2002 Cal-bred News

HIGHLIGHTS OF THE MEETING
OF THE CTBA BOARD OF DIRECTORS
JANUARY 29, 2002
ARCADIA, CALIFORNIA

PRESIDENT’S DISCUSSION (Wes Fitzpatrick): Wes Fitzpatrick reviewed the contributions of four-term board member Myron Johnson (1990-2002), who is not seeking re-election, emphasizing that he was the first director to seek election by means of the petition process, which opened the board to broader membership participation. Myron made a major commitment to the industry of time and effort, and over the course of his tenure held a variety of positions on the board. Most recently, he was instrumental in improving the credit checking process for the Del Mar Sale. He is remembered for his representation of the small breeder and his thoroughness in researching issues. The president on behalf of the board expressed gratitude to Myron and presented him with a bronze mare and foal statue. Other board members expressed their personal thanks to Myron, stressing his diligence, dedication, and willingness to deal with tough issues.

ANNUAL MEETING, FEBRUARY 9, 2002: The Annual Meeting will stress last year’s successes, including a review of the incentive award program, legislative progress, and a racing highlights video. We have had about 100 RSVPs for the meeting, compared to last year’s 175. Annual Meeting tickets will include valet parking, entrance to the Turf Club, and a buffet lunch. 2001 Cal Bred Champions in each category will be presented at Golden Gate Fields before and during the afternoon’s racing program.

GENERAL MANAGER’S REPORT (Doug Burge): Breeder award letters have gone out. The reduction in racing days has resulted in a 1.7% drop in incentive fees generated. Total Incentive Award receipts for 2001 was over $14.3 million. The breeders award dividend is estimated to be at least 15%, which is similar to the amount paid for 2000 awards. Last year the award percentage totalled 15.94%. As in the past, both the breeders and stallion awards will be paid by March 31.

We are still waiting for stallion award claim forms to be returned before calculating stallion awards for the year. In 2001, the award dividend was 12.06%, and has ranged from 12-14% over the last three years.

The Great State Challenge, which will feature top state bred horses from various states, is slated for December 7, 2002, at Sam Houston Race Park. The details of the event, including race conditions, eligibility, and runner selection issues, are still being decided.

Doug Burge will attend a steering committee meeting at Sam Houston Race Park to discuss these and other issues. The CTBA is pleased with TOBA’s involvement in coordinating this event with the NTRA, Breeders Cup, and the state associations.

Negotiations are still ongoing regarding the Sunshine Cup, the lucrative racing day featuring Cal-Breds and Florida-Breds. The current format, which will feature eight races, four at Santa Anita and four at Gulfstream Park on the same day, with total purses of $5 million, has been endorsed by the CTBA, Florida Thoroughbred Breeders and Owners, and Magna Entertainment. We are hopeful that the horsemen’s organizations in California and Florida will endorse the event as well so that the inaugural running will take place in January of 2003.

The Director’s Survey was created to review board performance and process, and needs follow-up. Directors’ comments will be shared with board members anonymously.

TREASURER’S REPORT (John Barr): Our year-end revenues and expenses are in line with our budget. Eight fewer racing days in December had a small negative impact on our annual receipts for the incentive fund. This is the third straight year that the organization’s total revenues have exceeded expenses. The magazine is profitable, and modest net profits were achieved from the Del Mar Sale this past August. The 2002 proposed budget was distributed by staff to each director for review and adoption at the next board meeting. Committee chairs were reminded that planned expenses for the ensuing year need to be included in the budget.

SALES COMMITTEE (Scoop Vessels): The recent Del Mar Sales workshop went extremely well, with participation from some of our top agents and consignors, as well as directors and staff. The members concluded that they wanted 1) a Sunday-Monday sale instead of a Tuesday-only sale (historically the sale has taken place on Monday and Tuesday evenings); 2) mandatory x-rays in the Sale Repository, which the CTBA will review just prior to the sale, exercising the option to scratch entries with extreme problems; 3) score reports delivered at the time of inspection. The group agreed that the 80/20 rule to include 80% Cal-Breds in the sale was ok, and in general they liked the process of selecting for quality. Dennis Meagher will prepare a draft of a procedure for x-ray quality and review.

RACING COMMITTEE (Doug Burge reporting): Doug Burge reported on a recent Gold Rush committee meeting. Gold Rush Day, the spring celebration of California-breds held annually at Hollywood Park, will take place on Sunday, April 28. It was announced that Cal-Fed had been secured as a major sponsor for the event. In the first two years, Gold Rush Day has been a huge success, with full fields and total handle each year in excess of $18 million. The committee discussed ways to improve the event including seating issues and further marketing to boost attendance. It was reported that the 2002 California-bred Restricted Stakes Schedule has been printed and distributed to all trainers, and is now available for all owners and breeders upon request. The 2002 schedule includes 60 races with total purses in excess of $6 million.

LEGISLATIVE COMMITTEE (John Harris): John Harris reported that the CHRB had approved the license applications of both TVG and Xpress Bet at the meeting of January 24th, and both systems are signing up customers and accepting wagers on both California and out of state races. Much concern was expressed at the CHRB meeting that Advanced Deposit Wagering achieve its potential of developing new fans for the sport through a much broader use of television than has been available in the past. The contract that TOC negotiated with Magna appears to be a good one for horse owners and breeders.

Legislatively, we will sponsor a bill that will allow us further discretion as to how we allocate funds for the betterment of the Cal-Bred program. Current law mandates that certain funds be allocated exclusively to Cal-Bred restricted races. We are seeking the flexibility to include other races that feature Cal-Breds. This modification would permit funding for the Sunshine Cup/Great State Challenge. The CTBA will conduct a good educational campaign to explain the benefits of the new stakes opportunities.

We will likely have to maintain a defensive posture this year in the legislature, given that the state is looking for either spending cuts or revenue enhancements to fill an estimated $12 billion budget deficit.

Some version of Workers Compensation law redrafting will probably occur, with attendant increase in costs to all employers. The racing and breeding industry may see very significant cost increases. The business sector hopes to work legislatively for provisions to reduce fraud and better enable employers to manage the medical care process. If a bill is not passed and signed by the Governor (he has vetoed the last two that were sent to him), it is believed that organized labor will put an initiative on the ballot. Such an initiative could be worse than the new legislation.

EDUCATION COMMITTEE (Leigh Ann Howard): The Southern California stallion tours were well received. The Harris Ranch Seminar (September 20 and 21, 2002) is entitled "Dreams, Reality, and the Marketplace," and will focus on the steps to success as a commercial market breeder.

WEBSITE COMMITTEE (Joan Rogers): The redesign of the website has increased hits some 26% over last year. Advertising revenues are up. The website has developed from a static information repository to a source of current news and updates, making it another platform for breeders to advertise their services and for the association to educate and encourage new members.

DON’T FORGET THE ANNUAL MEETING AT THE RADISSON BERKELEY MARINA, SATURDAY, FEBRUARY 9, AT 9:30 AM!