Meeting Set Between Meeker, NTRA Defectors

A meeting has been scheduled for Nov. 9 between Churchill Downs president Tom Meeker and representatives of 22 racetracks that have or will defect from the National Thoroughbred Racing Association as of Dec. 31. The 22 member tracks account for almost $2.5 million in annual NTRA dues.

Penn National Gaming president Bill Bork, who represents the Mid-Atlantic tracks on the NTRA board of directors, said he will attend the meeting in Kentucky, along with Magna Entertainment representatives Mark Feldman and Jack Liebau, Philadelphia Park chief executive officer Hal Handel, Maryland Jockey Club president Joe De Francis, and Bruce Garland, senior executive vice president for the New Jersey Sports and Exposition Authority. Tom Meeker, president of Churchill Downs Inc. and an NTRA board member, will represent the NTRA.

The meeting in Kentucky will coincide with the NTRA Western Conference on Racing, and the day before membership commitments for 2001 are due. Meeker apparently has taken the lead in an attempt to bring the defectors back on board.

The Mid-Atlantic racetracks that have left the fold are Laurel Park, Pimlico Race Course, and Timonium in Maryland; Atlantic City, Garden State Park, Meadowlands, and Monmouth Park in New Jersey; Penn National Race Course and Philadelphia Park in Pennsylvania; Delaware Park; Colonial Downs in Virginia; and Charles Town Races in West Virginia.
The Magna-owned tracks that have defected are Bay Meadows Race Course, Golden Gate Fields, and Santa Anita Park in California; Gulfstream Park in Florida; Great Lakes Downs in Michigan; Remington Park in Oklahoma; and Thistledown in Ohio.

In addition, Fair Grounds in Louisiana, Hawthorne Race Course in Illinois, and Oaklawn Park in Arkansas have bowed out.

The Mid-Atlantic racing associations -- in particular Penn National Gaming and Philadelphia Park parent company Greenwood Racing, both of which operate successful telephone account-wagering services -- have taken issue with the NTRA's partnership with TVG. Aside from TVG's mandate for exclusive contracts, Mid-Atlantic officials oppose the NTRA's operation of a wagering hub on behalf of TVG.

Handel, the Philadelphia Park executive who has called the relationship between the NTRA, Breeders' Cup, and TVG "incestuous," said whether his track and the other 21 rejoin will depend on the response from the NTRA.
"I can only speak for Philadelphia Park," he said, "but the NTRA should take what happened as a serious call for reform. If meaningful efforts -- not cosmetic -- are taken, I think they'll find all the tracks have an open mind for coming back in."

Charles Cella, owner of Oaklawn, said his track didn't renew its membership after April 30 of this year, and would "take a long, hard look" at renewing only if the NTRA puts the focus on marketing. He also said the NTRA now has access to financial resources through its consolidation with Breeders' Cup, and therefore "doesn't need our financial support.

"In Arkansas, we have to use all available resources to attract patrons to come to Oaklawn Park," Cella said. "The NTRA wasn't doing that for us."

De Francis, who heads the independent advisory committee, acknowledged that substantial progress had been made in discussions between himself and the NTRA. Either by design or coincidence, things had changed in the past month: the proposed deal with IBM Global Services was scaled back, reportedly because of a lack of industry funding; horsemen's dues were reduced to put them on par with those of their racetrack partners; and the NTRA floated a plan to "regionalize" TVG and thus open it up to the industry.

De Francis said if the NTRA chooses to pursue partnerships with entities that compete with its members, there must be "substantive reforms relative to governance and rights of members."

Frank Stronach, the Magna chairman, called for NTRA reform last November and was at least partly responsible for NTRA's decision to expand its board of directors from 11 members to 15. But he, too, stated his displeasure with having to pay dues to an organization that competes with his company.

Magna may have more to lose than the other defectors because Gulfstream and Santa Anita host major races for 3-year-olds and older horses that are regularly broadcast on national television. (The NTRA negotiates TV contracts). In addition, the Breeders' Cup adopted a policy -- and said it will stand by it -- whereby only NTRA-member tracks can host the annual championship. Gulfstream and Santa Anita have hosted the Breeders' Cup in the past.

The case of Santa Anita is complicated by the fact the Oak Tree Racing Association, a founding member and strong supporter of the NTRA, holds its fall meet at the Arcadia, Calif., racetrack. It could request to move its meet to another NTRA-member racetrack in California.

Smith met with Magna officials in Las Vegas, Nev., Oct. 19 in an effort to convince them to remain in the fold. Stronach, who is said to have made the decision to pull his tracks out, is out of the country and couldn't be reached for comment. In fact, he wasn't in attendance at Santa Anita Oct. 28 for the California Cup, the biggest race day of the Oak Tree meet.

Any mass defection of racetracks would put horsemen's associations in an awkward spot. Though racetracks benefit directly from the NTRA's cooperative advertising program, horsemen hope a projected bump in purses materializes at tracks at which they race.

The NTRA in early October announced it had equalized dues paid by racetracks and their partner horsemen's associations. This summer, the National Horsemen's Benevolent and Protective Association claimed the previous formula wasn't equitable given the immediate return to member racetracks.

The big question is whether it would be worth it for horsemen to remain members if their racetrack partners drop out. With few exceptions, horsemen's associations have been solid NTRA supporters.

Alan Foreman, an NTRA board member and chief executive officer of the Thoroughbred Horsemen's Association, and Bill Walmsley, the National HBPA spokesman who also is on the NTRA board, heralded their support of the NTRA but indicated it could be difficult to keep horsemen on board should their racetrack partners not participate.

"It's very difficult to have a fractured organization," Foreman said.
Horsemen and racetracks contributed an equivalent amount of handle-based fees (a projected $14.6 million for 2001).

"Part of the problem -- maybe it's an inherent flaw of the NTRA -- is it was formed on the basis that in four years it would become self-sufficient," Foreman said. "The pressure has been on Tim Smith from the get-go to come up with programs to fund it. The resulting firefights have forced us away from what we were supposed to be focusing on."

Part of that stems from the fact that a projected $10 million in interactive wagering revenue from TVG hasn't materialized.

Bork, when asked if there is a push to remove Smith as chairman and chief executive officer, said: "There are a couple of members who feel that way, but I don't think there's much support for that from the 22 tracks that left."

Smith wouldn't comment. NTRA vice president of communications Chip Tuttle, speaking on Smith's behalf, said: "Any time you have emotion running high in any sort of business discussion, it can get a little heated, but that's not the case," Tuttle said. "(Smith's leadership) is not an issue."

Tuttle said the NTRA would have no further comment on the issue until after the Nov. 4 Breeders' Cup at Churchill. He did say the organization still has a solid nucleus and will proceed with its programs and services.