04/21/2004 11:00PM

Q & A: Rick Baedeker


Rick Baedeker, the president of Hollywood Park, has never been far from the racetrack.

The son of the late handicapper Bud Baedeker, Rick grew up around the sport in Southern California. He worked alongside his father in the family's public handicapping business and later worked as a marketing executive at Hollywood Park and for the National Thoroughbred Racing Association. He also held leadership positions at The Woodlands racetrack in Kansas City, Kan., and at Television Games Network, before becoming president of Hollywood Park in November 1999.

Since then, Rick Baedeker has wrestled with several issues that are key to the health of the Thoroughbred industry: wagering competition from Native American casinos, rising costs of workers' compensation insurance, the advent of account wagering, and securing legislation that will enhance the sport.

In a recent interview at Hollywood Park, Baedeker, 54, spoke to Daily Racing Form's Steve Andersen about his family, his early experiences with horse racing, and the challenges that he and the sport face in California.

DRF: You've worked in several capacities in racing - handicapping, television executive, and upper management at small and large tracks. What interests you most about the sport?

Baedeker: The most interesting thing to me today is returning the sport to its glory. I said to a colleague that is rather new to the game a few weeks ago, 'You don't understand what we're talking about when we've got five- and six-horse fields.'

Everyone thinks that when we've got nine races carded that everything is fine. It's not. If we got five-, six-, or seven-horse fields, there might be a couple that don't belong, and the race isn't bettable. As a result, the product is diminished.

If you were here 10 years ago, or 20 years ago, you can realize how dramatically different it is today. My goal is to take it back.

In what ways can this racetrack address field size?

I'm not sure the racetrack, itself, as a stand-alone unit, can do much. We can do some things that are temporary or superficial. I think we need systematic changes - that's what the industry needs. So we've gotten together in unprecedented fashion and decided to seek a significant change in cost structure.

I don't think you've had racing associations, all of them in this state, get together and say we will take our share from one-half of one-percent increase in the [takeout from] exotics and give it away to the owners of the horses. That's never happened before.

We're doing it because we appreciate that putting more horses on the racetrack to make the product better will give the associations a payoff later. Whether it's a year from now or five years from now, that's when we'll have a payoff. That's a significant change.

We're excited about the chance to cut the cost of workers' comp insurance, but I'm equally excited about the participation bonus that we'll pay to every horse that doesn't get a check. Every horse beyond fourth will get a check. My recollection is they will eliminate the fifth-place payment, and every horse from fifth on will get a participation bonus.

Let's say you run seven horses a month, and they're unplaced. That's $2,800 for expenses.

Overall, what's the outlook for the new takeout legislation after a similar bill was vetoed by Gov. Schwarzenegger earlier this year?

It's excellent. In the veto message, he had several things listed that he had problems with. We've met with the governor's staff, and we addressed the things they were concerned about. They've seen the new bill; it's now gone through committees about to go out to the floor. We have been assured repeatedly that he will sign it.

Let's say it is signed near the Kentucky Derby time or the middle of May. How long until it would have an effect on the sport?

I think we can see an almost immediate impact. It's an emergency bill, and as soon as he signs it, it will take effect. The half of one percent will begin to be assessed in a few days, as soon as logistically possible. That will start to create a fund, and we'll probably need to accumulate some funding before we can make a significant impact on workers' comp premiums. The $400 per start probably can begin within a few weeks. We'll use that interim period to get out and tell the world, not just California, but the adjacent states and the rest of the country, that it is more affordable to race in California.

In addition to cutting the workers' compensation costs directly and providing the participation bonus, the California Marketing Committee has set aside funds to facilitate bringing horses to California. So it won't cost as much from a training standpoint, and you're guaranteed if you finished unplaced that you're making money when you run. And, if you're thinking of coming to California, we've got some money to help you get here. The details are to be determined, but it's another component.

It will certainly help and is a reason to be optimistic. In the worst case, it will help us keep the players we've currently got. I'd hate to think of a trainer or an owner saying they have to send their horses to Kentucky because it's gotten too expensive to run here.

Your family's Baedeker's Guide was started in 1938. What are your earliest racing memories?

My earliest memory is watching the Gil Stratton show on Saturdays with all my buddies from the block, and each of us picking a horse. I knew enough to involve my friends into the sport at that point. I'm guessing I was probably 7 or 8 years old. I remember the summers at Del Mar. I remember the family life with all the cousins down there. I remember the 2 1/2-hour trip from Glendale to Del Mar on the side streets. There was no freeway.

I remember at an early age handicapping whatever local track was running in California, and I'd handicap the New York track. I remember my dad and, I think, my brother heading out the door to Santa Anita.

There was a horse running named Sky Country; I guess I was 6 or 7 years old.

I told them as they were leaving (the house) that the horse would win. They chuckled and laughed because he was a 30-1 shot. He won. I used to handicap from the time I could read.

I was in the seminary (St. John's seminary in Camarillo). I spent hours and hours teaching the students how to read the Racing Form.

I was there for 7 1/2 years. I was in minor seminary, so high school seminary for five years, and then I went off to an order, which was holy boot camp, which was awful. I came back to the diocese. I got out of there and finished up at Loyola. I had a degree in philosophy. It didn't qualify me for anything, but I couldn't rule anything out.

Where do you go from there?

I went to work for Union Bank in a management training program with my future brother-in-law. We left the seminary at the same time. We had conspired to become lawyers. He ended up at UCLA and I went to Southwestern after a year working for Union.

I went to Southwestern for a year and hated it. I figured, I'm burned out I'll come back after the summer and give it another shot. Three weeks into year two, I couldn't take it. I called Dad and said, 'Can I come work with you.'

Dad had four families working for him in the family business. He grows up in Chicago and is kind of a natural handicapper. He wins a handicapping contest in the Chicago Tribune. He was handicapper of the year and he got free passes to the track.

Through the Depression, his dad was making two bucks a week and gives him 50 cents to try to run it up at the track. If he does, they have steak that week. Dad's enjoying life as a young man and he gets TB, which was terminal.

They send him out here to the Valley, thinking the weather in California will help. He's flat on his back in the sanitarium. He gets to know a lot of people there with him and watches them pass away.

He's approached one night by a surgeon. He's had two surgeries already. The surgeon says, 'Bud we've got a new procedure we want to try. We think it will be a new way this disease is treated.' Dad says, 'Let's go.' They said, 'Well, this is the third time the surgery has been performed, and the two previous occasions the patients have not survived.' Dad just passed away at 90.

Dad credits, more than that surgery, he credits reading the Racing Form every day for saving his life. His mother would bring him the Racing Form, and he'd handicap the horses all day long and literally he said he lived for the race results on the radio each night at 6 o'clock. Keeping his mind active, and off his thoughts of what was going on around him as well as his bleak outlook, he credits with really saving his life.

So he comes out of there, he has no talent other this knack of picking horses. He gets a mimeograph machine and puts the sandwich board around him that says Baedeker's Guide, and heads out to the curb opposite the track. I think it was Del Mar. He had a lot of help along the way from people who took him under his wing when he couldn't make ends meet. He got to grow up with the industry out here.

It was 1950 when he had the perfect day here. We had the card at the memorial service. Eight races then, he had all eight on top. There was a $26 winner, a $17 a $13, a couple of eights and a couple of chalk horses. He had six of the eight races picked 1-2, four of the eight picked 1-2-3. The next day he had four of eight on top, and the next day six.

It takes somebody who tries to do it to appreciate the achievement. What made his career was Braven Dyer, who had a front-page column in the Times. He writes a fictional piece the next day about this husband who takes his wife to the races and he's berating her all the way to the track, saying, she's wasting her money, it's a stupid and useless enterprise. He said, "I'll pick you up." He goes back to pick her up and she's got cash coming out of every pocket. He said what happened. She said, "It was really very easy. This nice man gave me a piece of paper with all the winners on it and I bet them all day long."

The next day there was a traffic jam around Hollywood Park to get his selections.

At that point, he came into the track, I think it was here and said, "There are eight publications out there and only four are legitimate and tell you what they had the previous day. You ought to bring us in and put us under contract."

How did your father influence you in racing?

It's kind of intertwined, the way he influenced me and my life. Dad was kind of a celebrity at the racetracks with the fan base. The Cary Grants of the world, Gen. Omar Bradley would buy the card from him. Then, I'd see how dad treated the next guy who looked like he was homeless.

He'd spend 10 minutes with a celebrity at the booth and then walk in and spend 10 minutes with the guy selling papers. Dad didn't differentiate. I saw how he appreciated that value in racing. It wasn't just about handicapping or solving the puzzle. It was all the people you did this for. Ultimately, it was about the integrity of this pursuit. If you said that to someone who doesn't understand horse racing, they wouldn't have a clue what you were talking about.

Gaining slot machines have become a priority for California racetracks. What chances do you think the measure has for passing a referendum in November, and, secondly, how do you think native American tribes would respond to a yes vote?

I think it's up to the Indian tribes. If, as a matter of fact, we get to November and, in the minds of the voters, the Indian tribes are not paying their fair share to the state, we win. If there has been a legitimate deal cut with the tribes and they are paying their fair share, we lose.

It's not a horse racing issue. This is a much broader issue. This is an issue of fairness in the minds of the voters. The research that we've done is very interesting. The California voters still have the utmost regard for the Indian tribes. They want them to have gaming, want to respect their sovereignty, but want them to pay their fair share to the state.

Today, there is no deal between the tribes and the state. We keep hearing different things each day. My view of things right now is there is a framework for a deal, and some tribes have agreed to the framework but most have not.

Even if the governor came out and said, "We have a deal." I don't think with a partial deal, or a cheap deal, the voters will be satisfied.

I don't know how you look the voters in the face and say we have 50 percent of the tribes now paying their fair share and 50 percent aren't.

Let's say slot machines are installed at California tracks. Of course, it will help the bottom line of racetracks and be a major boost to purses. But would it also detract from the racing product and erode interest in the sport?

I don't think so. I think we have to have enough confidence in our product. If we triple our purses in California and we don't restore the game to its utmost strength, I'd be very surprised. I fully expect that tripling purses in California will make us number one in the country, will bring horses out here and will refill our fields.

If, in that scenario, we can't draw horse racing fans, then guess what? Our product doesn't work. I'll take my chances with that. We're surrounded by hundreds of thousands of people, if not millions, who like to play slot machines. And like to go to Vegas or the desert to do it. They instead will come here. We're going to take advantage of the fact they like to play slot machines. We'll take a nice percentage of that action and put it on the racetrack.

What is your assessment of account wagering as a whole in California since it was launched in January 2002?

Generally, very positive. I'm a little disappointed that the account wagering vendors, and our partners TVG, have not marketed the product more aggressively. We understood at the start that they would market to the existing fan base, and we said, "Okay, we're in this with you."

The people that they have to market to are the sports bettors, the latent horse players, the people that used to come and don't come as often, and any player that goes to Vegas that's a potential account wagering holder. They've got to get out and reach those folks. In a state like California, that's expensive, I understand, but that's the promised plan. Just taking our product and making it more convenient for the existing player, is kind of a break even.

Do you see any prospects of reaching more customers that are not already here?

I caution people that we're really in the infancy. We've had two full years of a revolutionary new product. Even though we are legal in the state, we still have a difficult job to do to educate the public. That's going to take time.

Also, there has been some reorganization of TVG at the corporate level. I think that's finally shaking out. They've invested more than $100 million. Just to market the existing fan base is not their goal. I'm hopeful. In three more years, if this hasn't taken place, I'll be really concerned.

How has account wagering affected on-track business in California?

It's difficult to say. I think most people want to point the finger at account wagering as a primary reason for declines. I don't believe it. I'll tell you the primary reason for the decline is that many of our races are unbetable. The product is very weak. That isn't a bad thing. We can fix that. It may take some time, but we can fix it. What we can't fix is a $5 billion Indian gaming industry over the hills that didn't exist 10 years ago. It's a big, big factor.

Account wagering has certainly cannibalized some of the business. But for every person that stays home and bets via account wagering, who's to say they bet two days in the past and they now bet three? I think it's a mixed bag.

What are the prospects of a deal between Magna Entertainment and TVG to simplify account wagering for California residents?

You'd have to think a deal is going to happen, because it's illogical to think it wouldn't happen. It's difficult for me to be totally subjective because of my background.

Whereas the distribution for TVG was painstakingly slow, they're putting some decent numbers up. They're getting stronger.

What is Hollywood Park's position on providing signals to rebate shops and is this practice consistent with California Horse Racing Board regulations?

It should be asked directly to Tom Meeker, because it's a corporate position. We feel we have to be competitive. The way business is done today, there are incentives offered for just everything that you buy. What we haven't figured out is a way to do that. We recognize that, in an ideal scenario, we would reward our good players. We do that the best we can here with our VIP room upstairs. On the other hand, the biggest culprit in siphoning dollars is the rebate shops. I've got a guy sitting in my box seats using a cell phone and the tracks and horsemen are sharing three cents instead of 19. That economic model is a recipe for disaster.

It's clear we don't have a solution. I know there is an NTRA initiative underway, and we have a corporate initiative underway. I know the TOC is fixated on this. I think there might be some progress. I'm afraid I don't have an answer.

In general, how has the practice of rebating changed wagering on horse races?

The rebating has shifted dollars from one location to another. It has probably brought gamblers who are more investors into the game and are looking for a percentage return on their play.

There are other some other concerns with the tote system that are troubling, the last-minute betting. It's not fair to anyone sitting here. Our company has taken the lead in trying to get that fixed. I think in a year from now we will have that fixed, we'll have real-time betting.

Lastly, you're probably the only racetrack executive in California to have appeared on "Family Feud". I seem to recall a blonde perm as well.

(Laughs). It was not intentionally blonde.

Anything you want to say about that moment in television history?

I'd like to let the world know there were some fairly intelligent answers along the way.

This happened in 1975. There are no VCR's. We've won the first four shows. We've won $10,000.

So we're in the fast cash portion and I go second. I'm in the little booth with the headset so I can't hear what's going on. It's my turn. The question was, "Something that comes in pairs?" I said, "Bananas."

"What time do most people go to bed?" I said, "Nighttime."

"Name a southern state?" I said, "North Carolina."

I had three zeroes and everyone is laughing.

The next question was "Name something you put in tea?" I said, "Tea bag." Now that's not that funny, but because of what had happened everyone was rolling in the aisles.

The last question was, "Name something that you get in the deli?" I said, "Pickles." That was worth 12 points.

In 2001, I get a call from my brother-in-law. He said, "I was just watching a show called 'The Worst Answers in Game Show History,' and guess what? You were on there."

Thirty years later, this has come back to life. He sees it, no harm, no foul.

A year later, I get a call from another relative who says, "There is a show on NBC tonight." Not some innocuous cable channel, this is the National Broadcasting Company, 'World's Dumbest Answers to Game Show Questions'. It has since shown at least weekly, and I can't help but take it personally. I get emails from nieces.

My cousin is a cop in Seattle. He said, "I was in the precinct the other night, the boys were sitting around watching television. I look up and I see someone that looks like you."

I went on to "The Price is Right" and won the showcase. No one asks me about that.