06/09/2005 11:00PM

Ky. breeders debate best awards plan


LEXINGTON, Ky. - When Kentucky Thoroughbred Farm Managers president Ken Wilkins opened a June 7 meeting about possible distribution programs for the state's new breeder awards fund, he said, "This is really a math problem."

The bottom line, he said, is a simple question: "How big is the pie, and how does it look split different ways?"

The issue of how to share a projected $10 million to $12 million in annual breeder awards is a math problem. As Wilkins and others discussing the distribution issue know, however, the debate over how to allot the funds is tied to the larger issue of how Kentucky's Thoroughbred industry can best attract new investors without alienating its stalwarts.

The Kentucky Thoroughbred Breeder Incentive Fund was created earlier this year and will be funded by the existing 6-percent state tax on stud fees. Money will start accruing in the fund on July 1, the same day that the Farm Managers Club, the Kentucky Equine Education Project, and the Kentucky Thoroughbred Association/Kentucky Thoroughbred Owners and Breeders are due to present the Kentucky Horse Racing Authority with a single distribution proposal. The Kentucky Horse Racing Authority will determine the distribution criteria by Jan. 6, 2006.

Three main proposals are currently under debate in the state's Thoroughbred industry: allot a flat award only for Kentucky-bred winners in Kentucky races, give a flat award for Kentucky-bred winners in North American races and in some international races, or create a tiered distribution system that would tie breeder awards - whether in-state, national, or international - to the purse value of the race won.

The real goal behind the awards program is to attract buyers and mare owners to Kentucky, not just to reward the breeders already in the state. Figures cited by Wilkins at the June 7 meeting suggested that flat payments under a Kentucky-only program could average about $16,000 per winner, compared to $2,700 for national/international distribution. Proponents of the national and international plan, however, say that widening the eligibility to Kentucky-bred winners outside the state will encourage investment by major breeders with far-flung Thoroughbred empires.

"One thing I think we don't want to have is a sort of equine welfare program," said longtime manager and breeder Henry White, who pointed out that major international breeding operations based in Kentucky contribute a great deal to the state's Thoroughbred economy, even when their stables may race elsewhere. White's concern, shared by other supporters of a national distribution plan, is that a Kentucky-only fund might encourage breeders to aim lower in quality rather than to breed horses that could compete in major races outside the state, too. He is also concerned that by limiting distribution to Kentucky, the awards will not benefit as many owners as it could, thus blunting the marketing effort to bring new breeders with national programs into the state.

"Under a national program," he said, "the people in Kentucky will also benefit."

John Sikura, owner of Hill 'n' Dale Farm, said he believes breeder awards for Kentucky racing only would create additional value for both the breeding and racing industries in the state.

"Racing and breeding are a full-time partnership, and we should advance both racing and breeding close to home," Sikura said. "The money was given from the legislature, and I think the intent was to stimulate and reward the local Kentucky Thoroughbred economy. But I think the standards [for the awards] should be such that you have to win a certain quality of race with a certain quality of horse in order to be eligible for the awards. They have to be widely distributed, a hierarchy of awards so that better races result in a better award, with the awards tied to purses."

Sikura contends that major international breeders who have farms in Kentucky would still participate and would understand the initiative to support local industry.

As this debate continues, breeders and farm managers are also concerned about the prospect of alternative gaming at the state's racetracks. The industry so far has been unsuccessful in getting video lottery terminals or slot machines legalized at Kentucky racing venues. Many horsemen on both sides of the award-distribution debate clearly are casting their votes according to the framework they think will offer the most benefit if alternative gaming revenue eventually fattens Kentucky purses. That scenario is one on which breeders on all sides of the award-program debate seem to agree.

"All states are competing to get people to breed and race in their programs," Sikura said. "If ultimately there is a VLT initiative that moves forward, we could have huge purses, huge breeder awards, and the best stallions all in the same place. If we're bold, we have a chance to make this a very significant program."

* Hill 'n' Dale stallion Vindication has returned to breeding after a 24-hour stay in Lexington's Rood and Riddle Equine Hospital due to intestinal inflammation. A 5-year-old Seattle Slew horse, Vindication had shown signs of discomfort, farm owner John Sikura said, and was sent to the clinic as a precaution.

* The Thoroughbred Club of America has announced its 2005-2006 officers as Charles Nuckols III, president; Mike Barnett, vice-president; Mike Akers, secretary-treasurer; David Greathouse, sergeant-at-arms; Bennett Bell Williams, immediate past president. Directors are Ed Bowen, Tony Cissell, Nancy Cole, Tom Hammond, Allen Kershaw, Ed Saunier, and David Switzer; Betty Flynn is executive director.