Saturday, May 10, 2008

CDI What A Mess! ............and late racing

At Churchill the racing industry infighting continues. The issue? - money what else? I won't even get into the situation at Calder. I'll limit my comments to the situation at Churchill Downs. CDI has announced it will cut purses 20% effective May 14 (BH). Specifically the cut will be in overnight stakes. This is obviously meant to punish it's local community of horseman. Overnight stakes, in my opinion, make up the most important pool of purses for horseman at each particular track. That is because although the purses are substantially increased from those usually at a track they are not so high that they will usually lure out-of town entries. Certainly not those from far out of town. This has the effect of injecting the money back into the stabled community keeping it healthier. If you can't make money you won't stick around. For those who don't have a stable with graded talent (most of them) it is a chance to stay alive. This move by CDI is a thinly veiled attempt to whip it's horseman into submission. Here' how CDI put it:

“We have been left with no option but to reduce overnight purses to offset the amount of lost handle because Kentucky horsemen have prevented horse racing fans from wagering through ADW platforms,” Churchill Downs president Steve Sexton said in the release. “We are disappointed because the failure to send the signal will negatively impact the product both on and off the racetrack. While we are still hopeful this impasse can be resolved, we have no choice but to act now.”

The cut the horseman are asking for is one third the revenue (DRF). That seems reasonable to me. They are the ones getting up every morning, are in care of the product, take the risks and quite simply put, they put on the show. Without them there is nothing to sell.

It's amazing to me that horsemen cannot form a stronger front. It seems to me that all the power is in their hands yet they always seem to be negotiating from a weaker position. In some ways they do it to themselves. Here's an example:

Horsemen in Kentucky are being represented in their negotiations with Churchill over the account-wagering rights by the Thoroughbred Horsemen's Group, a company formed last year to seek a higher cut of the revenues from in-home betting. Officials of the Thoroughbred Horsemen's Group have said that they will not give approval to send the signal to or XpressBet unless horsemen receive one-third of the revenue from the services.

Flannery confirmed that Churchill is no longer seeking to negotiate with the horsemen's group over the signal rights, and that they have instead sought to conduct negotiations with the Kentucky Horsemen's Benevolent and Protective Association, which represents the majority of trainers at Churchill. Two weeks ago, Churchill sued the Thoroughbred Horsemen's Group, alleging that the company was violating the Sherman Anit-Trust Act.

The way I read this is that CDI didn't get the result they wanted from talking to the appointed negotiating party so they decided to find a different party of horsemen to negotiate with. One that may be more amenable to bowing to their will. I decided not to finish law school so I don't know enough about The Sherman Anti-Trust Act but you can look at it for yourself and make up your own mind. I would question who is in violation. Perhaps the best defense is a strong offense! But my question to the horseman is: why don't you just form one strong representative body so that you can conduct strong negotiations based on agreement among your membership? The negotiations hardly seem legitimate if they can't be enforceable. And how can they be enforceable if an agreement is made with a body that does not represent the affected party? Is there any wonder why the industry is in the mess it is?

In that same DRF article I found it very interesting that Since last year, Churchill has declined to make its handle figures publicly available except in quarterly and annual financial reports. I'm amazed that that's legal. Aren't they publicly traded? As I said I'm no expert on these matters.

None of the talk of percentages, takeout, ADW's, OTB's -I can go on - is made very clear. We are never given any concrete numbers or facts. There is absolutely NO transparency. That is what the industry needs! Make all parties legally responsible to make ALL and EVERY dollar amount public! Income, costs, payouts, cuts etc... Maybe they need to be regulated. Mention regulation with an honest possibility of it occurring and maybe we'll get a true picture of what's happening. It all is presented in way that is much more complicated than it seems it should be. I'm sure that's no coincidence either.

As ever, when there is an argument in the industry the fan suffers. In this instance by the inability to watch the races or to wager on them. If the situations continues by the reduced quality of racing. In the long run the industry is self destructive.

Have you ever wondered if the tote is true? I have been to the track on some big days and I look at the pools and I think there's no way that's all that's in the pool! I guess I don't trust any of them. Ever wonder how some of these entities are able to give the rebates to those large off-shore parlors? Does that come out as an operating expenses before the takeout is figured? I want to know how it works and will continue to try to make sense of it all. Right now I'm just thinking out loud.

On a lighter note there is another interesting article on the Bloodhorse site today about injuries. I was particularly interested about the information that 4 year olds have the highest incidence of catastrophic injuries. Now at face value this seems counter intuitive. But, when I thought about it more I had to wonder how many of those horses had run at 2 and 3? And of those it is reasonable to assume that they were good or valuable enough to hang around. So the injured,weak or the poor runners have already been culled out. There is a good possibility that the fact that 4 year olds are more likely to break down is another reason not to run them early. Let's get some stats on the percentage of horses that have broke down at 4 that did not start until three. Then we can compare that to horses started at two and we may have something valuable. Facts and statistics are seldom as clear as they appear to be.

Late Notes:
We all saw Casino Drive blow away the field in the GII Peter Pan. A very impressive victory, yet I can't say the field was a very strong one. But that was also said (not by me) about the Derby Field. Nonetheless, it does set up the very exciting possibility of Better Than Honor being the dam of three consecutive Belmont Stakes winners. What odds would you have given to take that bet? I'm sure we would have all spent the take already! I would have bet against any mare having produced three consecutive Belmont starters! Amazing! Patrick at Handride had an entertaining take on the race.

I was also very impressed with Lucky Island in The Bold Ruler (GIII). He really had to grind it out for a while in the stretch, maintained his poise and intensity to be much the best at the finish.
In the Lone Star Derby (GIII) El Gato Malo proved he is not going to go away. He ran into a bit of trouble coming round the final turn. there was some bumping and it looked like he was being pinched but he fought on determinedly and got the job done. A pretty gritty performance. I love to see a horse that doesn't quit in situations like that.

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