09/14/2011 2:08PM

Churchill Downs doesn't plan to renew pact with Jockeys' Guild

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Churchill Downs Inc. has notified the Jockeys’ Guild that it will not renew a four-year agreement that expires at the end of the year providing for payments to the Guild from the company’s four tracks, according to Churchill and the guild.

The notification has put the guild on alert that a primary funding source for its operations is in jeopardy at a time when many racetracks are struggling due to the persistent erosion over the last three years of pari-mutuel handle on races, the main revenue source for racetracks. The guild receives payments from the majority of U.S. racetracks under similar agreements to the one that Churchill has said it will not renew.

Terry Meyocks, national manager of the guild, confirmed that Churchill had recently declined to participate in negotiations sought by the guild to renew the contract. He declined to comment beyond saying that the guild felt Churchill’s decision was “unfortunate,” and he said that the guild “would keep its options open” when asked what the organization’s membership would do to counter the decision.

Julie Koenig-Loignon, a spokeswoman for Churchill, said the company’s four tracks contributed approximately $330,000 annually to the guild under the agreements, which provide for the payments based on a per-start fee. The contracts provide compensation to the guild in exchange for the guild declining to pursue payments for the use of riders’ television rights for simulcasting and promotional purposes.

Koenig-Loignon said that Churchill will continue to provide a $1 million accident insurance policy at all of its tracks. Koenig-Loignon also said that Churchill’s tracks have made investments to comply with the requirements necessary to be accredited under the Safety and Integrity Alliance, a National Thoroughbred Racing Association program that is funded by the racing industry.

“We believe we are paying our fair share to contribute to jockey’s health and insurance,” Koenig-Loignon said. She added that “a lot of the rules and protocols [for accreditation] concern jockey health and safety.”

According to the company’s financial statements, Churchill had net income of $16.5 million in 2010 on record annual revenues of $585.3 million. In addition to its tracks, Churchill owns a standalone casino in Mississippi and runs two casinos at Fair Grounds and Calder. The company also owns the largest account-wagering company in the United States.

The agreements have been a source of contention in the past, most significantly five years ago, when the guild was under the controversial leadership of Wayne Gertmenian. Because of objections to Gertmenian’s negotiating tactics, many tracks began threatening to cancel the contracts, leading to an acrimonious stand-off that eventually resulted in Gertmenian being fired and the guild filing for bankruptcy.

If the guild does not reach an agreement with Churchill – the host of this year’s Breeders’ Cup event in early November – jockeys could seek to claim that the company’s tracks cannot conduct simulcasting without a waiver of their television rights. However, the argument supporting the rights remains murky legally.