Purse Dispute Cuts 3YOs From 2017 Florida Sire Stakes

Something will be missing this weekend at Gulfstream Park when the annual Florida Sire Stakes series begins Aug. 5. 

The three-tiered racing series for nominated progeny of stallions registered with the Florida Thoroughbred Breeders and Owners Association will offer only six races for 2-year-olds this year. The six races previously offered for 3-year-olds were cancelled due to a funding dispute between the FTBOA and Florida Horsemen's Benevolent and Protective Association.

Last fall, the FTBOA submitted to Gulfstream Park and the FHBPA a proposed stakes agreement that called for the 2017 Sunshine Millions and the 2017 Florida Sire Stakes purses to be supported with $1,114,000 from the Gulfstream purse account, and $2,227,000 from the FTBOA incentive funds for special racing awards.

Though contributions from the Gulfstream purse account were part of two previous FSS agreements, the FHBPA balked at the proposal for 2017. With the horsemen out of the deal, Gulfstream also withdrew its million dollars from the FSS program.

"Ultimately, without matching funds from the purse account and from Gulfstream, the (FTBOA) board simply could not justify devoting as much in breeder award funds to the Florida-bred stakes program for 2017," wrote FTBOA president Brent Fernung on the association website. "As such, the 2017 Florida-bred stakes program at Gulfstream Park will total $1.5 million, with $1.2 million in breeder award funds and up to $300,000 from entry and starting fees.

"While we are frustrated that the loss of matching funds in 2017 forced the elimination of the FSS races for 3-year-olds, the FTBOA hopes to pursue the return of these popular races, while growing the highly acclaimed 2-year-old series and perhaps even adding an older horse division," Fernung continued. "We look forward to a day when the FHBPA and Gulfstream decide to rejoin us in that pursuit!"

Glen Berman, FHBPA executive director, defended his organization's decision to forego the purse contribution as good stewardship of the purse account.

"When the breeders took over (administration of) the Sire Stakes, they took the money that was supposed to be for special awards—for stakes and non-stakes races—and turned that into their funding mechanism for the Sire Stakes. And got the horsemen to kick in an extra $1 million. That's not right," Berman said. "We have an obligation to all horsemen, and you have to take care of the purse account, not give $1 million away willy-nilly to someone who can afford it."

Berman said the FTBOA has resources through state law that authorizes a 0.955% distribution from designated pari-mutuel pools at Gulfstream Park and Tampa Bay Downs. This cut of the handle is now generating a bit more than $6 million annually.

State law also requires the FTBOA to return annually between 17% and 40% of this money earmarked for use as breeders' awards and stallion awards "pro rata to the permitholders that generated the moneys" for special racing awards to the owners of Thoroughbreds running in stakes and non-stakes races.  

Berman noted that the $2.2 million the FTBOA initially offered to spend on the 2017 FSS is equal to its statutory maximum of 40%.

"Then when we said we would not give them another million, they reduced it back to the minimum. That is not telling me they don't have the money, it is telling me they choose not to spend it," he said. "On the other hand, we had an overpaid purse account—by millions—so it would have been imprudent for us to get another million dollars in the hole."

Berman said the deficit in the Gulfstream purse account is now gone. 

Cancelling the 3-year-old FSS races is not sitting well with some breeders and owners, who already paid $318,500 in foal nomination fees. The decision to cancel is being challenged by a lawsuit filed May 19 in the Fifth Judicial Circuit Court in Marion County by Canadian Hall of Fame trainer and breeder Roger Laurin with Central Florida breeder Belinda Kitos, who operates Southern Cross Farm near Ocala. The FTBOA, Gulfstream Park, and FHBPA are all named as defendants. 

The lawsuit notes that in 2016, the six FSS races for 3-year-olds offered a total of $900,000 in purses. 

"In what the plaintiffs believe is the last financial information made available by FTBOA regarding the amount of undistributed breeders' awards that FTBOA had on hand shows that as of Dec. 31, 2015, FTBOA had in "unrestricted" funds the sum of $3,664,099.00. The funds in this account are available and are greatly in excess of the sums necessary to fund the purses for the six 3-year-old races that FTBOA contractually agreed to fund through the nomination form," the lawsuit states.

Plaintiffs in the suit want the court to declare the FTBOA's decision to cancel the races as a breach of contract and mandate the association fund six races for 3-year-olds with a gross purse of $150,000 per race. The suit also asked for the races to be restored alongside the 2-year-old schedule.

Because the FTBOA's policy is to not comment on pending litigation, the association's attorney Amanda Luby directed BloodHorse to a motion filed July 7 to dismiss the lawsuit.

In a motion to dismiss, the FTBOA argues the case has no merit because: the plaintiffs have no bona fide contract with the FTBOA; the nomination fee and application only required the FTBOA to register and make the nominated horses eligible, which it did; and any damages done to the value of nominated horses or lost income are "not reasonably ascertainable or calculable."

Also noted in the FTBOA response is that the 3-year-old races were added to the FSS series because of the "tripartite purse agreement" between the breeders' organization, Gulfstream Park, and the FHBPA, in which each made a significant contribution to the FSS purses. 

"The defendants were unable to reach a similar agreement for 2017, and as is clear. ... the co-defendant host track, Gulfstream Park Racing Association, has not conducted, and has no present plans to conduct these races," the response states.

"Right now, we are just letting this work its way through the court system," said Laurie Hall, the attorney for Laurin and SCF. "But at some point, someone is going to have to address what happens to the people who nominated these horses and to the people who bought these horses at sales with the understanding they would be eligible for these races. What is frustrating is that the funding is there. So, the issue is just with the FTBOA."

In an emailed response, Luby did defend the FTBOA's commitment to growing owners' and breeders' awards by noting the board of directors' recent approval of a 20% payout of the announced gross purse for both breeders' and stallion awards in 2018—the highest possible rate by law.

"This makes at least three years in a row when FTBOA has offered the highest breeders awards in the history of Florida Thoroughbred racing and the second year in a row for the highest stallion awards possible," said Lonny Powell, FTBOA chief executive officer in an Aug. 2 statement. "I am thrilled for our hard-working and deserving FTBOA members that we have been able to economically support their breeding activity via our awards program for yet another year and make some serious money available to them in a very competitive business."