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Horse industry may cut De Francis' rein; New study likely to back ending his 10-year hold

THE BALTIMORE SUN

As Joe De Francis' standing in Annapolis has plummeted because of his unrestrained support of Gov. Parris N. Glendening's opponents in last year's gubernatorial campaign, his stock has plunged within the horse-racing community.

Frustrations with De Francis' decade-long stewardship of Pimlico Race Course and Laurel Park have become so pronounced that many who had stuck by him are now saying Maryland might be better off if his tracks were in someone else's hands or if the state built a new track and let someone else run it.

The first tentative steps toward that end -- what could become a sweeping reconfiguration of the state's racing landscape -- have been taken.

Last summer, as De Francis plowed ahead in his fight against Glendening's re-election, the governor proposed the idea of building a new horse track. Several months earlier, the state study commission on horse racing, as part of its recommendations of aid for the industry, had suggested looking into the prospect of a new track and creating a public-private partnership to manage it.

The second incarnation of that commission, under its Glendening-appointed chairman Stuart S. Janney III, is expected to release its report to the governor this week. One of its recommendations will likely be the repeal of an old, obscure law that grants the corporations that De Francis controls a virtual monopoly on thoroughbredracing in Maryland.

"I'd like to see the state of Maryland build its own racetrack and for the state of Maryland to run it," said C. Frank Hopkins, a member of the racing commission and longtime horse breeder and owner. "There's a growing feeling among horse people that this is the best way out."

No one, not even De Francis' harshest critics, suggests that construction of a new track is imminent -- or even inevitable. The political hurdles to overcome would be significant.

But what is clear is that exasperation with De Francis' political missteps, his drum-beating for slots and what many see as ineffectual management has spread throughout the industry and threatens to undermine his stronghold on Maryland racing.

'Erosion of confidence'

"His actions over the last three years indicate he has concluded that other forms of gambling are the only way he can build the value of his business," said Tim Capps, executive vice president of the Maryland Horse Breeders Association. "There's been a gradual erosion of confidence, but I think the whole slots thing and how he handled himself was the last straw. What was teetering on the edge has gone over the cliff."

Criticism of De Francis is nothing new.

Shortly after he became majority owner of the state's two major thoroughbred tracks upon the death of his father in 1989, he and his father's partners, the brothers Bob and Tommy Manfuso, conducted a nasty, lengthy and public divorce. Ever since, a segment of the racing community could be counted on to bash De Francis at every opportunity.

But lately, the criticism has not only become more pervasive but also more public. For the first time, leaders of horsemen's and breeders' groups are saying on the record what had been confined to private discourse.

"When the leader of the industry takes on a sitting governor and loses, we all lose," said Alan Foreman, lawyer for the Maryland Thoroughbred Horsemen's Association. "That has created tremendous anxiety in the industry. That's why this is boiling to the surface now."

Fear of being left behind

Another reason is that Marylanders fear they're being left behind as horse racing nationally surges ahead.

Attendance and wagering have increased sharply at many tracks. Racing is gaining more exposure than ever on TV. Under the leadership of the National Thoroughbred Racing Association, the sport's year-old "league office," racing insiders for the first time in years feel a sense of optimism.

Yet at Pimlico and Laurel Park, attendance in 1998 remained constant from the year before. Betting increased only slightly. The state's thoroughbred tracks and training centers continue to deteriorate. Near-constant racing fails to generate newfound excitement. And racetrack management, as its only apparent strategy for survival, replays its song for slots.

"It appears to be slots or nothing with them," Foreman said. "It's just a very stagnant situation. That's where the talk about getting new management in here comes from. The business needs to be reinvigorated."

Although De Francis acknowledged the mounting criticism in a recent interview, he defended his actions not only during the gubernatorial campaign but also during his 10 years at the helm.

Asked whether he has considered or would consider selling Pimlico and Laurel Park, he said:

"My dad had a saying, and that was, 'Everything in life I have is for sale except my family.' In response to that question I would offer that saying. In the same breath, I'm not interested in selling them. The tracks are not for sale."

Lobbying for slots

He said he would continue lobbying for slots at racetracks as he did during last year's gubernatorial campaign.

As Glendening sought re-election with a strict pledge of no slots, De Francis aggressively supported first Eileen Rehrmann, a Democrat, and then Ellen Sauerbrey, a Republican, candidates who promised at least an open mind on the issue.

De Francis waged what could be termed an "in-your-face" campaign against Glendening. And Glendening, once re-elected, reciprocated by saying that although he wanted to assist the horse-racing industry generally, he did not want to do anything to help De Francis specifically.

Glendening declined to comment for this article.

"My support of Governor Glendening's opponents was not based on any personal animosity toward the governor," De Francis said. "It was based on his self-described ironclad position that under no circumstances during his tenure as governor were slots ever going to come to the Maryland racetracks.

"Just as I don't see how the Orioles or a football franchise could compete long term at Memorial Stadium, I don't see how we can compete long term without slots. If people are opposed to slots for other reasons, either political or otherwise, I'm more than open to any other idea that would allow us to be competitive without them. But I have yet to see an alternative plan that comes anywhere close to solving the long-term problem."

That problem, De Francis said, is competing with racetracks in Delaware and West Virginia that have slots, and the likelihood that tracks in Pennsylvania and Kentucky may soon get them. Slots have enabled tracks to make more money, increase purses, lure better horses, upgrade facilities and attract more customers.

Revitalizing the sport

"Slots at our racetracks would catapult us into being one of the premier racing jurisdictions in North America," De Francis said. "It would revitalize the sport and the industry in a way that is so astonishing and of such magnitude that the reaction of the average person is, it's almost too good to be true."

De Francis' unwavering quest for slots has alienated segments of the racing and breeding industry who question his projection of enormous benefits. Some fear slots might become so profitable that tracks owners might jettison live racing.

Also, industry leaders believe that the state would never approve slot machines just for the racetracks, especially as long as De Francis owns them. If slots were approved at other sites as well, the benefit to horse racing would be diminished.

And those who have observed De Francis during his 10-year tenure say the perception that he began asking for slots without first doing everything possible to make his tracks profitable has hurt his cause.

"If he'd done everything he could and still couldn't turn things around, and then went to Annapolis and asked for slots, he'd probably get a better reception," said Foreman, the horsemen's lawyer. "But by not doing anything else but asking for slots, he hasn't ingratiated himself with anybody. And if he did get slots, would he do anything then?"

Racing inheritance

This inherent distrust dates to the earliest days of De Francis' regime when he inherited Pimlico and Laurel Park.

His father, Frank, had created an image around Maryland racing that was almost larger than life, and he did it in the span of five years.

Frank De Francis bought Laurel Park in late 1984 and Pimlico in early 1986. He oversaw a reduction in the pari-mutuel tax and the advent of inter-track wagering that allowed patrons at Pimlico to bet on races at Laurel Park, and vice versa.

In a couple of years, wagers shot up about 40 percent. Purses soared from $100,000 a day to $140,000.

The senior De Francis upgraded the stakes schedule. He built Sports Palaces, glitzy betting venues. He painted, patched and polished. He promoted the tracks as if he were ringmaster.

When he died at 62 in August 1989, his son stepped into the spotlight -- a 34-year-old antitrust lawyer from California with no experience in horse racing but a wardrobe fit for the board room. He and his father's partners, the Manfusos, clashed immediately. And before they could settle hostilities, the economy soured and business suffered.

The "Maryland Miracle" over which his father presided had vanished -- almost as quickly as you could say Joe De Francis.

The slide reversed

As the tracks slipped nearer to bankruptcy -- the harness tracks as well -- De Francis helped usher three crucial measures through the legislature: full-card simulcasting, off-track betting and an expansion of inter-track wagering that allowed harness tracks to broadcast thoroughbred races and thoroughbred tracks to broadcast harness races.

That reversed the slide. In 1993, Pimlico and Laurel Park reported a loss of $7.04 million. The next year, with the innovations in place, the tracks reported a profit of $1.16 million.

Capps, head of the state thoroughbred breeders association, served on De Francis' management team from 1991 to 1995. He heard the criticisms of De Francis for putting live racing at risk by televising so many races from other tracks. What he didn't hear, he said, was De Francis receiving any credit for salvaging the tracks.

"With all those things going on, people criticized him for not paying attention to live racing," Capps said. "What he was paying attention to was trying to keep his business alive. Those initiatives saved everybody's bacon."

And that, De Francis says, is what slots can do now. But the political currents against which De Francis paddles have turned treacherous.

The saying around Maryland racing is that De Francis is as popular in Annapolis as Saddam Hussein is at the White House. The widespread feeling is that De Francis can no longer lead the industry and, in fact, has become a liability.

Challenges to his authority have become commonplace. Led by activist chairman John Franzone, the Maryland Racing Commission has harshly criticized De Francis and his Maryland Jockey Club for the substandard condition of Poor Jimmy's in Cecil County and the rest of the state's off-track betting network.

An inadequate Pimlico

But the harshest criticism of De Francis targets the condition of his racetracks and stable areas. The glaring inadequacy of Pimlico became apparent to the nation during last year's Preakness when the power went out.

"The Preakness in many ways becomes an embarrassment to us every year," Foreman said. "Reporters come in from other states and write how we don't deserve the Preakness because of the conditions at Pimlico. Something drastically needs to be done with respect to these facilities."

De Francis readily agrees. He said that although he sinks as much money as he can into capital improvements, he cannot afford the vast upgrades the aging tracks require. Slot machines, however, would allow him to rebuild Pimlico and Laurel Park into "absolute showplaces," he said.

A new track

In recent months the study commission on horse racing has again raised the issue of a new racetrack as it considered how the state might continue its aid to the industry. In the past two years Glendening and the General Assembly have granted the racing industry more than $16 million in subsidies, primarily for purses, the prize money for owners of the top horses in each race.

Janney, the new commission chairman, perhaps showed his hand by calling as his first witness Bruce Garland, head of the New Jersey Sports and Exposition Authority. The authority operates the Meadowlands and Monmouth Park racetracks for their owner, the state of New Jersey.

Garland said the tracks prosper by focusing on racing, maintaining facilities and catering to fans. "We call our racing fans guests," Garland said.

Another witness was Franzone, the Maryland Racing Commission chairman. He requested that the legislature repeal the law that prevents his commission from awarding a thoroughbred license to anyone but groups controlled by De Francis.

Written more than a half-century ago, apparently as a way of stabilizing a rapidly changing racing industry, the law says that only the Maryland Jockey Club, which operates Pimlico, and the Laurel Racing Association, which operates Laurel Park, can be granted a license to operate one-mile thoroughbred tracks. De Francis is president and CEO of both.

Alan M. Rifkin, De Francis' main lobbyist in Annapolis, promptly promised to wage an aggressive fight against any new track or track operators that would compete with Pimlico and Laurel Park. Still, Franzone and others push ahead with their vision for racing in Maryland.

"My main goal is to get a new facility for Maryland racing," Franzone said. "We wouldn't have attracted an NFL team with Memorial Stadium. And if we still had Memorial Stadium, we wouldn't have the Orioles anymore."

Even advocates acknowledge an uphill battle for a new track considering the likely opposition of taxpayers to financing any part of it. But a few ideas have been floated: finance construction with a scratch-off lottery game, create a state racing authority to sell bonds for it, or sell the Timonium fairgrounds to help pay for a complex that would include the state fair, a racetrack and large training center.

De Francis has heard the rumblings about a new track -- and has noticed that no one has proposed him running it.

"I don't expect anybody to build a racetrack and either give it to me or give it to anybody else," he said. "But certainly, for my own part, I would be happy to explore any kind of public-private partnership that would be beneficial for the racing industry as a whole and beneficial for my corporation."

Pub Date: 2/21/99

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