Negotiations
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.
Suffolk Scene
Winter weekdays don’t draw crowds to Suffolk Downs. A stalwart gang of regulars mill around the first floor clubhouse. The solitary and serious settle upstairs where the air has the heavy, warm stillness of a reading room and conversations in the terrace dining room seem murmured, words swallowed by the emptiness of the open grandstand.
If the loss of popular simulcasting signals from New York and Florida dented attendance at the track this afternoon, it wasn’t immediately obvious. But there was something missing, a lack of energy, the usual rise and fall of excited chatter as races went off. “Why isn’t there racing from Gulfstream?” asked a frustrated fan, standing in front of TVs that showed Laurel, Freehold, and Monticello, the three tracks then available for betting.
A mutuel clerk leaned against a counter before which no customers were lined up. She said to no one, “Isn’t it going to get busy here?”
After the finish was made official in the third from Laurel, a man standing next to me said, “I had the tri!” He showed the ticket, the 4-5 favorite keyed on top, for a payoff of $51.20. “That’s the first time I played Laurel,” said the man, who told me his name was Danny. I asked him what he usually bet. “I like Aqueduct. I like Tampa. But I can’t play them today, can I?” I asked him what he knew of the dispute between Suffolk Downs and the horsemen. “Listen, I don’t pay any attention to that stuff. It takes two to fight, right?”
I asked the same question to another fellow, who declined to give his name, saying that he had owned horses in partnership at Suffolk and wanted to do so again. “It’s the HBPA, it’s part of negotiating,” he said. I asked if he agreed with the tactic of blocking signals. “No,” he replied angrily. “This leadership was never elected,” he said, referring to the NEHBPA board elections canceled last November. “They don’t speak for most of the owners and trainers.”
While watching a harness race from Monticello, I talked to a man named Bill. “I’m a thoroughbred guy,” he said. “But I’m here for half an hour, and this is what’s on, so I’m betting it.” The horses came in 3-2-4. Bill had lost the race. “I think I’ll go to Rockingham on Saturday,” he said.
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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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