In separate actions yesterday, the boards of directors of the Maryland Thoroughbred Horsemen’s Association (MTHA) and Maryland Horse Breeders Association (MHBA) approved the framework of a deal to govern racing in the Free State for the coming decade, according to numerous sources. The framework reportedly is largely identical to a term sheet supported by the Maryland Jockey Club, which owns the state’s two major racetracks. Lawyers for all sides are crafting the final legal document, and some details remain to be worked out.
If and when it is finalized, the long-term agreement will stand in stark contrast to the year-end battles that had characterized track-horsemen negotiations in recent years. Its 10 year term, perhaps the first such deal in the country, is expected to provide stability to an industry gradually regaining its footing after a long period of uncertainty.
The parties reached the agreement after a lengthy process facilitated by the state Racing Commission. At its November 20 meeting, a clearly concerned Commission had given the sides 10 days to reach accord. This morning, Commission chairman Bruce Quade lauded news of the growing agreement. “We left meetings this weekend hopeful that things would get worked out, and it appears that they have,” he said. A final agreement would “meet what we wanted to do when we started this process: achieve some stability in Maryland racing.”
Under the deal, racing would continue in 2013 under the same provisions that govern it this year. That means a 146-day racing schedule, with horsemen, breeders, and the state providing subsidies of more than $10 million to eliminate the MJC’s losses.
In subsequent years, the MJC would guarantee a minimum of 100 live racing days; the horsemen and breeders could buy additional days at their discretion at a “true-up” amount designed to hold the racetrack financially harmless. For those additional days, the horsemen and breeders would bear any losses beyond the true-up amount and retain any profits generated. With slots subsidies, Maryland racing could thus maintain a 146-day schedule while providing record-high purses. According to trainer Katy Voss, a member of the MTHA board of directors and past president of the MHBA’s board, the provision would provide horsemen “the ability to control our own destiny… to craft what we think is the best program.”
The deal also calls for the closure of the Bowie training center, with Pimlico to reopen for training. Pimlico and Laurel would be open for training and stabling year-round at no charge to horsemen. The framework calls for the MJC to maintain a minimum of 1,600 stalls, including 300 new stalls at Pimlico, some of which would replace dilapidated structures slated to be torn down. In addition, the horsemen reportedly would build, at their own expense, 300 additional stalls at Laurel.
Finally, the framework contains a number of financial provisions designed to help the MJC stanch its flow of red ink. Foremost among these, all sides have agreed to modify how takeout is shared to provide the MJC 50 percent of takeout, up from the current level of 47 percent. The framework would allow the MJC to build or open new off-track betting facilities, and the company would receive 70 percent of the proceeds from those new facilities; existing facilities would continue at the current 50-50 split. MTHA board member Larry Johnson noted that, given both the financial troubles endured by the MJC and the flow of slots money to purses, the framework would create “an economically viable structure for both parties.”
The MJC also commits in the framework to making capital improvements to Laurel and Pimlico. Additionally, the horsemen would retain full control over simulcast signals, as provided in federal law. The MJC had sought to bring simulcast consent into the framework, but that proposal received an understandably chilly reception from horsemen and died on the vine.
Horsemen greeted news of an agreed-upon framework warmly. Long-time Laurel trainer Ferris Allen called the agreement “a wonderful step in the right direction,” while Voss described it as a “huge positive.”
Many cited the stability of a long-term agreement as particularly important. Allen observed that the acrimony and last-minute wrangling of recent years had been like “having our own ‘fiscal cliff’ every year.” Tom Bowman, president of the MHBA, agreed. “As far as I’m concerned, the fact that we can hang our hat that live racing will continue for at least a decade is essential,” he said. “This would give Maryland stability it hasn’t had in a long time.”
There is, of course, work to do, and some sounded notes of caution that a framework is not an actual agreement. Still, the mood among horsemen was markedly optimistic. “I’m elated,” Bowman said. “I’m elated that this final part of the process is going as smoothly as it has so far.”