Pa. Standardbred News
Issue #1, February 2008
* Pa. Standardbred Breeders Newsletter *
President's Message
2007 was an exciting and eventful year for harness racing in Pennsylvania. Our three Pennsylvania harness tracks have quickly become some of the most active slots destinations on the East coast, exceeding initial revenue projections by enormous amounts. As a result, the PA Standardbred Breeders Development Fund has received about $11,000,000 in slots revenues since harness track slots parlors opened their doors. 50% will be distributed to Breeders in early 2008 as 2007 Breeders Awards. Since residency status for participating horses has not yet been established, 90% of the Breeders Awards will be distributed to mare owners from a common pool, and 10% will go to stallion owners. The initial projection is that every purse dollar earned by a qualified PA-sired horse in 2007 PA races will result in payment of $0.25 in 2007 Breeders Awards to the breeder of record. As the average eligible PA-sired horse aged 2 – 5 won about $13,000 in PA races in 2007, the average breeder should receive $3,250 in Breeders Awards per qualified horse bred! While this award will not change anyone’s life, it certainly will go a long way toward paying next year’s board bills for the dam. The other 50% will supplement 2008 PA Sire Stakes programs, raising the total purses of the PA Sire Stakes program to $9,000,000 - $10,000,000.
These developments are the first visible benefits of the slots program to Pennsylvania Standardbred breeders. To date, many horsemen have taken a “wait and see” attitude about increasing their investments in Pennsylvania sired yearlings , preferring to purchase aged racehorses that can race immediately for slots-enhanced overnight purses. The PA slots program has played a large role in renewing the confidence of buyers at major yearling sales in the future of harness racing. However, those buyers have invested broadly in the yearling market, instead of specifically purchasing PA-eligible yearlings. Increases in 2007 yearling prices for NY, Ontario, and even NJ sired yearlings exceeded those of PA-sired yearlings at major 2007 sales.
The initial Standardbred Horse Sales Company “PA Preferred” Yearling Sale in August 2007 was met with considerable enthusiasm by consignors who entered over 220 yearlings, about 90% of which were PA-eligible. Unfortunately, the sale was greeted with only modest enthusiasm from buyers. The sale was further handicapped by the unfortunate scheduling of PA Sire Stakes races at Harrahs Chester Downs on the same day. While some pari-mutuel PA-based trainers made arrangements for purchases in their absence, many trainers simply did not attend. The sale average was over $7000, and the median price was about $5000. Clearly, the lower end of the PA yearling market has not seen price benefits from slots legislation to date. Breeders cannot survive by selling yearlings for such low prices.
Our new Executive Assistant, Jennifer Krentler, has compiled extensive data from major yearling sales that will assist SBAP to make the most comprehensive analysis of the PA yearling market ever presented. SBAP will then present this information to the public at a meeting of the PA Harness Racing Commission. SBAP will post the results on our website, and welcomes comments from our membership. SBAP will advocate the development of specific overnight racing opportunities for PA-eligible 2 and 3 year olds as a means of encouraging buyers to invest in PA-sired yearlings. SBAP does not believe that emphasis on overnight races for PA-eligible aged horses will increase investment in PA-sired yearlings. SBAP is concerned that, without close co-operation among breeders, tracks, and horsemen, Pennsylvania may be in danger of following the disappointing experience of Ontario breeders with their slots program. The split of slots revenues in Ontario between overnight and Stakes races was 9.5/1, a very similar ratio to the 10/1 ratio for PA purses under slots legislation. Initial enthusiasm over Ontario slots led to a flood of Ontario-sired yearlings at auction. However, Ontario owners chased lucrative overnight purses instead by investing in aged racehorses. Yearling prices subsequently fell, breeders took a bath, and a number of Ontario breeders –
including Armstrong Brothers, Killean Acres, and the recent dispersal of the Peter Heffering broodmare band – went out of business.
Now, smaller Ontario tracks face a shortage of horses because owners have not invested in the development of young horses needed to maintain the racehorse population. SBAP does not want Pennsylvania to follow that model, and is trying to encourage initiatives that support the purchase of PA-sired yearlings.
Politically, the past year has been both challenging and rewarding. Early in 2007, SBAP discovered that a complete merger of the PA Harness Racing Commission and the PA Horse Racing Commission was being seriously considered by the Rendell Administration. Such a merger could have been a disaster for harness racing. SBAP organized a major campaign against the merger through the new PA Horse Racing and Breeding Coalition, which is composed of major Thoroughbred and Standardbred horsemens and breeders organizations in the Commonwealth. The Coalition united with the PA Fair Harness Horsemen to oppose the merger through a letter-writing campaign. SBAP represented these interests in meetings with Secretary of Agriculture Dennis Wolff, Deputy Secretary of Agriculture Russell Redding, and Steve Crawford, Governor Rendell’s Secretary of Legislative Affairs. Our counsel was well received by these officials, as the Commissions were not merged.
Instead, the Rendell Adiministration has proposed a re-organization of the administrative structure of both Commissions that SBAP believes gives both racing industries an opportunity to market and to promote racing as a “branded” product in the broader market for Pennsylvania agriculture and tourism. Both racing Commissions will continue to be composed of boards of three Commissioners. The present Executive Secretary positions have been renamed “Directors of Racing”, and retain their authority over the day-to-day administration of racing. A new position of Executive Secretary with broad powers over promotion and marketing has been proposed by the Rendell Administration. Existing programs for marketing and promoting PA agricultural products and PA tourism can be tapped by the new Executive Secretary to promote racing. Until a new candidate is hired after a nationwide search, Deputy Secretary of Agriculture Cheryl Cook will assume the duties of Acting Executive Secretary. SBAP and other representatives of the PA racing industry met with Deputy Cook recently for a SWOT (Strengths, Weaknesses, Opportunities, and Threats) analysis of PA racing. Everyone came away from the meeting encouraged that the Rendell Administration wants to give the PA racing industry a chance to survive. During meetings with Steve Crawford, SBAP learned that the Rendell Administration would welcome a partnership among racing organizations and the State to fund broad marketing initiatives that promote PA Standardbred and Thoroughbred racing as a major partner of PA agriculture, PA recreational “events”, and PA tourism. Such an effort would require breeders and horsemen to contribute significant funds to the program. However, if we are to survive, PA Standardbred breeders must prove to the State that we are willing and eager to reinvest in our livelihood – and are not simply looking for a government hand-out. SBAP will be discussing this exciting opportunity with other members of the PA Horse Racing and Breeding Coalition at our next quarterly meeting.
The fourth racing license has been awarded to Valley View Downs, and their location will be at the previous Bedford Downs site near to Youngstown, Ohio. A mile track will be constructed. With the current unrest in New Jersey and the uncertain financial status of the Meadowlands, Pennsylvania may find itself with the opportunity to attract some of the very biggest races in our sport – such as the Hambletonian and the Breeders Crown.
SBAP is developing relationships with our Thoroughbred colleagues to increase our effectiveness at the State Capitol. This spring, SBAP will be touring Harrahs Chester Downs and Philadelphia Park with Senator Michael Brubaker (R – Lancaster, Chairman of the Senate Agriculture Committee) and his staff, as well as representatives of the Philadelphia Park horsemens organization, to address the continuing controversy over backstretch improvements at Philadelphia Park.
SBAP continues to be dependent on the generosity of major farm Board members for its existence. Hanover Shoe Farms alone had contributed up to 90% of the funds needed to run this organization. SBAP contributors are listed on the “SPONSORS” page of our website (www.standardbredbreederspa.org). I want to express the deep appreciation of our Board for their financial support. SBAP has tried hard to represent the interests of all Pennsylvania breeders, large and small, despite this narrow financial base. SBAP is directly responsible for obtaining the rewards of slots legislation for Pennsylvania Standardbred breeders, who will receive significant checks for their successful 2007 performers. I believe it is time that our financial base should be broadened by voluntary contributions from our membership. Our greatest need is for funding the Standardbred Breeders Association of Pennsylvania Political Action Committee (PAC), which cannot receive support from corporate donations. The PAC is the sole source for SBAP political contributions to support legislators that have been advocates for our industry. To date, the PAC has been funded entirely by personal contributions from Board members. SBAP has been at a major financial disadvantage in relation to our Thoroughbred counterparts, who are well funded from many years of legislatively mandated Breeders Awards programs. SBAP had only a minor presence during the 2007 elections because of limited PAC funds.
A strong and active political presence by SBAP can further the interests of Pennsylvania Standardbred breeders in the implementation of the new administrative structures of the racing Commissions, and in the development of State-wide promotion and marketing programs for racing.
Our industry can be rightfully criticized for not re-investing in its future. The Rendell administration is clearly giving us an opportunity to save ourselves. Part of the price of salvation, however, is demonstrating that we are helping ourselves to be saved. A strong Breeders Association supported by its membership is a major step in that direction. Please consider a contribution of personal funds to our PAC in 2008 to help us to represent your interests in Harrisburg. Personal checks can be written to “Standardbred Breeders Association of PA PAC” and sent to the following address:
Standardbred Breeders Association of PA PAC
P. O. Box 339, 2310 Hanover Pike
Hanover, PA 17331
SBAP looks forward to your active support in 2008, and to more progress in the implementation and rewards of slots legislation.
David Prushnok
President
SBAP
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