09/01/2008 11:00PM

Fighting words from Stronach


TUCSON, Ariz. - Heavyweight fights are not what they used to be, but racing has a beauty on its hands right now.

With Churchill Downs in one corner and Magna Entertainment in the other, this one matches racing's two biggest giants.

It turned into a battle last week, when Frank Stronach in effect challenged Churchill by lending support and endorsing the people Churchill has called "conspirators and price-fixers," and is suing in federal court for alleged antitrust violations.

At the center of the ring is the Thoroughbred Horsemen's Group, which represents 18 or 19 horsemen's associations, and leaders of the Kentucky and Florida HBPA, among others.

Churchill is suing them for what its lawyer David M. Schiffman says is "price-fixing, pure and simple." Churchill accuses the THG of being "ringleaders" of an alleged conspiracy to unlawfully increase revenue shares from Internet, telephone, and mobile wagering devices.

The horsemen have cited their rights under the Interstate Horse Racing Act of 1978, but Schiffman says that act contains no exemption from antitrust laws and does not say that horsemen's rights are "absolute, without regard to other federal statutes."

This was a fight between the two combatants, Churchill and the horsemen, until last Thursday, when Magna announced it was "continuing discussions with the Thoroughbred Horsemen's Group aimed at improving the economic condition of the horse racing industry through the development of more equitable pricing and distribution models for advanced deposit wagering."

The release was not merely a corporate statement. It went on to give the strong personal views of Stronach, Magna's chairman and CEO.

Gray, as most know, is not Stronach's favorite color. He much prefers black or white, and he left no doubt where he stands on THG, at least at the moment.

"We welcome the opportunity to work with the THG as a national agency assisting local horsemen's groups," he said, adding, "We are having very constructive conversations with Bob Reeves and Wilson Shirley of the THG. We all understand horse racing faces major challenges, and I personally believe that a national horsemen group could be very beneficial in addressing major national issues like advanced deposit wagering pricing and distribution strategy. I am hopeful that in the near future we will develop a new framework which will improve the economics of the horse racing industry for both racetracks and horse owners."

If Churchill had hoped for track unity in its battle, it would appear that Stronach - its joint venture partner in Tracknet - dashed the hope by embracing its legal enemy of the moment. His expression of endorsement for THG, and warm embrace for Reeves and Shirley, both included in the Churchill suit, had to be about as welcome in Louisville as Gustav on the Gulf Coast.

Owner held accountable in Ontario

An interesting racing commission decision in Ontario.

Woodbine Entertainment chose to deny the entry of horses owned by Antonio Chiaravalle, a Standardbred licensee in good standing with the commission, who owned 12 horses. One of them turned up positive for EPO in out-of-competition testing. The commission suspended the trainer, Brett Robinson, for 10 years, and fined him $40,000. Two days later, Woodbine barred Chiaravalle's horses. He appealed to the commission, saying he knew nothing of the use of illegal drugs on his horses, or actions of his trainers.

The commission disagreed. No sanction or penalty was imposed on Chiaravalle, but the commission ruled that owner responsibility in horse racing does exist, and that commission rules specify that "participants shall be guilty of a violation of the rules for any misconduct injurious to racing and for any misconduct prejudicial to the best interests of racing." It said "misconduct" means "unacceptable behavior," active or passive, and that its rules do not permit an owner to disclaim responsibility for his horse by asserting, "Look to the trainer."

In its 14-page review of the case, the commission said owner responsibility will continue to evolve through the progression of illegal substance cases "for no reason other than it is the future of horse racing."

Chiaravalle has owned horses for 32 years, with ownership interest in some 195 that have won approximately $14 million. He told the commission that he had reinvested about $8 million in the industry, and his horses had been involved in one prior infraction.

The commission found that the Robinson positive was the fifth positive test for Chiaravalle's horses, and cited other statements it called inaccurate. It noted five Chiaravalle trainers had been suspended at one time or another for illegal medication violations, and that three of them were serving long-term suspensions.

The commission concluded that if Woodbine's decisions were premised on reasonable business considerations and are aligned with the overall public interest in presenting and preserving a fair racing product, it should have commission support, and it dismissed Chiaravalle's appeal for relief.