04/04/2013 2:38PM

Stall rent issue puts horsemen, tracks at odds

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Recent efforts by Thoroughbred racetracks to charge horsemen for stalls have been met with fierce resistance by trainers, many of whom contend the efforts are a violation of an age-old policy granting horsemen free stabling and training in exchange for entering races.

Such a policy used to be the norm in harness racing as well. But in a harbinger of what Thoroughbred horsemen may be facing as racetracks increasingly tighten their belts, the harness industry has largely abandoned the policy.

Over the last two decades, as the harness industry became more and more reliant on subsidies from casinos, many of its racetracks eliminated their backstretches, requiring horsemen to ship in from private training centers or farms. Although several harness tracks still maintain backstretches, some charge stall rent, at places such as Pompano Park in South Florida, where stall rent is $900 per stall for the year. All of Pompano’s 800 stalls are full.

“Do they like paying it? No,” said John Yinger, Pompano’s director of racing. “But that’s the way it is.”

In the last six months, two Thoroughbred tracks, Arlington Park outside Chicago and Calder Race Course in Miami, have told horsemen they plan to charge stall rent. In both cases, horsemen have refused or are refusing to pay. Both tracks are owned by Churchill Downs Inc., a publicly traded company.

The two proposals may represent negotiating tactics designed to win concessions as the tracks hammer out horsemen’s agreements. But they could also be an indication that other Thoroughbred racetracks will soon seek to pass off at least some of their backstretch costs on to their horsemen.

Chris McErlean, the vice president of racing at Penn National Gaming Inc., which owns 22 casinos, four harness tracks, and five Thoroughbred tracks, noted that all of Penn’s harness tracks are now ship-in facilities, without any of the millions of dollars in annual expenses to maintain backstretches. McErlean said Penn does not have any plans to charge stall rent at its Thoroughbred tracks, three of which are currently supported by casino revenues.

However, McErlean also contended that “many of the business models in Thoroughbred racing are outmoded, but they are difficult to replace,” citing the leverage horsemen have when negotiating agreements with racetracks. Stall rent charges would be difficult to put in place aside from the agreements, which are necessary for tracks to hold races and distribute their simulcast signals.

“You are bucking a tremendous amount of history and expectations there,” McErlean said.

It’s not hard to see why racetracks would contemplate getting rid of their stabling areas or pressing horsemen to foot part of the bill. Backstretches at many racetracks can occupy a hundred acres of valuable land ripe for redevelopment. In addition, there are huge costs associated with maintaining a backstretch, running from the expense of providing security to complying with increasingly strict EPA regulations over manure removal and water run-off. Barn maintenance and repair, keeping a track in shape for year-round training, and providing housing to backstretch workers employed by trainers also factor into the mix.

“We’re providing living accommodations to people we don’t even employ,” McErlean said.

At Calder, the track announced a plan late last year to start charging stall rent, and the track nominally charged horsemen the fees from December through February. However, Calder’s neighbor, Gulfstream Park, which was running during the time, picked up the tab, paying Calder directly. When Gulfstream said it wouldn’t pay after February, Calder dropped a plan to charge its horsemen for March. Calder opens Saturday and won’t be charging stall rent for the upcoming year-round meet.

Nearby, Palm Meadows Training Center, which is owned by the parent company of Gulfstream Park, charges stall rent, at $15 a day, payable up front. However, Gulfstream refunds one month of stall rent for each horse based at the training center who starts during its meet, allowing horsemen to recoup some of the costs (whether trainers refund the money to horse owners is another matter).

Timothy Ritvo, the general manager of Gulfstream, said Gulfstream itself would never charge stall rent to horsemen based at the track. The same can be said for all of the properties owned by the Stronach Group, the private company controlled by Frank Stronach that also owns Santa Anita Park, Golden Gate Fields, Laurel Park, and Pimlico, Ritvo said.

“You have to understand − Palm Meadows is not a track, it’s a training center, and it is one of the best training centers in the world,” Ritvo said. “That’s different.”

At Arlington, the issue of stall rent is one of many factors that have complicated negotiations between the track and its horsemen on an agreement for the upcoming 2013 meet, which opens May 3. Although Arlington officials have said they do not intend to charge for stall rent to all trainers, the track, in a notice posted on its website, has said, “No one should be permitted to use the facility solely as a training center and occupy stalls that may be used for horsemen who want to race at Arlington.”

While the notice states no fees will be applied in 2013, it also states Arlington intends to start assessing fees on stalls in 2014.
Arlington officials have said the only reason they intend to charge the fees to trainers is to make sure the track cards races with full fields. Only horsemen who don’t reach a certain threshold for starts – currently said to be one start per stall per month – would be assessed the fees, the officials said.

“It’s beneficial to both the horsemen and the racetrack to foster starts in races,” said Tony Petrillo, Arlington’s general manager. “But we have to be careful that we don’t jeopardize that relationship.”

Pressure to card races with full fields has ratcheted up over the last few years because of rapid declines in the foal crop. Those declines are set to hit especially hard this year because the foal crops of 2010 and 2011 – whose members are now 2 and 3 years old – were down an aggregate of 21.5 percent compared with 2009, which itself was down nearly 9 percent compared with 2008. The foal crop has yet to rebound, and race dates have not kept pace with the foal crop declines, meaning those shortages will persist throughout the near future.

Chris Scherf, the executive vice president of the Thoroughbred Racing Associations, a trade group for racetracks, said the horse shortage is probably contributing to the efforts by tracks to threaten stall rents. But he also said the shortage may be making the horsemen’s position at the bargaining table even stronger, considering that racetracks need horses to make their live meets go, and there aren’t that many horses to go around. 

“Overcrowding of the stable area is not the problem it used to be,” Scherf said.

That seems to be the case in Florida, where this year Gulfstream and Calder filed for year-round racing dates for the first time in their history. As a result, both tracks are planning to run head-to-head on the weekends for 52 weeks out of the year beginning July 1, putting pressure on the tracks to lure horses from South Florida’s dwindling population to their races, at the same time that other Florida horsemen are eyeing purses at Tampa Bay Downs on Florida’s west coast.

Kent Stirling, executive director of the Florida Horsemen’s Benevolent and Protective Association, predicted there will not be any stall rent in South Florida as long as the three tracks are running year-round.

“At least for now,” he said. “Really, who knows what’s going on down here?”