12/01/2011 12:19PM

Jockeys' Guild's support feeling the pinch

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LEXINGTON – The Jockeys’ Guild has pulled out all the stops over the last few months to draw attention to the decision by Churchill Downs Inc. to allow a contract providing $330,000 to the guild to expire at the end of this year, holding press conferences, submitting petitions, and sending letters to state congressmen critical of the decision. The strategy makes good sense for the guild, considering the size of the payment, but the efforts also obscure the fact that roughly three dozen other tracks do not provide the payments as well.

The non-paying tracks are by and large small tracks, and their individual contributions to the guild would pale in comparison to the payments from Churchill’s four tracks. But the breadth of the list of the non-paying tracks underscores the difficult road ahead for the guild as it seeks to expand the benefits it can provide to its members, in large part because of the fragile economic condition of the Thoroughbred racing industry, where many tracks continue to struggle.

Take Kentucky’s Turfway Park, which in 2004 hosted a national forum to discuss ways to help jockeys after the guild imploded because of a scandal involving its management. Turfway, whose business has seesawed over the last decade, had provided payments to the Guild in an agreement similar to the Churchill contract since 2002, but it has declined to renew the payments since then despite repeated inquiries by the guild’s current management.

The reason: Turfway has got financial problems of its own.

“I certainly understand their situation, but I think they understand our situation as well,” said Robert Elliston, Turfway’s president. “I have no problem with the guild, and I appreciate everything they are trying to do, and we’d love to help them, but times are tough.”

Racetracks have a long history of making voluntary payments to the guild, in agreements stretching back to the 1960’s. Back then, the payments were negotiated through the Thoroughbred Racing Associations, a racetrack trade group that represents nearly every major track in the U.S. But that agreement was canceled in 2002 after track officials expressed dissatisfaction with the management of the guild under former chief executive Wayne Gertmenian, a Pepperdine professor who provided erroneous credentials to the guild before he was hired and who then pushed the organization toward bankruptcy.

Following the cancellation of the TRA contract, tracks were on their own to negotiate new agreements, which have long been based on a non-legally binding recognition that the tracks are benefiting from the use of riders’ media rights. But few tracks struck agreements with the Guild immediately after the cancellation, waiting until the organization had cleaned house and filed for bankruptcy late in 2007.

In some ways, the decision by Churchill to allow the agreement to expire was unusual, considering the publicly traded company was one of the first to step up to the plate to reach a new agreement with the guild after the organization reorganized in bankruptcy court. Churchill officials have declined to comment on the decision to let the three-year agreement expire, other than to cite the cost of the deal.   

Terry Meyocks, the national manager of the guild, said this week that the Churchill decision will have a “huge impact” on the guild’s budget for 2012, but he also said the guild is in no danger of being pushed back into bankruptcy by the decision, citing the organization’s efforts to cut costs over the last several years and the additional revenue provided by an extraordinary jump in its membership dues over the last four years.

“We’ve been watching our P’s and Q’s since we filed for bankruptcy in 2007 and looking closely at the bottom line, and we’ll be all right,” Meyocks said.

The guild has two principal sources of revenue: the agreements with racetracks and dues from its members. With the exception of Churchill, most of the companies controlling the brunt of the racing days in the U.S. have renewed their agreements, including the New York Racing Association and the tracks controlled by the Stronach Group. Meyocks said the guild will push non-paying tracks to sign agreements by the end of this year.

Jockeys who join the guild must pay the organization $100 in annual dues and $4 per mount, with a cap of 1,000 mounts, or $4,000. When the guild filed for bankruptcy, its membership rolls had dropped to approximately 525; the ranks have swelled to 950 today, in large part because the guild has successfully pushed for sizeable increases in losing mount fees at dozens of tracks over the last three years. As a result of the increases, most jockeys are making more money each racing day, and the $4 fee for each mount isn’t taking as big of a bite out of their income.

As members, jockeys are eligible for disability payments from the guild and a life-insurance policy for their families, capped at $125,000. The disability payments kick in any time that a member is forced out of work by injury for at least eight days, and provide $200 a week from the guild and $200 in a matching payment from the track where the rider was injured, for a maximum of 104 weeks. Members also benefit from guild representation and advocacy in front of racing commissions, legislatures, and judges.

In one big area – health insurance for riders’ families – the guild is providing less than it did before filing for bankruptcy. The guild had previously purchased a health-insurance policy available to its members at lower cost than policies that riders could procure on the open market, but that policy had to be cancelled because of the guild’s financial problems. It’s important to point out that the expense of the policy was unsustainable – Gertmenian and his managers had raided riders’ savings accounts to cover guild shortfalls – and was a large reason the guild was pushed into bankruptcy in the first place.

While the guild currently allows members to apply for reimbursement for medical bills, Meyocks said the guild is still interested in providing riders low-cost access to health care through a group plan, an elusive goal not just for the guild but any organization in the U.S. these days. For that reason, Meyocks said it’s critical for Churchill and other tracks to contribute to the guild’s funding.

“People say, ‘Whose responsibility is it?’ I think it’s the industry’s,” Meyocks said. “We know that times are tough, but we have to find mandated ways to get these jocks and their families taken care of.”

Churchill and tracks that currently do not make voluntary payments to the guild point out that they carry sizeable accidental death-and-dismemberment policies covering racetrack accidents, and that they have invested in safety equipment and implemented policies helping riders as part of the National Thoroughbred Racing Association’s Safety and Integrity Alliance. Churchill, for one, carries a $1 million policy, as does Turfway Park. Elliston said that because of the dramatic increase in insurance costs over the last decade, the track’s $1 million policy costs three times as much as the $500,000 policy it replaced in 2002.

The silver lining out of this, perhaps, is that the guild appears to be financially stable and that the wounds opened in the Gertmenian era have healed – most racetrack officials praise Meyocks and the current guild leadership for their work stabilizing the organization. Unfortunately, because of racing’s economic problems, the guild will be hard-pressed to squeeze more juice from the lemon.

Brian Elmore, the general manager of Hoosier Park, one of the three dozen tracks that don’t provide payments to the guild, said the track can’t afford the fees, especially in light of the recent bankruptcy reorganization of the track’s own parent company. Still, Elmore said Hoosier, which has slot machines, would love to help the guild out.

“Everyone’s pinned down on their own expenses right now, and, unfortunately, what you can do isn’t exactly what you’d want to do,” Elmore said.