Updated on 09/18/2011 12:26AM

NTRA and Breeders' Cup to fire 25 in a shakeup


LEXINGTON, Ky. - The National Thoroughbred Racing Association and Breeders' Cup Ltd., which have operated jointly since 2000, announced Friday that they will fire 25 of their 67 employees by the end of the year as part of a plan to make the NTRA leaner and narrow its focus.

With a significantly smaller staff, the NTRA will concentrate on its lobbying efforts in Washington; its sponsorship, television, and group purchasing programs; and a project to improve the industry's national bet-processing network, according to Greg Avioli, the interim chief executive officer of both organizations. Nearly all of the 25 positions will be eliminated immediately with the exception of individuals in the simulcasting department who will leave after the Breeders' Cup on Nov. 4 at Churchill Downs.

Keith Chamblin, a senior vice president of the NTRA, declined to identify any of the people who were being fired. He said that because of crossover duties, it would be impossible to classify many of them as either Breeders' Cup or NTRA employees.

But Avioli said that Ken Kirchner, the longtime director of simulcasting for the Breeders' Cup and senior vice president of new product development, would leave his job after the Breeders' Cup in November. Avioli said that the Breeders' Cup would try to negotiate a consulting arrangement with Kirchner.

Kirchner did not return a phone call on Friday.

The job eliminations will include management and staff positions in the departments of administration, finance, information technology, nominations, event operations, legislative, and product development. In addition, the NTRA and Breeders' Cup will hire outside companies to perform the duties currently handled by its graphics arts, licensing, merchandising, and simulcasting departments.

The NTRA said in a statement that the job eliminations will result "in a 40 percent reduction in personnel and a corresponding reduction in personnel and adminstrative costs." NTRA officials said that the savings created by the reductions do not address the costs that will be incurred to hire other companies to perform the tasks that were previously done in-house.

The NTRA was launched in 1997 to work on common goals within the racing industry, including marketing, advertising, and growing handle. The group was funded by racetracks, horsemen, sales companies, and breeders before the merger with Breeders' Cup. The business plan of the organization has been altered significantly nearly every year, and the result has been an organization that has been "inefficient" because of its various new roles and objectives, Avioli said.

"The priorities have changed, the objectives have changed, and the organization has changed," Avioli said. "This organization was built on the 1998 business plan, when the NTRA was going to be a league office akin to the PGA Tour, but since then, we've changed direction, and the last couple of years especially, we've refocused on areas we didn't envision back then. We had to re-size to match our priorities, and, candidly, the new focus doesn't require such a large organization."

According to NTRA financial statements, general and administrative costs in 2005 were $5.8 million, or approximately 9 percent of the $65.2 million operating expenses of the combined organizations. Of the two organizations' estimated 2005 revenues of $65.4 million, $35.3 million, or 54 percent, was contributed by Breeders' Cup.

The announcement of the firings came a week after D.G. Van Clief, the former chief executive of both companies, officially stepped down after submitting his resignation earlier this year. Van Clief was replaced on an interim basis by Avioli, the former chief financial officer of the NTRA who has been with the organization since its founding.

Although the NTRA and the Breeders' Cup merged in 2000, their boards remained separate. The boards are renegotiating their joint operating agreement, which expires on Dec. 31, 2006. Some members of the Breeders' Cup board have been pushing for changes at the NTRA for more than a year, criticizing the organization for wielding too much influence over the Breeders' Cup's budget and for failing to account adequately for the organization's use of Breeders' Cup funds.

It is unclear whether the new agreement between the NTRA and the Breeders' Cup boards will retain a joint operating structure, but the restructuring plan announced Friday was expected to address several concerns voiced by dissatisfied Breeders' Cup board members.