JC / Railbird


Coverage of the 2011 Suffolk Downs-New England HBPA dispute

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The 80-Day Compromise

In every deal, compromises are made. In the agreement made official on Friday between Suffolk Downs and the NEHBPA on the terms for the 2011 and 2012 meets, the track compromised by agreeing to an equal simulcasting revenue split; the horsemen compromised by agreeing to race 80 days.

Just as the split was a significant concession by Suffolk, so the days were for the NEHBPA, which had maintained until late in negotiations that 100 days were the minimum the horsemen could accept, in part to support the Massachusetts breeding program. Last week, the horsemen agreed to the shortened meet, but not to remain neutral on the legislation required to reduce days, a point the board ultimately conceded.

“We only conceded on the dates because from the onset Suffolk Downs made clear it would not run 100 days although state law required it to do so. So our only options were to either concede to Suffolk’s demands or compromise on days,” said NEHBPA counsel Frank Frisoli in an email, replying to the question of how the board had come to agreement on the matter of race dates.

Referring to the bill filed in the Massachusetts legislature that would allow Suffolk to race fewer than 100 days and continue simulcasting, Frisoli said that many on the NEHBPA board believed that if they didn’t agree to run a shorter meet, there would be no live racing at the track this year. It was 80 days or nothing — but the horsemen wanted some protection. “That proposed legislation delegates to the racing commission the right to excuse Suffolk from complying with state law as to the number of racing dates,” said Frisoli. “We advised Suffolk that was a deal killer.”

In exchange for accepting fewer race dates, the NEHBPA negotiated its non-opposition to the bill to apply only to the number of days required for simulcasting. “The NEHBPA will oppose the Petrucelli legislation and any other legislation which does anything more than reduce the minimum number of days to 80 for 2011 and 2012,” said Frisoli.

The terms of the agreement also provides the board with a powerful incentive to respect the neutrality provision in the hard-fought deal. “If any NEHBPA board member or employee takes action to oppose legislation to reduce dates, Suffolk can void the contract in which event the race meet will end,” said Frisoli. “I expect that our board members will comply with the contractual obligation, no matter how personally distasteful it may be to them.”

Frisoli, a horse owner of more than 35 years, said that he would “actively support” the legislation as the NEHBPA counsel. “I [will do what I] can to see that it passes in the belief that Suffolk Downs is entitled to the benefit of its contractual bargain and that the passage of the legislation would actually be of benefit to the NEHBPA in that it will ensure live meets for 2011 and 2012 and improve our relationship with Suffolk Downs.”

Now that the dispute is over, we can all look forward to the return of racing in East Boston. “The NEHBPA is delighted that we were able to reach an agreement,” said Frisoli. So are Massachusetts racing fans.

Suffolk Deal Struck

It’s official! Live racing is on! After more than six weeks of tense negotiations, the bitter dispute between Suffolk Downs and the NEHBPA over the 2011 meet ended today in a two-year agreement on purses, days, and the simulcasting revenue split. The track will run 80 days for $8.25 million (that’s average daily purses of $103,125), and will split net simulcasting revenue 50-50 with the horsemen. If handle reaches a certain benchmark by June 30, an additional five days of racing will be run. The NEHBPA agreed to remain neutral on legislation to reduce race days; Suffolk agreed to keep the barn area open from late April to mid-November. Racing is expected to begin in May. Stall applications, the condition book, and the schedule will be available in coming weeks.

“As we strive to offer a competitive racing program that is attractive to fans and horsemen, we are gratified that the NEHBPA has agreed that fewer days for higher purses is preferable to the alternative,” said Suffolk COO Chip Tuttle in a statement. “Having reached an agreement, we look forward to the 2011 racing season and to working together on expanded gaming legislation in Massachusetts that will create jobs, generate revenue for the state, benefit the local economy and ensure a strong foundation for racing here in the future.”

It’s been confirmed that the Aqueduct and Gulfstream simulcasting signals, which had been blocked as part of the dispute, will be restored on Saturday. Signals pulled in solidarity by Maryland, Ohio, Oklahoma, and Oregon horsemen could also be on as soon as tomorrow. (Of course, the question is how many horseplayers — who have scattered to Rockingham and other nearby simulcasting parlors over the past month — will return to Suffolk.)

8:45 PM Update: “[The NEHBPA] is very pleased it was able to successfully and amicably negotiate with Suffolk Downs a fair and equitable purse agreement for 2011 that also provides for a fair and equitable sharing of revenue for the year 2012,” reads the horsemen’s press release. “It looks forward to partnering with Suffolk Downs for a successful race meet in 2011 and subsequent years and seeks to develop a strong and amicable relationship with Suffolk Downs that permits the parties to work toward their mutual advantage.”

Also noted in the press release: “The decision to compromise the dispute by agreeing to accept less than the state-mandated minimum of 100 days of live racing was reached only after a majority of the Board of Directors of the NEHBPA concluded that in the absence of such compromise there would be no live racing …” Suffolk was quite serious about running a shorter meet, a justified position given the steep drop in handle since 2007.

More on this matter from Lynne Snierson, who spoke with NEHBPA counsel Frank Frisoli about the deal this evening. “[W]e looked at this and agreed to the 80 days because it was that or not have a meet,” he said. “This deal is in the best interest of our membership, the Massachusetts breeders, the farm industry, and all of the others involved.”

3/5/11 Addendum: “Did anyone apologize to the fans?” No, and why not?

Almost There

Suffolk Downs and the NEHBPA have reportedly agreed in principle to a deal for the 2011 meet. An official end to the acrimonious six-week dispute over purses, days, and the simulcasting revenue split is expected on Wednesday — once one small remaining point of contention is settled.

3/3/11 Update: Wednesday passed without announcements or news. The no-opposition letters are reportedly the sticking point. Updates, as available — here’s hoping we’ll know more on Thursday.

3/4/11 Update: Still no official word, no sign that signals have been restored.

10:30 AM Addendum: After several quiet days, unfortunate news. A source involved in the negotiations said this morning, “I thought we had a deal but it fell apart. If it doesn’t get done today we may be in for a long wait.” Talks continue. Updates, as developments or details become known.

7:30 PM Addendum: An agreement has been reached!

“Sink or Swim”

Lynne Snierson on the latest in the Suffolk Downs-NEHBPA dispute:

The general counsel for the New England Horsemen’s Benevolent and Protective Association said on the afternoon of Feb. 28 that negotiations have reached the “sink or swim” point on a contract resolution for 2011. The dispute is now in its sixth week.

“We have been in discussions today and they will continue on into the night,” said Frank Frisoli. “Suffolk talked to us and addressed the board (of directors). We are at the sink or swim point right now. I expect to be able to comment more on where we are tomorrow (March 1).”

Also noted: Massachusetts bettors crowded Rockingham this past weekend.

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.

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