KHRC Panel Puts Finishing Touches on Ad Regs

Kentucky Horse Racing Commission will consider regulations at June 8 meeting.

A proposal that would put in place stiffer regulations relating to jockey sponsorship has been adopted by the Kentucky Horse Racing Commission’s rules committee and will be presented to the full regulatory body for consideration June 8.

Chief among the changes from the current regulations under the new proposal, which were adopted during a lengthy meeting June 3, are disclosure of the financial arrangements of the advertising deals, a deadline under which agreements on jockey sponsorships must be completed, and forms that all parties must sign.

The rules committee, chaired by attorney Ned Bonnie, has been considering the changes for years, ostensibly as a result of the annual controversy that surrounds advertising on the pants worn by riders in the Kentucky Derby Presented by Yum! Brands (gr. I). While the regulations will apply to all jockey advertising throughout the year at all licensed tracks in the state, the Derby and other major stakes generally attract the greatest interest from advertisers.

Current regulations in Kentucky set out guidelines under which the advertising can appear on the pants. The regulations outline the size and type of advertisements and logos that are permitted and stipulate that the owners of the horses on which the jockeys will be wearing the advertisements must grant their approval. There is no requirement that the amount of money involved in the sponsorship or where it goes must be reported.

Each year, once the Derby field has been determined during the post position draw before the Saturday race, there is a flurry of activity to obtain the owners’ written consent for the ads. While there is a standardized commission form the parties in the agreement must sign stating that the ads comply with the regulations, there are separate agreements that also must be signed designating how money from the ads will be allocated.

The Guild forms and similar forms presented to owners by the Kentucky Thoroughbred Association provide for the allocation and division of the advertising revenue.

The competing interests representing by the different forms usually involve how much money goes to the owner, the jockey, and/or to a charity so designated by the party to the agreement. Over the years, owners and representatives of the KTA and Thoroughbred Owners and Breeders Association have complained about the confusion associated with the jockey advertising and pressure placed on owners so close to a major race. The KTA and TOBA have also pushed to have the commission stipulate that most of the money go to the owner and/or a charity, with a smaller amount to the riders.

"It is an embarrassment to racing during it’s most famous race to have this going on," Bonnie said of the controversy.

The rules committee consists of Bonnie, attorney and horse owner Burr Travis, and attorney and horse owner Tom Conway. Conway did not attend the June 3 meeting because he was in New York, where Stately Victor, whom he owns in partnership with son Jack Conway, will compete in the June 5 Belmont Stakes (gr. I).

Under the new proposed regulations, two forms will be used by all parties to a jockey sponsorship agreement and they must be completed by 5 p.m. two days prior to the day of the race in which the ad is to be worn.

"The party presenting the advertising or promotional opportunity to the owner and jockey...shall disclose in writing all material terms, including financial, regarding the advertising or promotional opportunity to the owner, jockey, and the commission," the proposal states in reference to the "Owner/Jockey Advertising or Promotional Materials Agreement." 

The proposal also includes a breakdown of how the ad revenues are to be divided. "No other form of agreement or contract shall be used," it states.

The other form, labeled the "Request to Wear Advertising and Promotional Material," must be signed by the jockey and owner (or their authorized agent), the stewards, and authorized representative of the racing association where the race will take place.

Prior to the June 3 meeting, the rules committee had solicited input from representatives of the Jockeys’ Guild, KTA, TOBA, Churchill Downs, and Kentucky Horsemen’s Benevolent and Protective Association.

Representatives of the Jockeys’ Guild, Churchill Downs, and TOBA questioned whether the financial provisions of the jockey sponsorship agreement should be required to be submitted to the commission. They noted that if the commission has that information in its records, it could be obtained under open records requests and have an impact on the ability to negotiate future contracts.

Lisa Underwood, KHRC executive director, said the proprietary nature of the information could be protected by redacting some of it once an open records request is made.

This year, 19 Kentucky Derby riders were sponsored by Chrysler on behalf of its Dodge Ram truck line. They wore the logo on their pants in an advertising deal, worth a total $300,000, presented to them by Churchill Downs and coordinated by the Jockeys’ Guild.

Jockey Julien Leparoux was the lone Derby rider that did not wear the Dodge logo on his pants. Tom Ludt of Vinery, co-owner of Awesome Act, refused to sign the contract presented by the Guild but signed a form presented by the Kentucky Horse Racing Commission that was not approved by the Guild. Ludt is also a member of the KHRC and complained about the process during the May commission meeting.