracks nationwide that have completed NTRA re-accreditation so far this year.

In addition to the $2.5 million per year, CDI has helped fund the Guild’s operations by making voluntary contributions to the Guild. Many racetracks that helped fund the Guild through similar agreements stopped doing so in 2005 after the Gertmenian scandal raised questions about how all racetracks’ contributions had been spent. So in 2007, with the Guild facing bankruptcy, CDI agreed to make voluntary contributions of approximately $330,000 per year to the Guild for four years. We entered into that agreement with the understanding that Guild management would get its financial house in order, and in the agreement, we required that the Guild guarantee the following:

1. That all funds voluntarily paid by CDI were used “for the actual and direct benefit of jockeys;” and
2. That CDI racetracks “shall pay no more than the amount paid by any other racetrack to the Guild.”

We believe the Guild has breached these contract terms. We’ve asked the Guild to explain how it spends the money we contribute, including what direct benefits it purchases for jockeys and the actual cost of those benefits. And we’ve asked for data to confirm that we have not been paying more than any other track. We have received no answers. 

We will not renew an agreement with the Guild under these terms and have told them so. Contrary to their claims, we will resume talking with Guild management, provided they answer our very legitimate questions. But rather than engage in honest dialog about these issues, the Guild’s current national manager Terry Meyocks chooses to disparage our company with false and misleading statements and intentionally interferes with our business operations and licensing processes in multiple states. 

There are additional, important questions to ask Mr. Meyocks: Why are 50 of the 81 U.S. racetracks operating live meets this year not paying anything to the Guild? Of those who do contribute, how much are they paying? Why, after all CDI has done for the Guild, does Mr. Meyocks choose to attack us when we all know that most tracks pay nothing to the Guild, and we are not aware of any racing company that has paid more than CDI. And, finally, the key question: why should racetracks be responsible for these costs when jockeys are independent contractors that racetracks don’t employ?

We don’t see the sense in waging a public relations war with the Guild, but we didn’t start this one, and we’ve had enough. CDI will no longer be used as a scapegoat for the Guild’s financial difficulties and management challenges. It’s time to turn the focus of this discussion to where it belongs—the Guild’s management team, the real motives behind its recent actions, and whether the Guild has kept its promises to both jockeys and racetracks.”

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