JC / Railbird


The Offer That Isn’t

While waiting on the next twist in the ongoing dispute over the 2011 meet between Suffolk Downs and the NEHBPA, I’d like to return to a point in the modified offer approved by the horsemen on Friday that didn’t make much sense. The group agreed to race 80 days, as the track proposed, if legislation to approve a race date reduction passed — if it didn’t, the horsemen agreed to race 100 days for the same total purses offered of $8.25 million.

The problem is that such a structure would bring average daily purses down to $82,500, the same level at which Suffolk calculated the horsemen’s February 10 proposal, based on revenue projections, and the reason the track rejected that offer — the figure was too close to the daily average of $79,000 being paid during the latter portion of the 2010 meet. Both sides agree an average in that range is too low to support racing, suggesting that the horsemen are now trying to have it both ways — the group concedes the 80 days, and the likelihood of the legislation it cannot agree to not oppose succeeding, even as it attempts to compel the track to run 100 days.

“The NEHBPA voted to accept a proposal that was never offered,” said a source close to the discussions. Suffolk specifically told the NEHBPA, said the source, that the $8.25 million was not in play for 100 days.

Which raises questions of what the horsemen’s gambit — characterized by the source as “cynical” — is meant to accomplish, and where discussions go from here. “The framework of this deal is essentially solving problems for the future,” NEHBPA lawyer Frank Frisoli said on Friday. That’s a hopeful assessment, one track management clearly doesn’t share. “The increase in purses was contingent upon one condition, neutrality on legislation to reduce the number of days required to simulcast, that the NEHBPA is unwilling to meet,” said Suffolk’s vice president of marketing and communications, Christian Teja, responding to the offer. “We will assess all our options, including legislative relief independent of the HBPA.”

Suffolk doesn’t need the horsemen’s approval to pursue its legislative agenda; the track doesn’t even need the horsemen’s agreement to run fewer dates. The state-mandated minimum is what’s required for the track to simulcast — Suffolk could announce a 30-day meet on Monday, so long as it was willing to cease simulcasting. As might be expected, the horsemen disagree. Because the MRC awarded Suffolk 100 days this year and it has been simulcasting, “The NEHBPA firmly believes SSR is now obligated under state law to conduct a live meet of at least 100 days of live racing,” the group notes in its February 25 proposal before agreeing to reduced days.

The situation is now quite uncertain. Suffolk offered $8.25 million for 75-80 days, plus five more days if handle was near what was it was last year by June 30, and a 50-50 simulcasting revenue split. It all hinged on neutrality — on the NEHBPA agreeing not to oppose the legislation that would make 80 days possible. The horsemen agreed on the 50-50 split, which they had sought from the start, and because they could not accept the no-opposition provision, to $8.25 million for 80 days, if a bill passes, or 100 days, which many still hope to run. It’s an impossible position, nodding to the economic and political realities of Massachusetts racing, but asserting a demand that nothing change.

Unaminously Accepted

Could the dispute be nearing an end? Late Thursday, the NEHBPA board voted to reject a proposal for the 2011 meet made by Suffolk Downs. “As it was written,” said Frank Frisoli, clarifying that the group could not accept the offer with its request that the horsemen not oppose state legislation reducing race dates. “We can’t abrogate our members’ right of free speech,” said the lawyer, explaining the horsemen’s opposition to the provision. “And we are not going to take any position supporting [Suffolk’s] legislative agenda.”

Modifying the offer to exclude that request, the NEHBPA board unanimously accepted the track’s proposal, agreeing to total purses offered of $8.25 million and an equal simulcasting revenue split. The horsemen have even agreed to race 80 days if the legislature approves a bill allowing Suffolk to run fewer than 100 days. If days are not reduced, then the horsemen will race for 100 days for the same purses.* “We’ve essentially accepted their position,” said Frisoli. The modified proposal has been submitted to Suffolk, and will be published on the New England horsemen’s website at some time. Until it is, I’ve posted a copy of the press release (PDF) here.

More on today’s developments from Steve Myrick in the Thoroughbred Times.

4:45 PM Addendum: What horseplayers want to know: When do the signals return? And, because I’ve commented a few times before that the horsemen have not acknowledged the effect of the dispute on racing fans, I have to point out that the NEHBPA proposal does just that on page two: “There is no doubt that this impasse has also inconvenienced the patrons who wager and support horseracing.” Appreciate the mention, even belated.

6:15 PM Update: Don’t head to Suffolk on Saturday expecting Aqueduct. Responding to the offer from the horsemen, Suffolk Downs vice president of marketing and communications Christian Teja said, “We’ve made several concessions in the interest of having a quality meet this year, including keeping the barn area open for 30 weeks and paying over $100,000 in daily purses at the request of the NEHBPA. The increase in purses was contingent upon one condition, neutrality on legislation to reduce the number of days required to simulcast, that the NEHBPA is unwilling to meet. We will assess all our options, including legislative relief independent of the HBPA.”

2/26/11 Addendum: Suffolk Downs, NEHBPA “far apart on a key issue,” reports Lynne Snierson. “In my mind, we’re very close,” Frisoli said yesterday.

*If the horsemen were to race 100 days for $8.25 million, however, that would bring the average daily purses down to the level both sides agreed was too low to support racing. I assume they’re gambling on the race day reduction.

What’s Next?

That’s the question for the Massachusetts racing community now. After days of intense discussions, and with time running out, a source reports that the NEHBPA board rejected the latest proposal from Suffolk Downs for the 2011 meet by a vote of 5-4, with one abstention, in a meeting on Thursday night.

Before the meeting, NEHBPA counsel Frank Frisoli told the Blood-Horse, “[Feb. 25] is the day for us to get back to them, and they said after that their position is likely to change. Ours would then change as well.”

What change there will be to their positions is uncertain. The horsemen have been seeking 100 days of racing, purses totaling up to $10.6 million, and an equal split of net simulcasting revenue. In its proposal of February 18, a copy of which was provided by a source, the track offered 75-80 days of racing, plus five additional days if a target for handle was hit by June 30, and total purses of $8.25 million. In later negotiations, Suffolk also reportedly agreed to the 50-50 simulcasting revenue split — a significant concession.

However, the track’s offer was made with the caveat that if blocked simulcasting signals were not restored by this weekend, days and purses could be cut — and the issue of days appears to be the cause of the scuppered deal. For the track to race fewer than 100 days, the state-mandated minimum for simulcasting, the legislature would have to pass a bill allowing a shorter meet. Suffolk’s offer was premised on the horsemen not opposing such a bill.

With the dispute now in its fifth week, and simulcasting handle at Suffolk down almost 45% this month due to the blocked signals, the situation — which seemed to be approaching a resolution — has taken a worrisome turn.

7:45 AM Update: Lynne Snierson has more on the days:

“We will let Suffolk petition the legislature to reduce the number of days of racing,” Frisoli said. “The one thing we won’t do is support their petition to race fewer than 100 days. If the legislature agrees to reduce the number of days, then we’ll race whatever days the state requires.”

Negotiations will continue today in an effort to reach an agreement.

10:45 AM Addendum: Coming back to a couple of points — the average daily purses Suffolk is offering range from $103,000 for 80 days to $110,000 for 75 days. The horsemen were given the option of choosing which structure they preferred. Either way, the average meets or exceeds the daily purses proposed by the horsemen to the track on February 10, in which purses were estimated at $95,000 to $100,000, based on an equal split of available revenue, assuming revenue remained level with 2010. That seemed a risky assumption, considering the downward trend in Suffolk’s handle, and it was on that basis that track management turned down the offer after calculating that purses would probably run $82,500 per day — not much more than the $79,000 daily that was being paid at the end of last year’s meet and an average for which the horsemen said they could not run this year. On that matter, all agreed.

Days are a trickier issue. In the offer made by Suffolk, management wrote, “our proposal requires that the NEHBPA not oppose the legislation and not oppose a request to the [Massachusetts Racing Commission] that the requirement be reduced to match the number of days set forth in our agreement.” In the quote Frisoli gave Snierson after Thursday’s meeting, he said, “The one thing we won’t do is support their petition to race fewer than 100 days. If the legislature agrees to reduce the number of days, then we’ll race whatever days the state requires.” This reads like very small matter of semantics — Suffolk does not ask the horsemen to support, it asks that they not oppose. It would seem that the horsemen’s counsel is saying that the NEHBPA won’t oppose a bill reducing days, which is the concession Suffolk seeks, but his statement does not indicate agreement. I’ve attempted to contact Frisoli for clarification and hope to have more on this point this afternoon.

2:45 PM Update: Clarified! In a conversation this afternoon, Frisoli said that the NEHBPA board has unanimously agreed to accept Suffolk’s proposal, with one change. Steve Myrick of the Thoroughbred Times has the story.

Proposal Revised, Talks Continue

In a lengthy meeting on Wednesday night, the NEHBPA board discussed a revised proposal for the 2011 meet submitted by Suffolk Downs yesterday, said horsemen’s counsel Frank Frisoli in an email this morning. Another board meeting is scheduled tonight to continue deliberations. “The NEHBPA remains committed to reaching an equitable and immediate resolution of the impasse,” wrote Frisoli. Updates, as available.

1:25 PM Addendum: More from the NEHBPA (PDF). According to the posted statement, the revised proposal “reflect concessions … that Suffolk Downs was previously unwilling to make.” That doesn’t include the 100 days the horsemen have sought. Suffolk’s previous proposal was for 75-85 days.

4:15 PM Update: Time is running out for a deal, reports Lynne Snierson. Dates and money remain at issue. Frisoli told the Blood-Horse, “I see a framework for agreement here [in the latest counterproposal put on the table by Suffolk], but I do not know if our board will approve it.” The group has until the end of the week. Asked earlier today if the board is feeling pressure, Frisoli said, “I believe both sides realize the urgency of reaching a resolution.”

It’s Not Critical

But there is some urgency to ending the Suffolk Downs dispute:

“We hope to get this resolved soon because the options moving forward become less and less attractive,” said Tuttle. “The loss of these simulcast signals is devastating to business. The longer it goes, the less likely we are to be able to conduct a live meet of any quality or duration.”

The NEHBPA board meets tonight to continue its discussions.

NEHBPA Discussions Continue

The NEHBPA board met on Monday night for round two of a discussion on the latest offer from Suffolk Downs for the 2011 meet. There was no resolution to the dispute at the meeting’s conclusion. Via email, NEHBPA lawyer Frank Frisoli said this morning that the board “is continuing to discuss the matter and is seeking to discuss alternatives and modifications with Suffolk Downs.”

As Lynne Snierson reported for the Blood-Horse yesterday, and a Railbird source confirmed, the net simulcasting revenue split remains contentious, and days may be a matter of dissension within the board. The horsemen have sought 100 days of racing this year. Suffolk, which originally offered 67-76 days, has now proposed 75-85 days. What does not seem an issue at this point is the track’s total purse offer of $8.4 million. That’s about the total paid last year, and matches up with the horsemen’s last offer to the track.

Regarding the proposal, Frisoli noted, “we believe [it] remains open.” Contrary to a report yesterday that Suffolk has threatened to shut down in March if the blocked simulcasting signals were not restored by February 26, a source indicated that there is no deadline to the proposal, although it is based on revenue assumptions that may not hold if signals are not restored soon. The board will meet again to discuss the offer on February 23.

9:30 PM Addendum: Lynne Snierson has more on Monday night’s meeting. As mentioned above, days remain an issue. Snierson’s source says that that board is in agreement on 100 days; Frisoli’s response is a study in lawyerly parsing:

“Part of the problem is that the number of live racing days is more important to some of our members than it is to others. As a board, we are trying very hard to do a good job of representing the entire membership. I think the board is doing that.”

Also clarified is the possibility that the purses and days on offer will be cut if simulcasting signals are not restored quickly, as a racetrack source told Railbird yesterday. “[T]he offer Suffolk has on the table now is contingent upon all simulcast signals being turned back on no later than Feb. 27. After that, Suffolk will start cutting race days and total purses,” reports Snierson.

No Consensus (Yet)

The NEHBPA board met on Sunday to discuss the latest offer from Suffolk Downs for the 2011 meet, but a consensus on the terms could not be reached, reports Lynne Snierson:

“There was a lot of talk but there is no agreement yet,” said one board member who asked not to be identified. “Our discussions were mostly about clarification, of both exactly what Suffolk is offering and of what we want and what we can accept. There is no consensus among us at this time, but one may be within reach.”

Details of the proposal have not been confirmed. Both sides may have moved toward a compromise on purses and days, with Suffolk reportedly upping its offer for total purses to $8.4 million* from $7.5 million and the horsemen giving way on the 100-day meet minimum the group has sought. Snierson indicates that the simulcasting revenue split, which the horsemen have argued should be 50-50, may also still be in contention. The board will meet again tonight to discuss the proposal; updates here as available.

*The total of the new offer from Suffolk is in line with the counter-offer made by the NEHBPA to the track on February 10, which proposed purses based on available revenue and 100 days. A source confirms the track is proposing average daily purses of $103,000 to $110,000 for 75-85 days of racing.

1:15 PM Addendum: More from Snierson:

Suffolk Downs has threatened to shut down in March if the New England Horsemen’s Benevolent and Protective Association and other chapters across the country do not restore simulcast signals by Feb. 26, according to a source close to the negotiations in the ongoing dispute …

A racetrack source said there was no deadline for the offer, but indicated that it was important for the blocked simulcasting signals to be restored quickly or purses and days on offer for the meet were in danger of being cut due to lost revenue. During the weekend of February 12-13, the first full weekend Suffolk was unable to simulcast such tracks as Aqueduct and Gulfstream, handle was down approximately 50% over the equivalent weekend the year before.

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