LAUREL – Frustrated by the lack of agreement on proposed cutbacks to live racing, Maryland’s Racing Commission on Tuesday gave the state’s track owners, horsemen and breeders just 22 days to either come up with a plan of their own or accept a solution imposed by the commission.
“I think you guys have fumbled the ball, dropped the ball,” Commissioner Terry H. Saxon told representatives of the industry. “Either you’re going to agree right now to come up with something by the first (of December) or I’m going to have to” move for the commission to develop its own solution.
Saxon issued his ultimatum at a the monthly meeting of the commission, which had asked the owners, horsemen and breeders in September to come to an agreement on a plan for live racing. Magna Entertainment Corp., owner of Pimlico and Laurel, had proposed sharply cutting back the number of racing days at the two tracks as well as selling Bowie training center.
But the October meeting did not produce an agreement satisfactory to all parties, and at Tuesday’s meeting at Laurel, commission members did little to hide their irritation.
Commissioner John B. Franzone, who sat in on the last meeting between the Maryland Thoroughbred Horsemen’s Association (MTHA) and Magna Entertainment Corp., said he saw little progress.
“They were nowhere,” he said. “There’s so many fundamental disagreements…(and) when you lump them all together, you can see they’re not even out of the starting gate.”
Those fundamental disagreements include the number of live racing days at Laurel and Pimlico. But recently, a new issue emerged in the negotiation: money Magna says the horsemen owe it for their share of costs in operating simulcast wagering at Laurel and Pimlico. Though the two issues are seemingly unrelated, Magna believes they are due as much as $2.5 million and surprised the horsemen by tying the issues together last week.
“This was supposed to be an agreement regarding the racing schedule for 2006,” Alan M. Foreman, the horsemen’s counsel, said in an interview. “We were surprised when the track sought an agreement on expense contributions,” especially since he said the two groups have essentially agreed on 180 days of live racing, a large increase over the original Magna proposal to cut from 198 to 112 days.
But the commission clearly did not want to hear any excuses and gave all parties just three weeks to come to an agreement.
“We want to see this thing reach an accord on a voluntary business basis,” said John P. McDaniel, the commission’s chairman, but if the parties involved are unable to do so, “It’s clear the commission will step in.”
Lou Raffetto, chief operating officer for Magna’s Maryland tracks, said he felt progress had been made and was optimistic they could meet the commission’s deadline.
“I think we’re big boys and we should do it on our own,” he said.
Foreman agreed. “My sense was that we were going to be able to negotiate a final agreement before the commission’s deadline,” he said.
Though the discussion on live racing days began in September when Magna proposed to cut live racing by more than 70 days, the subject of the simulcast expense contributions arose just a week ago during a meeting between Magna and the MTHA. The expense contributions, paid to Magna by the horsemen, defrayed 50 percent of simulcast costs – of both sending and receiving – and the simulcast profits were then split between the corporation and the horsemen, said Raffetto,
Raffetto said Magna wants the agreement to be equitable but that the horsemen and breeders owed them back payments. He compared it to a tenant not paying rent for months.
“They recognize they have a responsibility,” he said. “But they just didn’t feel like paying because they didn’t have to on paper.”
Representing the breeders association, Mary Elizabeth “Cricket” Goodall said the cut-off date of Dec. 1 was putting her organization under a strict deadline since its board does not meet until Nov. 30 and the money that would go to Magna is being spent elsewhere.
“To be honest with you, the breeders are really stressed for that money,” she said. “We’ve been using that money that we were paying to the expense contribution to do other things to reward our breeders. … We need to understand exactly where it’s going.”
The commission did request a cost analysis from Magna, to explain the costs incurred on both live racing days and days consisting solely of simulcasting.
Franzone and other commissioners echoed Goodall’s time concerns and were less positive than Raffetto and Foreman about the possibility that the parties could reach an agreement. “Am I optimistic?” Franzone asked. “No.”