Daily Record Business Writer
April 28, 2009 7:19 PM
Four days before the Kentucky Derby, the Maryland Racing Commission has voted to cut off Rosecroft Raceway’s simulcast signal of thoroughbred races in response to the track owner’s refusal to pay a $5.9 million fee for the signal rights.
The 6-2 vote came during a contentious commission meeting held at Pimlico Race Course Tuesday. One member was absent from the meeting.
Kelley Rogers, president of Cloverleaf Enterprises Inc., the horsemen-owned parent company of Rosecroft, said after the meeting he intends to file a motion in Price George’s County Circuit Court Wednesday requesting a stay order on the commission’s action.
If granted, the order would allow Rosecroft, which has suspended live racing and functions solely as a simulcast betting site, to take bets on the Kentucky Derby this Saturday.
“The real losers here are the fans, and it is clear today the commission didn’t vote in the best interest of racing,” said Rogers, who added he intends to pursue “every legal avenue available” to stay open.
Representatives from the Maryland Jockey Club, breeders and horsemen brought the case to the commission after talks stalled with Rosecroft. The $5.9 million owed is from a 15-year agreement reached in 2006 — a year before Cloverleaf bought the Fort Washington racetrack — that required Rosecroft pay that amount annually for the right to simulcast and take bets on thoroughbred racing.
Without the feed, which the commission voted to cut off by Tuesday midnight, Rosecroft can only air harness races.
In voicing his displeasure, commission member John McDaniel, who helped orchestrate the 2006 agreement, told Rogers the “one thing you don’t do is renege on a deal.”
“At the end of the day we shook hands and we had an accord,” he continued. “And for the moment, it appears we’re going to have to sacrifice one component of the racing industry in order to save the whole of it.”
Rogers had argued that with the raceway projected to make an $11.7 million profit from a $69 million handle in 2009, handing over nearly half that amount to the thoroughbred industry was unfair. When the agreement was made and approved by the commission, Rosecroft’s handle was $110 million, with the raceway making an $18.7 million profit, he said.
Rogers told the commission the $5.9 million fee, or “premium,” was ridiculous in this financial climate and he decided this year he wasn’t paying “a single dollar of that premium” unless the thoroughbred industry could agree to $2 million instead. That offer was rejected by breeders and horsemen.
Jockey club President Tom Chuckas said thoroughbred racing has its own financial problems — most notably the bankruptcy of Laurel and Pimlico racetracks’ owner and a purse deficit this year of $3 million.
“From our perspective, we feel it is unfortunate, but we’re in no position to modify the agreement,” Chuckas, who ran Rosecroft before being hired by the jockey club, told the commission.
Alan Foreman, general counsel for the Maryland Thoroughbred Horsemen’s Association, told the commission the request to pull Rosecroft’s signal wasn’t personal but a business matter.
“They are feeding off the thoroughbred industry ... and we cannot stand by and let another bet be placed at Rosecroft when they’re not paying for that right,” he said. “We’re not trying to put Rosecroft out of business, but we’re not the problem.”
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