On the eve of the Maryland Racing Commission's last scheduled meeting of the year, the owners of the state's two major thoroughbred tracks and horse-racing industry representatives were trying to hammer out a last-minute deal to ensure live meets can be run next year.
The owners of Laurel Park and Pimlico Race Course have offered to maintain 146 days of live racing at the two tracks next year — the same number as this year — but with major caveats, said John Franzone, a longtime member of the Maryland Racing Commission.
Among the conditions, according to Franzone: that the horse owners, trainers and breeders contribute $1.7 million in operating expenses for the tracks, give up their simulcast rights to broadcast races and support the closing of a training center in Bowie.
The real estate company MI Developments and casino operator Penn National Gaming, which jointly own the tracks, also want to divert revenue from the state's slot-machine program from a track improvement fund to an operating account for the tracks, according to Franzone. But that would require a legislative change by the General Assembly, he said.
As those major sticking points emerged Monday night, prospects for agreement appeared dim. "I don't have high hopes," said Franzone, who was keeping track of developments in the talks.
Alan Foreman, an attorney for the Maryland Thoroughbred Horsemen's Association, confirmed those conditions offered by the Maryland Jockey Club, the entity that's owned by MI Developments and Penn National and operates the tracks. And he said there were others "beyond that and get worse," though he declined to give details. His association has been pressing for the same schedule in 2011 as this year.
"We have insisted on 146 days, and the discussions have been, 'If you want 146 days, this is what has to happen,'" Foreman said Monday evening. "They're just posturing."
Foreman said the horsemen have contributed money for track operations in the past and would be prepared to do so again.
This is the latest tussle in the fight for thoroughbred racing's future in Maryland since last month, when the racing commission rejected the track owners' plan to operate a 47-day schedule next year at Laurel Park and Pimlico.
The commission's decision was supported by many horse owners, breeders and trainers, who argued that such a shortened schedule would effectively kill year-round racing in Maryland.
At the same time, the commission's move left no live racing schedule in place for next year. That raised fears about not having a schedule in place for the Preakness Stakes, the second leg of racing's Triple Crown and the state's largest single sporting event. It also prompted the racing and breeding industry to warn about the loss of nearly 10,000 jobs.
Officials with MI Developments and Penn National, however, said the tracks can't continue losing money. Laurel Park, for instance, has been losing $4 million to $7 million annually, while Pimlico's profit comes almost entirely from the Preakness.
Since the commission's decision, the horsemen and other racing boosters have been trying to secure a deal that would ensure year-round racing in Maryland, a tradition that dates back to Colonial times.
As Foreman put it: "It's not fair to make this just another industry fight between the horsemen and the racetracks. It's much larger than that."
Although several plans have emerged in recent weeks, none has satisfied the horsemen and other industry supporters because they did not guarantee enough racing days to ensure year-round racing. Gov. Martin O'Malley's office also tried to broker a deal in the past week, bringing together the various stakeholders for at least two meetings.
"The governor has been actively engaged with all parties," spokesman Shaun Adamec said Monday. "They have been talking through the weekend, and the governor is hopeful that there will be an agreement that is acceptable to the racing commission."
As recently as Monday morning, Frank Stronach, chairman and chief executive of MI Developments, the majority owner of the Maryland Jockey Club, said in a brief interview that a verbal agreement calling for 140 racing days in 2011 was struck with the horsemen, an assertion that the group denied.
"It's structured so that we would not lose any money," Stronach said, adding he plans to attend today's Maryland Racing Commission meeting at Laurel Park.
Eric Schippers, a spokesman for Penn National, declined comment on Stronach's claims of a verbal agreement. "It's still somewhat of a fluid situation," he said. "We want to withhold or reserve comments" until the meeting.
A week ago, MI Developments and Penn National proposed running 77 days of live racing at the two tracks that would conclude after the Preakness in May. But the horsemen's group also rejected that proposal.
The uncertainty has left horsemen, breeders and trainers trying to figure out their next move, because time is not on their side. Laurel Park traditionally begins its winter meet Jan. 1. The racetrack in Anne Arundel County concluded its live racing for 2010 on Saturday.
"The horsemen are not going to stay here if they think we're only running until the Preakness," Foreman said, noting that some are leaving the state due to the uncertainty.
In the meantime, the Maryland Horse Council continued to push for the state to use its eminent-domain authority to force new ownership of the two tracks. Last year, the General Assembly passed a law granting the state authority to seize the Preakness and the two tracks in the wake of the bankruptcy of Magna Entertainment Corp., which then owned the Maryland Jockey Club.
The Maryland Horse Council reiterated its stance on Monday by asking the racing commission to pass a resolution urging O'Malley to begin the process if MI Developments and Penn National do not strike an agreement the horsemen and breeders support.
"Skeptics of this strategy argue that seizing the tracks and establishing fair market value would take years to accomplish," Steuart Pittman, president of the council, wrote in a letter to the racing commission. "We believe that the courts will understand the urgency of this crisis."