01/10/2005 12:00AM

Guild revenue had sharp decline in 2003


LEXINGTON, Ky. - Revenues for the Jockeys' Guild declined 31 percent to $4.7 million in 2003, down from $6.8 million in 2002, according to the Guild's 2003 financial filing with the Department of Labor.

The decline in revenue, along with a 17.3 percent increase in expenses and disbursements, left the Guild with $3.3 million in cash at the end of 2003, compared with $4.2 million at the end of 2002, according to the document, which was filed nine months late, on Dec. 22, 2004. The document is considered a public record and was provided by the Department of Labor on Monday.

Details of the Guild's financial status have become a source of controversy at a time when the Guild is pressing for an increase in accident coverage. Most notably, officials of the Thoroughbred Racing Associations and the California Horse Racing Board have said that their organizations are considering whether to withhold approximately $3.2 million in payments to the Guild this year unless the organization provides detailed financial statements describing how the Guild spent the contributions. The jeopardized payments would account for more than 68 percent of the Guild's revenues in 2003.

Guild officials, who have not yet responded to the requests from the TRA and CHRB, according to officials of the organizations, did not return phone calls Monday.

According to the filing, the decline principally came from a 44 percent reduction in revenue from dues, from $1.15 million to $650,000, and a 65 percent reduction in other assessments, from $1.83 million to $641,000.

Jockeys' dues are described as being $100 per year in the 2003 filing. It is believed that revenues from assessments also come from jockeys, in the form of per-mount fees. The Guild requires members to contribute either $3 or $10 per mount. The higher fee makes a rider eligible for a health insurance plan, provided by the Guild, that does not cover accidents that occur on the racetrack.

Revenues from media rights in 2003, according to the filing, were $1.62 million. That revenue is provided by TRA tracks, which pay the Guild throughout the year based on the number of mounts and racing days at each track. The payments were originally made in exchange for jockeys giving up their broadcast rights for the purposes of simulcasting, but that contract expired in 2002. TRA tracks have continued to make the payments despite the lack of a contract.

TRA officials have estimated that the tracks make $2.2 million in payments each year to the Guild. Chris Scherf, an executive vice president of the TRA, said the organization does not keep an overall accounting of the payments and said he did not know if the $1.6 million number was accurate.

The Guild's management was assumed by Matrix Capital Associates in 2001. Matrix is owned by Dr. L. Wayne Gertmenian, the president of the Guild. Gertmenian, whose contract was extended through 2008 at the Guild's annual meeting in December, drew a salary of $151,250 from the Guild in 2003, according to the filing. The Guild's vice president, Albert Fiss, received $101,000 in 2003.

Audited financial statements for 2003 that were distributed to members of the Guild at the December meeting listed the revenue from media rights as $2.3 million that year. A copy of the statement was obtained by DRF.

Although the reason for the discrepancy is unclear, it is likely that the two numbers are different because the Guild used different accounting methods for the two documents, a typical source of discrepancies between financial statements.

A number of other discrepancies between the two documents exist, including the dollar amounts of the Guild's assets, liabilities, and cash at the end of 2003. Also, in the Department of Labor filing, the Guild said it had 1,560 members at the end of 2003. The audited statements claim that the Guild represented "approximately 1,100 riders" during 2003. A statement on the Guild's website says the organization currently has 1,259 members.

According to the Labor filing, the Guild paid $1.2 million for "additional supporting services" and "regulation and promotion of racing" in 2003, compared with $843,000 for the same categories in 2002. Those categories, which did not appear on any filings before Matrix took over the Guild, are not broken down into detailed expenses.

According to a separate filing with the Department of Labor - a document that lists all individuals and businesses that were paid by the Guild - Matrix was paid $365,703 in consulting fees and $10,200 in rent in 2002. The document listing payments for 2003 has not yet been filed.

The Guild paid $167,000 in rent in 2003, according to the 2003 filing, up from $105,279 in 2002 and $67,138 in 2001, the last year the Guild was based in Lexington. The Guild offices were moved to Monrovia, Calif., in 2002, six months after Gertmenian and Matrix took over management of the Guild.