A TOUGH ACT TO FOLLOW At center of crisis in Maryland racing is Joe De Francis

THE BALTIMORE SUN

It is Maryland Million day, and, for many breeders and owners, years of hard work will come to fruition. Anticipation and excitement will rule the day.

Underneath the revelry, however, a sense of quiet desperation pervades Maryland's racing industry.

At the heart of the issues dogging the industry is Joe De Francis, who has taken charge of Pimlico and Laurel race courses, Maryland's two major thoroughbred tracks. De Francis cites "a state of crisis unlike any ever faced before in the racing industry, both on a national and local scale" as the primary reason for the sport's recent slump.

Others, however, question whether De Francis' leadership can help the tracks return to better days. The tracks are suffering a crisis of confidence.

This critical period comes some two years after the death of Joe's father, Frank J. De Francis, often hailed as the tracks' savior. De Francis died in Miami on Aug. 19, 1989, after suffering a heart attack in Puerto Rico two months earlier.

De Francis' partners, Bob and Tom Manfuso, left their day-to-day management positions in June 1990, less than 10 months after Frank De Francis died. Joe De Francis, now 36, had assumed the role as president and chief executive officer of the tracks in early September 1989. The relationship between the Manfusos and Joe De Francis has become frosty at best, and until the management rift becomes settled, the tracks never may match the surge in business that marked its late-1980s revival.

"The cornerstone of your business year is the ability to maximize on your big events," said Bob Manfuso. "We haven't been doing that. We haven't done well at any time. I honestly don't think Maryland racing can get back on the pace we set unless something [in management] changes. It doesn't please me."

In 1991, betting handle and attendance have stagnated. Handle at the Laurel summer meet was down 1.5 percent from corresponding 1990 dates at Pimlico. At the Pimlico spring meet, handle was down 8.4 percent from 1990.

Meanwhile, some fans say they perceive a deterioration in services and facilities.

Some horsemen complain that their concerns are not being addressed as quickly as when Frank De Francis and the 'D Manfusos were constantly out and about.

"I've talked with Joe about things we need a dozen times, but he doesn't seem to be listening," said trainer Jerry Robb, a longtime director of the Maryland Thoroughbred Horsemen's Association. "Frank would listen to you."

The racing program has undergone a subtle but visible decline: Fields have been small, and overnight purses have taken small cuts over the past year.

De Francis and others on his management team point to the myriad problems of the racing industry throughout the nation. They say they are trying their best to help a crippled child walk. They say they cannot, however, make that child run.

Frank De Francis' legacy

Frank De Francis and the Manfusos, along with silent partner Lou Guida, bought Laurel in 1984 and Pimlico in 1986. The years after were undeniably good. Attendance and handle virtually doubled because of many factors, but mostly because of a tax concession from the Maryland Legislature, the introduction of intertrack wagering and breakthrough innovations such as the glitzy Sports Palaces, where serious bettors could enjoy stylish comforts seldom found at racetracks.

Frank De Francis was credited widely as being a master in marketing and politics. He was a highly visible, almost intimidating presence at the tracks, someone acutely aware of what his customers wanted and how to give it to them. With room for improvement at the tracks, he capitalized by winning the tax break -- which reduced the state's take from each betting dollar from 4.09 cents to .5, with the resulting windfall directed to purses and capital improvements -- and by instituting aggressive marketing.

What Frank De Francis accomplished that his son has not is complicated by the variables of time, circumstance and factors beyond control.

Wayne Wright, executive secretary of the horsemen's association, said that, before 1984, "Maryland racing had

nowhere to go but up, but now the crest has been ridden." Wright said racing is a game of peaks and valleys, and Joe De Francis accepted the task of trying to fill his father's shoes just as the industry began to encounter serious problems.

Those problems are not unique to Maryland. The recent recession has compounded the economic woes of racing throughout the country. Breeders are being forced out of the business, unable to turn a profit. Many owners have been thwarted by the Tax Reform Act of 1986, which dramatically lessened the tax advantages in horse ownership.

"I talk to owners all the time that say they've reduced," said trainer Vinnie Blengs. "Used to be one guy had five horses. Now, five guys share one horse."

But those problems don't matter to Maryland horseplayers.

Services in the Laurel Sports Palace were cut back in July -- food service was scaled down and the number of waiters and waitresses was reduced severely -- making it more of a horseplayers' study and diminishing its glamorous, casino-ish, restaurant atmosphere. Some said it was the culmination of a steady decay.

"What else do they want from us?" asked Bill Kenney of Washington, who said he attends Laurel three to four days a week. "We've been supporting them for years. When times got a little tough, they forgot all about the players.

"The place has lost the class it had when Frank was alive. It's not the same business. It's not nearly as well-managed."

Joe De Francis defended the change in the Sports Palace, saying: "[The change] cost us money. We get a percentage of the gross from the caterer, and instead of a check coming to $12 or $15, people can get pizza or a hot dog. We didn't do it because we're cheap. We did it because we thought more people would want it this way.

"Some of the regular Sports Palace patrons complained about it, but other people said they were glad. I haven't checked it lately, but I'd say the results have been mixed."

When he is criticized, De Francis said: "I try to take it to heart. We want to be as close to perfect. Patron comforts are enormously important.

"Rather than worrying about what we've done good or bad over the last two years, what we need to do is focus on this crisis that has engulfed racing as a whole. This is a very serious recession we've been in. . . . Who would have dreamed three years ago that Calumet Farm would go bankrupt? Believe me, it's very frustrating to be fighting the negatives instead of initiating positive things."

De Francis said the inauguration of the rich Frank J. De Francis Memorial Dash, the return of steeplechasing to Maryland's tracks and a recently started, $4.15 million backstretch renovation program are examples of positive moves during his tenure. But, he said, "in this period of crisis, focusing on the minutiae is like the Titanic sinking and wondering where your suitcase is."

Joe De Francis, target

Fair or not, some people have made Joe De Francis the whipping boy for the negative trends of Maryland racing. Al Ferretti, 47, from East Baltimore, said he attends the tracks four to five days a week.

"There are a lot of little aggravations," he said, "but they all add up. The concession prices are too high, and the food is no good. The [telephone] scratch lines are always messed up; there's glass in the parking lot. . . Either [management doesn't] know or they don't care. I think a lot of it is they're not horseplayers, and they don't know what it takes."

But not many people deny the desire and ambition of Joe De Francis, who left a law career to succeed his father.

"Joe is different from his father, personality-wise and in style," said John H. "Jack" Mosner Jr., chairman of the Maryland Racing Commission. "But I know he has as deep a love for racing as his father had. I've observed him in situations outside of racing and know him to be a very bright young man. People in the business community respect him and are willing to listen to him."

Lynda O'Dea, who was an integral part of track management under Frank De Francis and also since has resigned a day-to-day position, said: "The last two years has been a very difficult period for all of us, personally and professionally. It's not difficult -- it's impossible -- for Joe to fill the shoes of a legend. It would be impossible for anyone."

Still, Joe De Francis' lack of experience in racing has left him wide-open to criticism.

"When Joe came in to assume the title of CEO, it struck me as strange, presumptuous, whatever you want to call it," said Bob Manfuso, 54. "I've put a lot into this business. This business is not static. It's fluid."

A wrong message

Although he said any assessment of De Francis' performance would be "unfair, because I'm no longer in the day-to-day operation," Bob Manfuso said the Sports Palace cutback "gives the wrong statement," and management has "missed the boat in the last year, for whatever reasons.

"I've told Joe this: We have to be self-critical," he said. "You have to ask why Churchill Downs and Arlington and Saratoga are all doing well [all posted gains in handle over the past year], and we're not.

"I don't think Joe has the same commitment to being a CEO as his father did. He certainly doesn't have the ability he did."

De Francis said some comparisons to other tracks' doing well "is not always apples to apples."

Last winter, Tom Manfuso, 62, alerted reporters to Guida's wanting his common stock to be bought out by De Francis, and a minor controversy ensued. Although De Francis -- who owns only about 20 percent equity in Laurel and 47 percent in Pimlico, but owns a majority of preferred (controlling) stock in both tracks -- adamantly refused, the entire incident came off as a vote of no-confidence for De Francis from Guida and the Manfusos.

The acrimony between De Francis and the Manfusos ultimately may result in a buyout, one way or another. According to 1989 and 1990 independent audits of the tracks, an agreement dated Oct. 1, 1989, sets an Oct. 1, 1993, deadline for a change in ownership structure between the parties.

Joe De Francis declined to discuss "any particulars about agreements with my partners."

Bob Manfuso said the agreement "provides a window of opportunity where either party can offer to buy or sell. Obviously, at that time, something will happen."

Waiting to tap the market

Current woes aside, De Francis and Bob Manfuso say Maryland racing has tremendous potential. Manfuso said racing

fans in the Baltimore-Washington area "are as good as in any in the country." De Francis often talks of the "huge, untapped marketplace" the area represents. Both want to fulfill the promises of the circuit -- although it likely will have to happen one without the other.

Bob Manfuso said he has to decide whether gaining control of the tracks is worth returning to a grueling work schedule. If he and his brother were to become controlling owners through a buyout, he said he immediately would implement "specific concepts on how to regain the momentum." Manfuso would not say what those concepts are.

De Francis said his idea of a better Maryland circuit is "one that will move into an era of cooperation between tracks and racing centers throughout the country. There will be a much better product, in Maryland and in many places."

As the better product waits to be developed, more immediate problems beg to be worked out.

Getting a handle

Average daily betting handle at Maryland's 2 major thoroughbred tracks:

Year.. ..Track.. .. .. .Handle.. ..Track.. .. .. ..Handle

1985.. ..Laurel.. ..$1,154,136.. ..Pimlico.. ..$1,014,337

1986.. ..Laurel.. ..$1,274,344.. ..Pimlico.. ..$1,098,256

1987.. ..Laurel.. ..$1,335,661.. ..Pimlico.. ..$1,197,796

1988*.. .Laurel.. ..$1,533,289.. ..Pimlico.. ..$1,548,924

1989.. ..Laurel.. ..$1,602,323.. ..Pimlico.. ..$1,626,330

1990.. ..Laurel.. ..$1,552,325.. ..Pimlico.. ..$1,746,804

1991**.. Laurel.. ..$1,549,803.. ..Pimlico.. ..$1,680,410

.*-intertrack wagering began in March. **-through Aug. 11.

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