HBPAs Out To Destroy New England Racing ?


I have an old saying. My intelligence can’t compete with ignorance. Our friend, Bernie Dickman wrote incredible lies about the NEHBPA. Here is just a sample of his ignorant blog. I had promised never to let him have the publicity he so desperately wants but I just could not let this go on. Here are his comments and below is the THE TRUTH about the “ Suffolk Downs Purse Dispute Fact Sheet”.
HBPAs Out To Destroy New England Racing
Bernie writes on his blog the following:
2-8-2011

   (February 8, 2011) – Benevolent. The Random House Dictionary of the English Language defines it thusly: “desiring to do good to others; characterized by or expressing good will or kindly feelings. Synonyms: good, kind, humane, generous, liberal, benign, charitable, philanthropic, altruistic.”

    Then, there’s protective. “Having the quality or function of protecting; pertaining to, or designed for economic protection.”
    It’s a good bet that lo those many decades ago when the poobahs of racing allowed the name Horsemen’s Benevolent and Protective Association to be coined for the benefit of owners, trainers and backstretch employees, nobody ever envisioned it could ever come down to this. This, of course, referring to the current status of racing – and in particular, the FHBPAs vs. the racetracks. Bitterness, rancor, divisiveness, hatred, selfishness, enmity, resentment, and, of course, malevolence. That’s all there is.
     It’s high time the HBPA be renamed Horsemen’s Malevolent and Unprotective Association. HMUA.
    The larest standoff between the New England HBPA and Suffolk Downs borders on insanity. This country has had a long love affair with star athletes squeezing every penny out of “rich” owners, so most don’t care that A-Rod makes $25 million a year from the Yankees. Or that Boston’s Celtics and Red Sox, the Miami Heat, Dallas Cowboys, Los Angeles Lakers, New York Mets and several others have to pay their players exorbitant amounts to keep them in town. Stick it to the rich owners, seems to be the hue and cry. But in those towns Joe the Plumber can’t take his wife and kids to a game without using up the family’s discretionary income for the next six months.
    But for the HBPAs to punish Suffolk Downs, of all places, by invoking the horsemen’s right to have various simulcasting signals withheld going into and out of Boston is near lunacy, and could be the death knell for racing in New England. Rockingham Park’s Max Hugel tried for years to get the state to provide relief through a racino for the New Hampshire track, and Max died a few years ago never realizing his goal. Now there is no thoroughbred racing in the state.
    In Sunday’s Daily Racing Form, Chip Tuttle, Chief Operating Officer of Suffolk Downs, took out a full page ad explaining the track’s position on racing for 2011. Why it needs less dates, why it can’t afford to dole out the purse money the horsemen desire. Tuttle makes one basic point that is so fundamental to the sport it really needs no explanation. However, apparently there are horsemen who don’t get it – “Basically, purses are a reflection of handle. The more wagering, the more purse money.” As the saying goes, it ain’t rocket science or brain surgery.
    But the benevolent fellas who run the HBPAs are, one by one, joining the boycott of the simulcasting signals in and out of Boston. A fine idea. Let’s let Suffolk Downs make even less money for itself and for the horsemen. Let’s let the purse structure be so low that not one stable will show up for opening day.
    The major problem is that the constituencies of the HBPAs allow their boards of directors to have a free hand – whatever they say must be right, we voted for them, didn’t we?
    And, of course, Florida HBPA dictators Sammy Gordon and Kent Stirling are right in the thick of things. Just as they were when they destroyed summer racing at Calder a few years ago and withheld the signals for an entire meeting from April to December, then denied that the blow was really that severe and blaming poor reporting of it all on certain members of the media.
    Tuttle says that Suffolk Downs has lost more than $40 million in the past four years. I guess the horsemen want to see it go to a nice round $50 million.
 
Now for the Truth:
The New England Horsemen Benevolent and Protective Association, Inc. (NEHBPA) is a non-profit organization that represents New England thoroughbred owners and trainers. In response to the mis-information posted by Suffolk Downs relative to its contractual dispute with the NEHBPA, the NEHBPA has responded to correct the inaccuracies of the Suffolk Downs Purse Dispute Fact Sheet. The present dispute results from the refusal of Suffolk Downs to share revenue with the horsemen as it has in the past and as it is customarily shared across the United States. The allegations made by Suffolk Downs are set forth as “SUFFOLK FACT” below.
1) SUFFOLK FACT: Suffolk Downs, which celebrated its 75th anniversary in 2010, is New England’s last remaining Thoroughbred race track. Its owners are committed to preserving racing and have invested substantially to enhance racing over the last four years.
THE TRUTH: Suffolk Downs is presently controlled by Joseph O’Donnell, a Massachusetts businessman (whose concession business previously sold the food at Suffolk Downs) and Richard Fields who bought into the operating company representing he intended to “save” New England Horse Racing. The owners are committed to developing the Suffolk Downs property and seek a Casino license from the State that will make their business and property worth a large multiple of the funds they have invested. They have invested millions of dollars to secure a casino license. For at least the last several years Joe O’Donnell has been opposed to continuing horse racing at Suffolk Downs while allowing the Suffolk lobbyists to promote itself to the state legislature as a proponent of the horse racing industry. Richard Fields has been personally involved in the dispute with the NEHBPA, refusing to share revenue with the horsemen as it has in the past and as it is customarily shared across the United States. The agenda of O’Donnell and Fields is to develop the property as a casino capitalizing on thoroughbred racing as a primary reason the state should give them a casino license.
2) SUFFOLK FACT: In 2007 and 2008, the owners raised purses (the monies paid to the owners of the horses that run at Suffolk Downs), invested in improvements to the track and the barn area and brought back the Massachusetts Handicap and other big races.
THE TRUTH: As documented by a posting on the Suffolk Downs website, purses paid in 2008 were more than two hundred thousand dollars lower than 2007 purses. 2009 purses were more than 2.3 million dollars less than purses paid for the 2007 meet, yet Suffolk falsely represents the owners raised purses. The decline was a consequence of the NEHBPA’s decision at that time not to contest (as it is now doing) Suffolk Downs’ refusal to share gross revenue in the same proportions as it had in the preceding years. Based on financial information just released to the NEHBPA by Suffolk Downs, in 2008 the contract with the NEHBPA resulted in approximately 6.56% of the simulcasting handle being paid to purses (which was approximately 41% of the commissions available to be shared). In 2009, Suffolk Downs insisted on a contract that resulted in reducing to approximately 5.45% of the simulcasting handle being paid to purses (approximately 37% of the commissions available to be shared). For 2010, Suffolk Downs REFUSED TO NEGOTIATE a purse contract and then reduced
purses by an additional one million dollars several months after the meet started, causing it to retain 65.51% of the simulcasting commissions while tracks across the United States share this revenue 50/50 with purses.
Although Suffolk Downs did make improvements to the track and barn area, it was reimbursed from the Capital Improvement Fund of the Massachusetts State Racing Commission for the cost of many (if not all) of the capital improvements made. In 2008 and 2009 Suffolk Downs spent more than 3. 5 million dollars each year in advancing its gaming agenda and investing in nearby Wonderland Park, presumably to maximize its profits in the likely event the State gives Suffolk Downs a casino license.
3) SUFFOLK FACT: The owners voluntarily paid more than $3 million in purses over the amounts required by statute and by the contractually agreed amounts that have traditionally supplemented the statutory minimum funding. Over the last four racing seasons, this has benefited local horsemen and promoted higher quality of racing.
THE TRUTH: By contract with the NEHBPA for years prior to 2010, Suffolk was required to share revenue as agreed from the various revenue sources. It was also required to pay purses based on the type of race in accordance with a schedule set forth in the contract. Based on prior experience, 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. Furthermore at the time the contracts were negotiated, Suffolk Downs represented it would maintain a mix of races consistent with prior practice and available horses which practice the NEHBPA knew would cause the overpayments which subsequently occurred. The alleged “overpayment of purses by $3.4 million from 2007 through 2010” was in reality a consequence of the contractual obligation to pay purses at the specified level bargained for by the NEHBPA.
4) SUFFOLK FACT: Suffolk Downs has committed to retain racing if gaming development occurs on the property.
THE TRUTH: Suffolk Downs has used its involvement in horse racing to advance its legislative agenda to secure a casino license. In the last legislative session, Suffolk Downs successfully advanced an amendment to the Senate bill providing extra credit for those entities that conducted live racing. Its “commitment” to continue racing is probably predicated on legislative conditions requiring it to continue racing. Such conditions appear likely to be attached to any gaming licenses issued to it. One of its principal owners Joseph O’Donnell has always been opposed to continuing live racing at Suffolk Downs. 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. In light of the fact that
Suffolk’s preferred position with respect to getting a casino license has at least in part been predicated on its support of the thoroughbred racing industry, such conditions are clearly appropriate.
5) SUFFOLK FACT: Despite Suffolk Downs’ commitment, the New England HBPA has consistently advanced its own legislative agenda, at times to the detriment of Suffolk Downs operations.
THE TRUTH: The legislative agenda advanced by the NEHBPA to the “detriment of Suffolk Downs” was its efforts to increase the minimum of live racing days beyond the present 100 day statutory minimum. The NEHBPA, Massachusetts Breeders Association, and advocates of open space and the Massachusetts farms all lobbied to increase this minimum. The NEHBPA refused the request of Suffolk Downs to support legislation that would reduce the minimum number of racing days below 100 days. The legislature, in the last bill passed by the House and Senate (but amended by the Governor), supported the position of the NEHBPA, Massachusetts Breeders Association, and advocates of open space and the Massachusetts farms, acknowledging that a minimum of 125 days of live racing is necessary to support the Massachusetts Thoroughbred Breeders and Massachusetts farms. In the only purse proposal for 2011 made by Suffolk Downs to the NEHBPA, it offered to race a minimum of 67 days and a maximum of 76 days despite the present state statute requiring it to race at least 100 days in 2011. Suffolk Downs had previously applied for and secured approval from the State Racing Commission to race 100 days in 2011 in compliance with state law. Under state law, Suffolk Downs is required to conduct 100 days of live racing in 2011 in order to conduct simulcasting. So Suffolk Downs represented to the state racing commission it would comply with the statutory requirement of 100 days while at the same time suggesting to the NEHBPA that there should be no live racing in 2011 or that live racing be limited to a much shorter meet. The only 2011 purse contract proposal made by Suffolk Downs required the NEHBPA to support the efforts of Suffolk Downs to change the state law to accommodate its own agenda and reduce the number of racing days.
6) SUFFOLK FACT: Suffolk Downs’ owners have lost in excess of $40 million over the last four years; the majority of the losses are related to track operations.
THE TRUTH: The owners of Suffolk Downs invested (or continue to maintain their investment) because they expect to reap a huge profit from gaming. The financial reward to Suffolk Downs owners is likely to be a large multiple of their investment in the likely event the state grants them a casino license. The losses of Suffolk Downs for the past few years include depreciation for prior expenditures and more than 7 million invested in Wonderland and gaming in 2008 and 2009 alone. Suffolk Downs has not released its financials for 2010 to the NEHBPA. A large portion of the Suffolk Downs property remains under utilized and undeveloped, presumably because the owners decided to reserve it for development for gaming purpose. Suffolk Downs has generated little revenue from its property from alternate uses. It has acres of unused land available for parking. The majority of its large grandstand is not required to support racing activities. Suffolk’s losses result at least in part from its business decision not to maximize use of
the portion of its property not required for racing. It appears to be allocating the expenses of the entire property to racing activities when a considerable portion of the property is not required for such activities. A significant portion of its losses is, in fact. its investment in gaming and in Wonderland Greyhound Park.
7) SUFFOLK FACT: When gaming legislation failed to pass in Massachusetts in 2010, Suffolk Downs was forced to reduce costs, including expenses, personnel and purses.
THE TRUTH: When gaming legislation failed to pass in 2010, Suffolk Downs responded to the legislature by cutting jobs and cutting the purses paid to the NEHBPA horsemen. It was able to do this because it refused to negotiate a 2010 contract with the NEHBPA. At the same time Wonderland Park, in which Suffolk Downs has invested millions, was closed. The timing of these actions suggest Suffolk Downs was trying to send a message to the state legislature.
8) SUFFOLK FACT: Suffolk Downs has the lowest purse levels of any track on the East Coast as most tracks’ purses are augmented by revenue from expanded gaming (see Chart 1).
THE TRUTH: All of the tracks listed in Chart 1 on the Suffolk Downs website have purse levels considerably higher than Suffolk Downs. A number of them were not supported by gaming in 2010 (as evidenced by the #to be supported by expanded gaming in 2011 designation). The NEHBPA seeks only that a fair share of existing revenue be paid to purses. Since 2007 Suffolk has been reducing the percentage of the simulcasting handle being allocated to purses, taking a position contrary to virtually every other track in the United States which shares such revenue 50/50 with purses. Since 2007 the percentage of the net profit from simulcasting retained by Suffolk Downs has increased while the percentage paid to purses has correspondingly decreased. Suffolk Downs has been effectively retaining for itself gross revenue which equitably belongs to the horsemen. This practice caused additional funds to be available to Suffolk Downs to defray the cost of its investment in Wonderland and gaming consultants.
9) SUFFOLK FACT: While other jurisdictions are reducing racing days in response to consumer habits and to increase the quality of racing (see Chart 2), current statute requires Suffolk Downs to race 100 days in order to simulcast.
THE TRUTH: The current 100 day minimum required by state law is significantly less than the number of days previously required by state law when Suffolk raced through the winter months. The NEHBPA refused prior requests from Suffolk Downs to seek changes in Massachusetts law to reduce the minimum number of racing days from the present 100 day minimum. The Massachusetts Legislature determined that at least 125 days of live racing is necessary to protect not only the thoroughbred racing industry but also the Massachusetts breeding and farm industries. Massachusetts farms which board horses or produce grain hay, or straw, are supported by live racing. Thoroughbred horses are used for show, jumping, and equestrian events. Suffolk Downs disagrees with this agenda
of the legislature and now seeks to race less than the number of days mandated by state law. It has demanded that the NEHBPA as a condition of entering into a purse contract, agree to race less than the minimum number of days required by state law and support the legislative efforts of Suffolk Downs to change the law (contrary to the interests of the NEHBPA and Massachusetts breeding and farm industries).
10) SUFFOLK FACT: Current statute requires purse funding based on percentages of total wagering regardless of whether the track is profitable. Suffolk Downs projects to generate $7.5 million in purses in 2011 from the statutorily required amounts and the traditional supplements.
THE TRUTH: The negotiating posture of Suffolk Downs clearly evidences its intent not to conduct live racing in 2011. It refused to even negotiate a purse contract with the NEHBPA until the NEHBPA forced the issue by advising of its intent to exercise the limited rights granted it by state law. Across the United States, purse funding is negotiated as a percentage of gross revenue. The profitability of Suffolk Downs is dependent upon its management and objectives and is impacted by its decision not to maximize alternative use of the portion of its property and facilities not used for racing.
11) SUFFOLK FACT: The HBPA has indicated it does not believe its members will return to race at Suffolk Downs in 2011 for $75,000 per day in purses ($7.5 million over 100 days). Suffolk Downs offered to pay $100,000 per day in purses over 67-76 days if the statute regarding the minimum number of racing days could be changed.
THE TRUTH: The projections of Suffolk Downs are based on payment limited to approximately 4% of the simulcast handle to purses, although the statute requires Suffolk Downs to negotiate up to a maximum of 7.5%. Suffolk refuses to negotiate the issue and has made clear it will pay only the statutory minimum. From the inception of the efforts of the NEHBPA to negotiate a purse contract for 2011, Suffolk Downs has adopted the same tactics successfully utilized by it in 2010 to avoid contractual obligations. It first refused to negotiate, advising that it needed to preserve its option not to race live in 2011. Only when the NEHBPA advised of its intent to exercise its right under state law to deny permission to simulcast NYRA (Aqueduct) signals, did Suffolk Downs at least commence discussions. In the negotiations that followed, Suffolk Downs suggested that it was unlikely to attract sufficient horses to conduct a live racing meet in 2011, unless a daily purse distribution of $100,000 was paid. This purse level would still cause Suffolk Downs to have the lowest purses in the northeast (chart 1 of Suffolk Downs), nearly 20% lower than any other track listed on Chart 1. The NEHPBA agreed with this position of Suffolk Downs. Yet Suffolk Downs has publicly stated it intends to race 100 days at a purse level of $75,000 per day after telling the NEHBPA a purse level of $100,000 per day is required to attract a sufficient horse population to conduct live racing.
12) SUFFOLK FACT: The HBPA has said it will not work with Suffolk Downs to change the statute to reduce the number of live racing days.
THE TRUTH: The statement is accurate. It is not in the best interests of the NEHBPA and the Massachusetts breeding and farm industries that the number of live racing days be reduced.
13) SUFFOLK FACT: The HBPA has demanded Suffolk Downs commit to $10,6 million in purses for the 2011 meet, requiring that Suffolk Downs’ owners fund purses well above our statutory obligation and traditional enhancements.
THE TRUTH: The NEHBPA continues to seek an equitable share of gross revenue, consistent with revenue-sharing practices of virtually every other track in the United States. If gross simulcasting revenue is divided 50-50 as the NEHBPA has proposed, the NEHBPA projects purse funding to be in the range of more than 10 million dollars, sufficient to pay the amounts sought by the NEHBPA.
14) SUFFOLK FACT: As of January 28th, the HBPA withdrew its consent for the NYRA signal to be sent to MA tracks, including Suffolk Downs, making it more difficult for Suffolk Downs to generate purses.
THE TRUTH: Suffolk Downs has been allocating not more than 35% of the simulcasting commissions earned from the NYRA signal to purses, so that the revenue impact on purses of the loss of this signal is not likely to be significant.
ADDITIONAL INFORMATION:
Suffolk Downs has been contacting NEHBPA membership by telephone and letter, making statements of alleged facts that actually represent its view of the facts as set forth above. If the simulcasting revenue were shared as now proposed by the NEHBPA, purse funding for 2007 through 2010 would have been 4.2 million higher than the purses actually paid. Revenue sharing consistent with the practice of virtually every other jurisdiction will result in sufficient revenue to pay purses at the level now proposed by the NEHBPA.
If Suffolk had tried to negotiate a contract for 2010 that provided for purses as it actually paid that year, it probably would not have been able to conduct a meet. NEHBPA membership would have been forced to find other places to race. Simply put the purses paid were not sufficient to pay the costs of caring for the horses and provided absolutely no chance to recover any of the costs of breeding, development or purchase of the thoroughbred.
When Suffolk advised the NEHBPA in 2010 it would not sign a purse contract, it represented it would pay the same purses as 2009 and published a purse schedule consistent with that representation. It represented it would negotiate with the NEHBPA in the event it later determined that due to decreases in revenue it could not maintain that purse structure. So NEHBPA membership came to Suffolk Downs and raced without a contract relying on these representations. Later in the meet, Suffolk reduced purses significantly when it was too late for many of its members to go elsewhere. Shortly prior to making this unilateral purse reduction, officials of Suffolk Downs enticed horsemen stabled in Virginia to ship to Suffolk Downs to race following the conclusion of the meet at Colonial Downs. The purse cut was then announced by Suffolk Downs, as these horses arrived at Suffolk Downs. None of these horsemen would have shipped to Suffolk Downs, if the intent to cut purses had been
announced prior to shipping. Suffolk Downs refused the request of the NEHBPA that it compensate these horsemen for the significant shipping costs incurred in reliance upon the purse schedule exhibited to them to induce them to come to Suffolk Downs to race.
RACING IN 2011 WITHOUT A PURSE CONTRACT
At the last negotiating session, Suffolk Downs for the first time announced it intended to race in 2011 whether or not a purse contract was reached. It indicated it intends to pay purses at the statutory minimum. The NEHBPA believes that in 2010 Suffolk Downs refused to negotiate a purse contract with the intent it would unilaterally cut purses as it subsequently did. Representations made that the 2009 purse level would be maintained were not kept.
For 2010, the minimum purses required to be paid by statute were less than $5 million and more than $400,000 came from the Massachusetts Purse Pool, a funding source not likely to provide significant finding in 2011. The balance of the “Earned Purses” by Suffolk Downs’s calculations resulted from contractual obligations which will not exist in 2011 in the absence of a purse contract. The NEHBPA believes, in light of the actions of Suffolk Downs to date and its failure to act consistent with its representations relative to 2010 purses, that horsemen cannot rely, in the absence of a signed contract with the NEHBPA, upon Suffolk Downs to pay any particular level of purse funding in excess of statutory minimums. The NEHBPA projects statutory minimums to be no more than $5 million in 2011 so that the purses required by law to be paid by Suffolk Downs will average not more than $50,000 per day. To the extent that Suffolk may initially publicize a higher daily purse distribution, based on its conduct in 2010, a significant reduction in daily purse distribution should be anticipated during the course of the meet.
SUMMARY
When the NEHBPA began discussions with Suffolk regarding 2011, it advised that although it had been granted dates, it wanted to preserve its option not to conduct a live meet by later refusing the dates. It proposed an agreement not to race live in 2011 and accumulate purse revenue towards 2012. When the NEHBPA advised that this issue was nonnegotiable, Suffolk Downs refused to bargain until the NEHBPA threatened to revoke permission for the NYRA signal. When Suffolk Downs finally began bargaining, it offered only proposals which it knew would have to be rejected by the NEHBPA.
The NEHBPA exercised its legal right to withhold permission for transmission of the NYRA signal only after all other alternatives had been exhausted. It recognizes that this action may not meet with the approval of the betting public but the right was conferred by the Legislature to provide the NEHBPA a remedy intended to force Suffolk Downs to the bargaining table. The lack of good faith bargaining by Suffolk Downs has been evidenced by its refusal to bargain last year, its refusal to negotiate for 2011 until the NEHBPA advised of its intent to act as it has now been forced to do, and the posture adopted by Suffolk Downs
once it was forced to the table . Despite the requirement to bargain for a division of simulcasting revenue between 4% and 7.5% of the handle, Suffolk has not moved from its 4% minimum position and has recently advised that in the event the NEHBPA does wish to negotiate the percentage, it should be prepared to make a corresponding reduction in the revenue paid to purses from non-statutory sources (so that the total purse value does not increase beyond Suffolk’s present position). Suffolk Downs sought an agreement not to race live in 2011. When the NEHBPA rejected the idea, Suffolk adopted a bargaining position intended to result in an inability to race live in 2011 due to lack of a purse contract and inadequate horse population resulting from its prior failure to keep its representations and its bargaining posture to date. Its refusal to even negotiate last fall has made it more difficult to attract horses, as NEHBPA members presently need to make stall applications at other tracks at this time. The NEHBPA firmly believes that Suffolk Downs wanted to simulcast without racing in 2011 and has consistently acted to achieve that objective. Despite the actions of Suffolk Downs to date, the NEHBPA continues to exert every effort to bring this impasse to a prompt and reasonable resolution.
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