Massachusetts
New Proposal, Laurel Cut
The New England HBPA’s response to Suffolk Downs’ proposed terms for the 2011 meet was presented to the track this morning and posted to the group’s website this afternoon. You can read the whole thing — it’s a two-page letter (PDF) — the gist of which is that the horsemen will race for the number of days required by state law for an equal split of the simulcasting revenue, “without the guarantee made in previous agreements as to the total amount of purses to be paid during the course of the meet.” No purse guarantees is the concession* — the rest of the proposal is what both sides stumbled over earlier in negotiations, leading to the breakdown in talks. Suffolk confirmed that it received the new proposal, but declined commenting until management reviewed it. My sense is that a breakthrough isn’t in the offing.
Suffolk’s simulcasting menu shrinks again on Friday. The Laurel Park signal will be blocked beginning tomorrow. The action, being taken by the Maryland Thoroughbred Horsemen’s Association in solidarity with the NEHBPA (joining the Florida, Ohio, and Oregon horsemens’ groups), brings the number of blocked tracks to six and could be taken as another sign that the impasse isn’t about to end soon. Here’s one Massachusetts bettor mad about the mess.
10:35 PM Addendum: Funny, I didn’t expect confirmation that the situation wasn’t on an upswing to come so swiftly. “[T]he racetrack threatened legal action against the horsemen and demanded they remove their office trailers from the grounds,” reports Lynne Snierson. At issue, apparently, is the NEHBPA’s fact-sheet posted yesterday (and which I delved into a bit below).
*2/11/10 Addendum: Additional info on what the NEHBPA projects for purses:
The proposal requires racing for the minimum number of days required by statute which is presently 100 days of racing. Daily purse distribution would be determined based upon available revenue. Assuming revenue consistent with 2010, the NEHBPA projects a daily purse distribution of about $95,000 per day would result from implementation of its proposal, with the prospect that the daily purse distribution could increase to $100,000 per day based on increases in simulcasting revenue consistent with increases experienced for the month of January 2011.
Assuming that 2011 revenues will remain consistent with 2010 seems risky, considering the downward trend in handle across the industry, as well as at Suffolk Downs, which is down more than a third since 2007.
Point by Point
While waiting to learn more about the New England horsemen’s counter-proposal to Suffolk Downs, and the track’s response, it seems worthwhile to dig into a couple points under discussion. Where last left off, negotiations had come to a standstill over the number of race dates, the total purses to be paid, and the simulcasting revenue split. Suffolk, awarded the state-mandated minimum of 100 days in 2011 by the Massachusetts Racing Commission, proposed racing 67-76 days for average daily purses of more than $100,000 — the level sought by the NEHBPA — instead of the $75,000 initially offered. The NEHBPA rejected racing fewer than 100 days, which would require legislative approval, citing the importance of maintaining the Massachusetts breeding industry, and holds that the higher purse level, which would total approximately $10.6 million instead of the $7.5 million Suffolk projects, could be funded by a more equitable split of simulcast monies.
What is not in contention at this time is the purse formula posted by Suffolk Downs on its website (PDF), or revenues after financial documents previously requested from the track were provided to the NEHBPA on Tuesday.
Responding to a dispute fact-sheet published by Suffolk last week, the NEHBPA posted a “Truth About Suffolk Downs Fact Sheet” (PDF) on Wednesday. We’ll pass over item one, which questions track management’s commitment to live racing. It’s been my opinion since Richard Fields bought into the place in 2007 that management has consistently demonstrated good will and concern for the track and its community, history, and future. Fields and company have never hidden that their goal is for expanded gaming — preferably a casino — to come to Suffolk, but their support for racing appears genuine.
The NEHBPA takes issue with Suffolk’s claim that it raised purses in 2007 and 2008 in item two, writing that 2008 purses were $200,000 less than in 2007, and 2009 purses were $2.3 million less than 2007. That’s a decline of 19% for the period, which the group ascribes to Suffolk paying less on the simulcasting split. What this ignores, though, is that race dates also declined in 2008 and 2009, and much more importantly, that handle declined. In 2009, simulcasting handle was down 26.2% and live handle down 27.6% over 2007. Comparing 2010 to 2007, purses were down 23.6%, simulcasting handle down 35.6%, and live handle down 36.2% (all figures based on data supplied by Suffolk). In other words, purses have declined less than total handle since 2007.
Item three has to do with the “overpayment” of purses by Suffolk, which the track calls voluntary and the NEHBPA contractual, writing that “the NEHBPA knew that the requirement to pay purses at the levels set forth in the contract would result in Suffolk paying more in purses than the revenue accumulated from the various sources as set forth in the contract.” I could be reading this wrong, but it sounds as though the NEHBPA knowingly extracted more money for purses than revenues could support, and that the group wants a new contract with the same deal. No wonder Suffolk balks.
[2/11/10 Edit: NEHBPA lawyer Frank Frisoli clarifies the above:
As discussed in greater detail in postings on the NEHBPA website, we have always considered the “overpayment” of earned purses as an additional share of the simulcasting revenue and a consequence of the terms of the contract. The contracts signed in the past required Suffolk to pay towards purses simulcasting revenue in accordance with state law. State law requires the parties to negotiate between a minimum and maximum percentage. So the contracts signed required Suffolk to pay an amount between 4% and 7.5% of the gross simulcast handle to purses which translates approximately to a minimum of 25% of the net commissions to a maximum of 50% of the net commissions.
I stand corrected re: more for purses than revenues could support.]
Coming back to the track’s commitment to racing, item four spells out the horsemen’s fears regarding expanded gaming:
If Suffolk Downs is granted a casino license, the profits that could be realized from developing for gaming use the portion of the Suffolk property presently used for racing will significantly exceed any profits that could be realized from continuing live thoroughbred racing. So the future of thoroughbred racing at Suffolk Downs appears to be clearly conditioned upon legislated conditions being attached to the gaming bill requiring Suffolk to continue thoroughbred racing.
Well, yes, and that’s what makes the slots trade such a treacherous one, as Bill Finley recently wrote. But the New England horsemen are not helping themselves by attempting to buck the trends driving the industry these days, such as shorter meets. The NEHBPA actually attempts to make an argument for a longer meet in item five, seeking to increase the number of race dates to a minimum of 125 days annually in order to support the Massachusetts breeding program. Ray Paulick responded to this seeming flight from reality:
So according to the legislature, the NEHBPA, and the Massachusetts Breeders Association, the state needs four racing days for every live foal it produced three years ago. Using that formula, Kentucky would require more than 30,000 racing dates a year.
There’s just no market for 125 days of Massachusetts racing (or 100 days), not at the level the game currently exists in the state. The handle bears that out.
Because I’m determined to keep this post to a reasonable length, we’ll skip over the rest of the document, which largely reiterates points already made. The exception is a late charge, in item 10, that Suffolk is negotiating with the intention of not holding a meet. “The negotiating posture of Suffolk Downs clearly evidences its intent not to conduct live racing in 2011,” reads the fact-sheet. Track management has said elsewhere, and repeatedly, that a live meet is planned, whether an agreement is made with the NEHBPA or another horsemen’s group, and I see little reason to doubt the sincerity of their statements, although I do agree with the NEHBPA that average daily purses of $75,000 for 100 days are “insufficient.” The solution, though, is fewer days.
Negotiations to Resume?
After days of stalemated negotiations, the New England HBPA plans to present Suffolk Downs with a counter-proposal to the track’s January 26 offer. It’s a bid to end an impasse that has led to the blocking of simulcast signals from Florida, New York, Ohio, and Oregon, and threatened the running of a 2011 meet. During a closed meeting on Tuesday, after financial information the NEHBPA had been seeking from Suffolk was provided, the board “authorized submission of the new offer which will be issued to Suffolk Downs no later than tomorrow,” said NEHBPA lawyer Frank Frisoli this morning.
Frisoli declined to discuss the details of the proposal or whether resuming negotiations would result in the blocked signals being made available once more to Massachusetts bettors. “I will not address the terms of the offer until after it has been made,” he said, noting that the horsemen’s group only has control of the New York signal. “The NEHBPA had no involvement whatsoever relative to the Tampa Bay signal,” said Frisoli, “and it is entirely inappropriate to demand action beyond our control as a condition to further negotiations.”
Related: There’s been some confusion about whether Massachusetts statutes only allow ADWs to take wagers from state residents on tracks that simulcast through Suffolk Downs. TVG has closed off betting on the blocked signals to customers, but TwinSpires has not. “We will continue to offer wagering on these tracks to Massachusetts residents because the dispute does not involve us or our contracts,” said a company representative. Sounds like a reason to sign up, if you don’t already have an account!
2/10/11 Addendum: More on the counter-proposal from Lynne Snierson, as well as notice that Suffolk plans to reduce hours and staff due to lost revenue.
The Impasse, Cont.
As the dispute over terms for a 2011 Suffolk Downs meet continued, the union representing the racetrack’s workers warned of possible job losses and the number of bettable tracks available to Massachusetts horseplayers declined by one when the Oregon horsemen blocked the Portland Meadows signal in support of the New England horsemen on Monday. That’s in addition to the loss of New York last month and the Ohio and Florida signals last week.
Unless bettors travel to the simulcasting halls at Plainridge or Raynham, which are not affected by the dispute and retain signal rights, leave the state, or open an offshore account or ADW account with an out-of-state address — options discussed by horseplayers on forums and Facebook — they won’t be able to play Aqueduct, Gulfstream, or Tampa races on track or by ADW beginning today, a shut-out Suffolk called “a slap in the face” to fans.
I asked NEHBPA lawyer Frank Frisoli on Tuesday morning what the horsemen would like horseplayers to know about why the signals have been blocked. He replied that he was unable to provide a response at that time, but would have one by mid- to late-afternoon. No further reply was forthcoming*.
How long before the dispute is resolved and what resolution might look like is uncertain. Suffolk Downs COO Chip Tuttle told Matt Hegarty that there was no progress in negotiations as of Tuesday afternoon. “We’re still waiting on a counterproposal to the proposal we offered on Jan. 26.” The NEHBPA board met in a closed meeting last night.
Suffolk management considers itself “free to discuss parameters of the 2011 season with any individual owners, trainers or organizations” (PDF), and a new organization representing Massachusetts horsemen, the Thoroughbred Horsemen of Massachusetts Association, is reportedly being formed, although those who may be involved in it are reluctant to speak publicly about the group or its positions on purses, days, and revenue splits. The Facebook page for the group that has been viewable on-and-off since late last week is on again, but has no followers or messages other than the original posting, reported here on Sunday. “If this association were to become a reality,” said a horse owner who approved of the group’s apparent stance, “I would pledge my support to them to keep racing at Suffolk Downs a reality.”
The most visible support for a new group came from horsewoman Laurine Barreira on Monday when she wrote on the Suffolk Downs Facebook page, “I am more than glad that people are working on making a mass hbpa! we as horseman need someone representing us that actually cares about the future of racing in massachusetts!” Barreira is the granddaughter of horseman and breeder Lloyd Lockhart, the third generation of her family involved in Massachusetts racing, and a co-owner of Ask Queenie, the exceptional Mass-bred retired last fall with 27 wins and $780,365 in earnings.
The effects of the impasse are being felt among the Suffolk community, scattered to other tracks for the winter, reports Lynne Snierson:
“I can’t believe what a nightmare this is,†said one trainer currently stabled in Florida who requested anonymity. “We need a contract in place and it’s already late in the game if we’re going to be able to ship in and start racing again at the beginning of May. We need to submit stall applications and firm up plans. It won’t be easy to get stalls at other places because all of the other tracks on the East Coast offer higher purses and space there is at a premium. Even if we could get in, we don’t have the horses to compete.”
Or, as a horseman succinctly said to me when I asked for impressions of the situation, “If they can’t get it together, we’re fucked.”
*11:45 AM Update: Frisoli replied this morning, stating that “action to deny permission for transmission of the NYRA signal was taken as authorized by state law only after all other alternatives were exhausted” (the NEHBPA does not have control over the other blocked signals), and provided a fact-sheet produced by the NEHBPA in response to one posted by Suffolk Downs earlier (PDF), which includes additional details about the purse structure in dispute.
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Jessica Chapel writes and edits in Massachusetts. Railbird is a Thoroughbred horse racing blog published from June 2004 to July 2019. More / Contact
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