Tuesday, March 12, 2013

What does it mean to be a business partner?


Now that the shit has really hit the fan and the reality of Windsor, Sarnia and Fort Erie being dead in the water, along with the news today that Kawartha Downs will cease racing at the end of the month, racing people are finally waking up to the truth:

The Government of Ontario and Racetrack Owners were NEVER your partners. 

They used you just like any business will use you if you don't have a proper legal business contract to protect yourselves in case of change. That is why workers have unions and suppliers make you sign contracts with an obligation to pay. We have laws for a reason and lawyers and courts to enforce them when others don't follow them. If you don't have a contract, you have nothing.

To say that the owner of Kawartha Downs was never in the slightest bit interested in the success and health of harness racing is a gross understatement. One look at the backstretch or the grandstand, not to mention the overall presentation of the racetrack, along with the contrast of the slots area tells you all you ever needed to know. It can hardly be surprising that when the option was there to get out of operating a racetrack was presented, that the owner of the track, Skip Ambrose, was going to take it. 
Lets be frank here. Skip Ambrose is there to make money. Horse racing in Peterborough is a money losing operation without the slots to supplement it. For him, it is just good business. Plain and simple. 
He was never your partner. You were just a business expense. The cost of doing business. Now, the government (who was always never your partner but just your loan shark) has cut off racing and they have told their henchmen (track owners) to take your cut and give it directly to them. 
Neither was ever your "partner". If you wanted protection from this in the first place, you should have negotiated it when you had the balance of power. The government wanted the locations that racetracks already had. The track owners wanted easy money with no risk. That is when you had the power. You should have made a better deal with significant penalties as out clauses....when you had the chance. Too bad now. Don't make that mistake again.
Here is just a sample of the comments on the link at the top of the blog.

"Am I surprised they are shutting down? absolutely not! Other than the slot facilities the grandstand and backstretch were a disgrace to the horses and their handlers and fans. Now that slot machines are not mandatory, to be joined to racing horses this will be the new reality at some locations, unfortunately. As an industry we must shoulder much of the blame by shooting ourselves in the foot by choosing to have a variety of organizations negotiating on our behalf."

This gets to the heart of the matter. Why do racing people have well intentioned amateurs looking after their affairs? If you are outmatched on these things, the results will speak for themselves. Any competent lawyer or businessman would have put safeguards into the contract so that they simply could not have the rug pulled out from under them. Horsepeople were so blinded by the pot of gold that slot money was going to bring them that they never considered that one day they would simply be cut out of the action because they were not needed anymore. That happens everyday in business. Why they thought they were immune to that is shocking.

"On any day there is live racing at KD, you will see the same faces at the meet. For the last few years, purse distribution has exceeded the betting handle (and consequently the track share of the handle) by a substantial amount. From a mile away, it was apparent to anyone who cared to notice that this was a business in deep, deep trouble. The public simply lost interest in harness racing as entertainment. When you are trying to sell a product nobody wants you will eventually go out of business. It doesn't matter that the guys and gals making the product love their jobs. Surely this outcome can't be a surprise to anyone."

Really, that is just how it is. The vast majority in that region (and Ontario to some extent) don't care if harness racing lives or dies. You can say that it is the big cities discarding rural Ontario, but Kawartha is certainly not any big city area. And those people don't care either. They don't go to the races and they don't care if there are races or not. Back before slots, the purses at Kawartha were so low that it wasn't worth even showing up to race. The product (without the slots) was simply not good enough. And even with a better product, there was no effort made to get the fans to come. Horsemen didn't seem to care about that either, as long as the purses were grossly overinflated. So, they share equal blame here. They lived by the sword, now they will die by it.

"Horsemen should have gone on strike years ago against this management."

Why didn't they? As mentioned above they were making piles of money and really couldn't care less if the track had any customers. The horsemen didn't care, the government didn't care and the track owner didn't care. Nobody cared. Except that two of those three had their bases covered, while the 3rd assumed that since everyone was making great money that the other two would not go looking to take their cut as well. As we all have learned from Walmart that just isn't the case. More is always better. Bigger is better. If you can take the other guys share you are going to do that, unless of course they have a contract and you can't. Now, the government needs more money to finance their debt, so they want a bigger slice. The track owner wants to maintain his cut and when the government takes that away, he wont have to care because he is not re-investing any of that now or then. The horse racing industry will lose, because while they were never partners, they were completely dependent on the other two and cannot survive without them. Just like when a huge company leaves town and all the locals are immediately out of work. They have the power and they know it.

"It's a shame but this track is a case study in why we no longer have the SARP program. Management took unfair advantage of this great program reaping huge rewards, but usurped the spirit of the deal and put almost nothing back into the facility, nor did anything to promote the racing product."

Spirit of the deal? Since when is spirit part of a legally binding agreement. Time to wake up and deal with the real world, not the utopian one that you believe exists. Management didn't take unfair advantage of anyone. You let them. You did nothing while they were doing that because you were riding the gravy train. Therefore, you endorsed that type of behavior and now you have to suffer for that. Sadly.