By Hanah Cho, The Baltimore Sun
8:29 PM EDT, October 18, 2011
It's deja vu for Maryland's thoroughbred racing industry.
Less than three months before the 2012 season, the Maryland Jockey Club and the horsemen are at odds again and have yet to agree on the number of live racing days for next year.
"We're staring at the barrel of a shotgun again," Louis Ulman, chairman of the Maryland Racing Commission, said Tuesday.
Ulman had asked the Jockey Club and horse owners and breeders to provide an update at Tuesday's meeting about next year's racing schedule at Laurel Park and Pimlico Race Course in Baltimore to avoid a similar situation to last year's, with the future of the sport and the storied Preakness Stakes in doubt.
In an 11th-hour deal brokered by Gov. Martin O'Malley, the Jockey Club agreed last year to maintain 146 days of live racing. The O'Malley administration also pushed through legislation that would redirect millions of dollars in slots revenue to help the financially struggling tracks for the next two years, a move that racing boosters assumed would provide some stability. In exchange, the Jockey Club would maintain a 146-day schedule in 2012 and 2013.
But the Stronach Group, parent company of the Jockey Club, has proposed running only 40 live racing days next year at Pimlico, home of the Preakness Stakes, while leasing Laurel Park and Bowie Training Center to the Maryland Thoroughbred Horsemen's Association — a plan that would turn the nonprofit group into a track operator.
Richard Hoffberger, the association's president, rejected the leasing idea as legally and financially unfeasible.
"It's such a bad deal," Hoffberger told the commission. "It's like buying a horse with three legs. It's not going to work."
Hoffberger said the group was willing to consider other options to help alleviate the tracks' millions of dollars in losses.
The Jockey Club's president, Tom Chuckas, characterized the proposal as a starting point for talks, but said the parties are "far apart."
In an interview, Chuckas said Stronach Chairman Frank Stronach, a horse owner and breeder, is willing to negotiate lease terms in good faith.
"From Frank's perspective, he wants to give the horsemen control of their own destiny," Chuckas said.
Despite Stronach's previous commitment to work out industry problems with horse owners, his representatives approached the horsemen's group with the most recent proposal only in late September, said Alan Foreman, an attorney for the Maryland Thoroughbred Horsemen's Association.
"At the end of the year, everyone has a gun to their heads," Foreman said. "That was not supposed to happen."
The fight last year renewed friction between owners and breeders and the Jockey Club's then-corporate parents, particularly Penn National Gaming. Frank Stronach gained full control of the two tracks in June after acquiring Penn National's minority stake.
"It's fair to say that no one involved in this situation wants World War III," Chuckas said. "It's incumbent on the parties involved in the negotiations to structure a deal that prevents a disaster and to come up with a resolution, both short term and long term."
Still, there was disagreement about whether the Jockey Club essentially agreed to maintain a year-round racing schedule for the next two years by supporting the legislation diverting up to $6 million a year in slots revenue — money originally allocated for racetrack improvements — to help day-to-day operation of the tracks.
"I think all of us on the [racing] commission felt that way — that we had a reprieve for a three-year period," member David Hayden said. "Obviously, that's not the case."
Asked why some would make such an assumption, Chuckas said: "For 2011, we fully supported the governor's efforts to keep racing at 146 days. Frank's a firm believer that he doesn't want any capital or money from the state for operations, and he wants to create his own business model and be sufficient."
Chuckas noted that the Jockey Club had not asked for the slots subsidies for 2012 and 2013.
"If you take the $6 million, then you have to race 146 days. From our perspective, we like to be financially viable. That's not doable with 146 days," he said.
The law also required the formation of a Thoroughbred Racing Sustainability Task Force, whose mission is to submit by Dec. 1 a business plan that would maintain year-round racing and sustain the sport without slots at a racetrack. The governor has not yet appointed its members.
The Maryland Racing Commission must approve the Jockey Club's racing schedule by the end of the year.
O'Malley spokeswoman Raquel Guillory said in an email that the governor's office is "very familiar with the status of discussions between the industry representatives."
"The General Assembly's intent was to have the industry come together to develop a plan for the future of the industry, with facilitation from the Governor's Office," she said. "That is exactly what is happening."
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