Simulcast revenue divides horsemen Five-percent dispute splits thoroughbred, harness industries

November 19, 1997|By Kent Baker | Kent Baker,SUN STAFF

Beginning today, thousands and thousands of dollars in simulcast revenue will be forfeited by the Maryland horse racing industry.

All parties involved in a disagreement over the division of that revenue will lose. If the schism lasts indefinitely, thoroughbred and harness racing in the state could be battling for survival.

But after two years of negotiations, their positions have hardened and no one seems willing to budge.

When the Maryland Racing Commission meets today at Pimlico Race Course, it will cast a jaundiced eye at the situation. Also at stake could be an $11 million aid package to racing from the state legislature. Thoroughbred and harness officials worry that if they can't resolve their dispute, lawmakers will be less inclined to provide that economic support. The proposed aid would be $7.7 million to thoroughbred racing and $3.3 million to harness interests.

Joe De Francis, chief executive officer of the Maryland Jockey Club, which operates Pimlico and Laurel Park, has recommended taking the impasse to binding arbitration.

So far, there is no indication that either Cloverleaf Enterprises, the horsemen's group that operates harness racing at Rosecroft Raceway, or the Maryland Thoroughbred Horsemen's Association (De Francis' horsemen) will agree to arbitration.

Because negotiation hasn't resolved the situation and arbitration is apparently not palatable to anyone except De Francis, the stalemate continues.

* Crux of the dispute: Cloverleaf wants 70 percent of the proceeds from nighttime simulcasting of out-of-town thoroughbred racing, with 30 percent going to the Maryland Jockey Club. That has been the split the last few months under an extension of the "facilities use" agreement that expired Saturday.

The harness interests call that their "best and final offer," and the MTHA, which shares the thoroughbred side of the expenses of running the simulcast network, is offering 65 percent.

The 50-50 division of revenue from daytime simulcasting of harness racing remains intact and is not in dispute.

Meanwhile, De Francis said he is the only one who is "willing to give up money."

For the thoroughbred horsemen, the difference of 5 percent represents roughly $200,000 annually.

Simulcast wagering represents 65 percent of each day's handle at thoroughbred tracks and off-track betting parlors, almost $300 million last year.

* Offshoots: In addition to the possible loss of revenue and the state aid, Maryland's OTBs would suffer considerable damage.

"We're hanging in there, but there is no doubt that not having thoroughbreds at night is going to have a big impact on our betting," said John "Pappy" Poole, proprietor of the Cracked Claw in Frederick County, the busiest OTB.

"Having that keeps 100 people here who have been betting on the daytime racing. They stay and bet on harness, too. Shutting down at 6: 15 will hurt."

Jimmy Bomba, proprietor of Poor Jimmy's OTB in Cecil County, rents to the Maryland Jockey Club, which runs the site.

But, he said, "naturally if we don't do racing business, my food and beverage sales are going to fall off badly. If we don't have thoroughbreds at night, we're going to be in trouble."

* Maryland Jockey Club: The original simulcasting deal 4 1/2 years ago had harness interests keeping all the harness profits and thoroughbreds doing the same.

But those numbers changed because of the complications of dealing with so many different out-of-state entities.

"It worked pretty well for a long time," said De Francis. "We generated more money for purses than ever and enough to keep all three of our stable areas [Pimlico, Laurel and Bowie] open."

The addition of more OTBs and televised tracks led to harness interests' wanting to renegotiate. De Francis said: "We had to figure out a way to make the pie bigger." He said he gave ground to keep the system together.

When Cloverleaf sold Ocean Downs to Bally's, De Francis lost the revenue from the Eastern Shore track because Bally's terminated their simulcast agreement.

After the temporary 70-30 split was negotiated, the MTHA balked at the deal and at its November meeting said it was "contributing too much money to expenses," according to De Francis. "That was very discouraging."

De Francis is also concerned that Maryland will lose export markets for its racing and, as a result, fans.

"We can't afford to sustain thousands of dollars in losses for more than a matter of days," he said. "This situation has to be resolved quickly."

* Maryland horsemen: Rich Hoffberger, president of the MTHA, said: "You can't have deals that are not profitable. Every time we have met with the harness people, they have stood on the 70 percent. They say, 'Give me this or go away.' It doesn't seem a good way to negotiate."

He said that thoroughbred interests "did not cancel the deal. We agreed to the extension and then to pay them more money than a couple of months ago."

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