Once again, the owners of the Maryland Jockey Club have had their hat summarily handed to them by the Maryland Racing Commission.
After having their initial plan rejected by the Maryland Racing Commission on November 29 , the owners of the Maryland Jockey Club (MI Development, Inc. and – for all intents and purposes, Penn National Gaming, Inc.) scrambled to produce a plan that would be palatable to Maryland’s racing interests.
At 5 p.m. on Monday, December 20th, with the Maryland Racing Commission hearing the next day, MID submitted their proposal to the Maryland Thoroughbred Horsemen’s Association and the Maryland Horse Breeders Associations – each of which would have to agree to a laundry list of concessions – and to the Maryland Racing Commission, who would have to then approve the plan pending approval by all parties.
In the Jockey Club’s plan, the Jockey Club would agree to 146 days of racing (a combination of spring and fall dates) if, and only if, the horsemen agreed to give up all their simulcasting rights, the MTHA agreed to kick in $1.7 million dollars towards operating costs by August, MTHA and MHBA agreed to support closing Bowie (with no guarantee of training stalls at either Laurel or Pimlico), and the MTHA and the MHBA agreed to pony up the funds to lobby for Jockey Club legislation, which would include lobbying to close Bowie and lobbying to allow funds set aside by state mandate for capital improvements to be used for operating costs. Even if the horse groups agreed to all of these demands, the Jockey Club plan explicitly reserved the right of its owners to cancel racing after the Preakness at any time, at their own discretion. The plan read like a refreshingly honest hostage ransom note: “we demand all of this money, but we reserve the right to kill the hostage.”
Not surprisingly, the leaders of and the workers in Maryland racing were apalled.
A Love For Maryland Racing
Approximately 500 horsemen and onlookers attended the Dec. 21 Racing Commission hearing in Laurel Park’s Carriage Room. T.V. camera crews and reporters flanked the commissioners. Seated in the front rows were the titans of Maryland racing, including a phalanx of representatives from Penn National Gaming. Behind them sat the trainers and breeders, stable owners and horse owners, vets, store owners, bloodstock agents and other industry professionals. Ringing the room were the backstretch workers. And keeping a wary eye on all were the employees of the track itself: the security guards, the office workers, and the track catering staff, who would replenish the coffee and drinks during the four-hour meeting.
MID CEO Frank Stronach made a rare appearance to plead before the Racing Commission, declaring over and over his love for Maryland racing and begging for just a little more time for “reasonable minds and cooler heads,” arguing that he just needed the horsemen to meet him halfway, rationalizing that a signed agreement would allow everyone a few more months to work out the details for a long-term arrangement.
Did he really believe what he was saying, or was this just another dog and pony show to convince the Commission of the sincerity of MI Development and their partner, Penn National? Regardless of whether or not he believed himself, none of the horsemen believed him.
Perhaps Stronach is positioning himself to be the innocent martyr, casting Maryland horsemen as the collective bad guy for being unwilling to meet the Jockey Club “halfway,” for refusing his “reasonable” offer of a few more months to “work things out.” Maybe he knows that this is all, ultimately, not going to end well, and this is his attempt to preserve his own dignity.
Whatever the case, his pleadings did not fall on the proverbial deaf ears. His claims of caring about Maryland racing, of being reasonable, and of being a good horseman himself were met with muffled jeers from the crowd.
The commissioners tried to treat the Jockey Club proposal with a modicum of respect, although it was clearly difficult for them, and their frustration and disgust would occasionally bubble up and out.
They attempted to ask clarifying questions, specifically directing the questions to beleaguered MJC president Tom Chuckas. But Stronach never allowed Chuckas to answer the questions directly, instead dominating the mike for rambling and emotional diatribes laced with platitudes, ricocheting back and forth between his love for Maryland racing and his distain for Maryland horsemen.
“Insult to Maryland Racing”
Eventually, the commissioners essentially had to dismiss Stronach in order to hear formally from the horsemen. Representing the Maryland Thoroughbred Horsemen’s Association were attorney Alan Foreman, president Richard Hoffberger and executive secretary Wayne Wright. There for the Maryland Horse Breeders were president Tom Bowman, executive director Cricket Goodall and lobbyist Dennis McCoy. A dispirited exhaustion permeated, punctuated by moments of exasperated anger.
For the record, and in order to justify their rejection of the Jockey Club’s proposal, Alan Foreman traced, in detail, the dreary demise of racing relations and the trail of broken promises.
The proposal submitted by the Maryland Jockey Club at 5 p.m. the night before was firmly rejected by MTHA and MHBA.
“They didn’t play by the rules, didn’t submit the application [for slots] on time, and didn’t submit the check [application fee]. And we shouldn’t have to pay for that failure,” declared Foreman. Foreman noted the MJC’s so-called agreement reserved all rights and all monies for the tracks, but yet MJC would bear no liability if MJC broke the agreement, which the agreement explicitly allowed them to do at their own discretion.
“This agreement is an insult to Maryland Racing,” said Foreman. “If there is no Preakness, it is not our fault.”
In questioning the MTHA and MHBA leaders, one of the commissioners asked Bowman if Stronach ever offered to move four stallions to Bowman’s Maryland breeding farm. Bowman verified that Stronach approached him about that prior to the November elections, but noted that after the referendum failed, Stronach instead moved the stallions to New York. While never stating outright that Stronach was attempting to strong-arm Bowman, the unspoken accusation hung heavily in the air.
“Mr. Stronach, I really don’t think you are the horseman you think you are!” declared clearly disgusted commissioner David Hayden (owner of Dark Hollow Farm).
Finally, after noting that the MTHA has never been a proponent of increased government reach, Alan Foreman stated: “If it means asking the Governor to exercise eminent domain, then let’s do it.”
The commissioners then heard from Steuart Pittman (president of the Maryland Horse Council and owner of Dodon Farm and Retired Race Horse Training), who echoed the industry’s sentiment that it was time for new ownership by any means, either by the current owners voluntarily selling the tracks or by the Governor exercising eminent domain.
Christy Clagett (a licensed Thoroughbred trainer and owner for the training and breeding farm Larking Hill; also a director of both the Maryland Horse Council and the Maryland Steeplechase Association, and a former director of MHBA) presented a petition from the backstretch workers urging the Maryland Racing Commission to reject any business plan that would include Penn National as an owner.
Thoroughbred breeder Cynthia McGinnes (Thornmar Farm, Chestertown)presented an analysis of Penn National’s stock, provided by Morgan Stanley, stating that she believed that if Maryland racing is killed, Penn National’s other businesses would profit, hence giving the minority owner of the Jockey Club an ulterior motive to induce a negative outcome.
Jim Steele, manager of the Thoroughbred breeding farm Shamrock, chairman of the Maryland Horse Industry Board, and a former director of the MHBA, took pains to note that he was speaking only for himself, as an individual. Steele simply questioned the sincerity of Mr. Stronach’s intentions, noting that while it is reasonable that Mr. Stronach does not want to lose money it is baffling then that he would refuse to sell a money-losing company, particularly when there were entities willing to buy the tracks.
Only one horseman spoke in any way that might remotely be considered supportive of the Maryland Jockey Club’s plan. After noting that he agreed with what every horseman had said, he still wondered if the horsemen shouldn’t find some way to agree to maintain racing at least through the Preakness, to buy a little time. The crowd shouted, “No!”
An increasingly emotional Stronach declared his love and dedication for Maryland, angrily declaring, “Even when I am insulted, if I didn’t care, I wouldn’t stay!” Then he stormed out, trailed by worried-looking assistants, his minority partners from Penn National looking aghast.
The commissioners asked the Penn National representatives if they would like to speak in defense of the Jockey Club proposal. The Penn reps assembled themselves before the commissioners, and then launched into a somewhat bizarre monologue, stating that, officially, “Mr. Stronach is our spokesman,” but also distancing themselves from Stronach by noting that “the proposal before you is largely by Mr. Stronach.”
They then went on to present essentially a commercial regarding the benefits of doing business with Penn National, noting that they are a profitable and successful gaming company, the second largest domestically. They noted that they have been supportive of slots in Maryland ever since the idea was first floated almost a decade ago. The blamed the MID (known as Magna at the time) for dropping the ball on their slots application, but then blamed the legislature for “creating a jump ball situation to begin with.” They indicated that they should have taken action when Magna dropped the ball, but didn’t expect Magna (today, MID) to drop that ball.
The refuted the allegation that they were intentionally trying to kill Maryland racing, noting that they did not need more horses at their West Virginia or Pennsylvania tracks, those tracks are doing just fine, thank you very much.
They defended Stronach’s passion and intentions, even while noting, “we have differences in style, but his intentions are good.” They declared that all they want is to build a great future for racing here in Maryland, and the question was just how to best do that.
The commissioners refuted Penn’s wide-eyed claims of innocence and good intentions. Chairman Ullman went straight to the heart of the matter: “If you had spent the time and money that you spent on the referendum on coming up with a working plan for racing, we wouldn’t be in this position.”
When Penn National vice president Steve Snyder started shifting the blame, an exasperated commissioner John McDaniel interrupted him: “You have antagonized everyone in this state with your continuing arrogant ways!” A seemingly contrite Snyder apologized and attempted to then placate the increasingly impatient Commission. After another Penn National representative accused the Maryland Racing Commission of intentionally misinterpreting documents, Senior Assistant Attorney General Bruce Spizler, in excruciating detail, reviewed the events leading up to the signing of said documents and the events after the signing of said documents, dispelling any notion that there could have been any misinterpretation, intentional or otherwise, of any documents.
After listening to Penn National, the Commission recessed.
After the chairman resumed the hearing, Maryland Jockey Club president Tom Chuckas asked to present a new plan to the Commissioners, but the MTHA and the MHBA said they were in no position to consider a new proposal.
The Commission rejected the Jockey Club’s request to submit a new proposal, and continued forward with the proposal on the table.
And then, one by one, the Maryland Racing Commissioners unanimously rejected the Maryland Jockey Club’s proposal, and the hearing was adjourned.
Shortly thereafter, Governor O’Malley’s office issued a plea for the Maryland Jockey Club to present an acceptable plan, warning that he will seek legal recourse if MJC fails to do so.
And as of midnight, December 21, 2010, there is no 2011 racing at Laurel and Pimlico, and there is no Preakness.
As this news blog goes to press, we understand that MJC, MTHA and MHBA are furiously working out an agreement. If they do come to terms, the proposal will then need to be submitted to the Maryland Racing Commission for approval.
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