15 December 2008

Report: No Fort Erie Racing In 2009; 190 Employees Laid Off


NOTE: Most recent updates and thoughts can be found on the bottom of this post.

There was a meeting today between employees of Fort Erie and management today.

The first report has come from Rich Newburg:

190 Employees Out of a Job

FORT ERIE, CANADA - Fort Erie Race Track has announced there will be no thoroughbred racing in 2009.

190 employees, both union and non-union, will be laid off. A meeting is being held this afternoon at the track to notify employees.

The track has been losing money for the last several years, due in part to the installation of slot machines in all race tracks in Ontario, along with the competition from casinos in Niagara Falls, Ontario and Niagara Falls, NY.

Senior Correspondent Rich Newberg will have the latest on News 4 at 5 and 6.

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The Niagara Falls Review isn't sure yet. UPDATE: Now the Review is up to speed.
'What is known is Mayor Doug Martin is making preparations to hold a press conference Tuesday morning at Town Hall to make a statement on what everyone is assuming is bad news for the track, those who work there and for the community.

“Obviously this is a meeting between the owner and the employees," Martin told The Niagara Falls Review a short time ago. "It’s confidential between them. Once we understand what the full dynamics of the situation is we’ll be having a press conference at in the morning."
'
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More To Come
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Biz Journal Reports:
“It’s in serious doubt,” said Daryl Wells, track spokesman. “We’re losing money and Nordic is unable to keep sustaining those losses.”

'The track is also home to a 1,200 slot machine operation run by the Ontario Lottery & Gaming Corp. The slots, which have an average daily attendance of 2,623, will remain open for “the foreseeable” future, an OLGC spokesman said.'

This is a first for the OLGC. They have never had a track with slots go under before. The slots were supposed to compliment the racing industry. As stated here before, if the horsemen get over $4million from slots each year, the track owner also gets $4million from slots. That means the total profit from slots is over $40million per year right now. This means the government (OLGC) makes over $32million net. They do incur all the expenses from the slots operation though, but how much can that be a year? I see them doing everything they can to keep the Fort Erie slots open, but I also see that they don't care much about the track being open, or they could have relinquished a few million in profits to keep live racing going.
I still can't see that even with the $4million from slots that the track actually loses $7million a year. It just doesn't make sense.
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THOUGHTS AND RUMOURS
I just heard (a rumour?) that Fort Erie management signed over a check to the HBPA for over $2 million which is the horsemen share of the slots money to date not paid out in purses yet.

What should happen to that money? Give it to the horsemen who won purses the last two or three years at Fort Erie who earned 1-2-3 placings prorated on a percentage basis?

Give it to whoever runs the B races? Will it be Ajax Downs or Woodbine who winds up giving owners the out that Fort Erie provided if the track officially closes?

A "B" track is a necessary in Ontario for thoroughbreds (there are tons of B tracks for standardbred here). There are horses who don't poly and others who just can't compete for low claiming at Woodbine. Breeders and owners know that their horse is a possible Fort Erie horse from the get go. But take away the B track out, and there will be less owners getting into the game, especially when faced with having to go to the trouble and expense of having to go to the states with a cheap horse if they don't cut it at Woodbine.

There is also the rule that states if you claim a horse in Ontario you have to wait 90 days or for a meet to end to be able to run in another jurisdiction.

Owners who made not so great claims at Woodbine could at least run for cheaper within 30 days at Fort Erie. Now, without a B track or a plan to have cheap races in Ontario, owners will be stuck.

Nothing is official yet. Until a contingency plan is announced that states Woodbine will run extra races or that Ajax will take on 50-60 thoroughbred dates. The government could still give in to Nordic's demands and bail them out. Woodbine or another party could buy or lease the race track. There are still options, but I wonder if anyone who can make something happen cares enough.

If Ajax Downs gets the dates, I would like to see a thorough investigation of the government officials that gave Ajax the idea to put in a 5 furlong track when he did.
It just smells funny, because I was told by a source before the summer that Ajax already knew they were getting the thoroughbred dates.
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Actual press release from Jen's blog:

Nordic Gaming Corporation, the owner and operator of Fort Erie Race Track, held a meeting today with its employees who work on the horse racing side of their business.

The purpose of the meeting was to inform those employees that it appears that the Fort Erie Race Track will not be able to continue live racing in 2009. While Nordic will pursue every effort to try and find a way to continue racing in 2009, there are regulatory requirements that the Company must comply with, thus these employees were advised that their employment was being terminated effective March 31, 2009. This notice immediately impacts approximately 190 employees.

This decision has been a difficult one for the company; one which Nordic has delayed for several years. As most people are aware, the company has spent the last two years focusing on efforts to “Save the Track”. Over that time every effort has been expended to find a solution to keep the track operating. Nordic has, and continues to work, with all of the stakeholders, including the various Unions and their members. However, the company is unable to continue to absorb the substantial operating losses year after year, and hence the reason for the decision to begin preparing for closure.

The company will be working with its employees and their union representatives to keep them informed of all significant information in the coming weeks and months. In that regard Nordic will comply with it’s obligations under their collective agreements as well as with the Employment Standards Act.

Nordic has also notified The H.B.P.A. OF ONTARIO and The Ontario Racing Commission of this pending action by virtue of their application for race dates to the Ontario Racing Commission, as well as in meetings and conversations with both organizations. Both these bodies have already taken action with respect to this issue, and they both have communicated those actions through public communications.


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Another rumour has the slots closing on December 31st. Can't see that happening though, but who knows?
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SIEU wants McGuinty to renegotiate slots deal with Fort Erie so that the owner can get bailed out
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From the Review:
Niagara Falls MPP Kim Craitor said a meeting has been scheduled for this afternoon in Toronto involving senior-level track officials and representatives of Ontario’s Economic Development and Trade Minister Michael Bryant.

Craitor, who has rearranged his own schedule to attend those talks, said it’s possible the meeting could resolve the situation.

He wouldn’t say what Nordic Gaming is asking for or what the province is willing to do to help.

“We have some things on the table,” said Craitor. “You can’t directly fund the race track. I mean, it’s a private business. That’s just the reality, but we want to keep it open, we want to figure out a solution to this.”

Craitor continued: “This (meeting) is about how to keep the track operating and what commitments will we (the government) be able to get from them so that we’re not going to go back at this next year.”

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This could be an affective ploy by Nordic Gaming. Getting a $3 million per year commitment from the government increases the potential sales price (which right now might be in the negatives) by up to $20 million. Nordic definitely wants out.

My source, who told me that Ajax was getting the B racing (I was told in the early summer or late spring), said that the powers that be don't like Nordic and want them out of there.

I have a feeling Nordic has two sets of books. One set shows a tremendous loss (the one the government now knows about). The other shows the track is possibly profitable. That one is for potential buyers. I could be wrong, but with all the business Ponzi schemes being discovered, I just don't trust any company that is a subsidiary of a subsidiary of a subsidiary.

It just doesn't make sense that harness tracks that have more race dates and probably have equal purse money to hand out from their portion of slots can show a profit where Fort Erie shows a loss. It makes no sense at all. I can understand that thoroughbred tracks pay more insurance than harness tracks, and Fort Erie has to also pay for a backstretch, when many harness tracks do not, but how much more does that cut into their costs....surely not $3 million a year.
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Mayor says that this isn't a ploy to pressure the government
Timing of the layoffs coincide with Ontario labour laws according to Martin.
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Talks continue There will be no long term solution as long as Nordic still owns the joint.
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In today's Toronto Star: MPP Sees Some Hope In Talks About The Track

Today's rumour: The government wants to look at Nordic's books, but Nordic is refusing. If true, this is not shocking, because how can they possibly be losing money when tracks like Beulah and River Downs get by without slots.

Again, if the rumour is true, how possibly can the government even consider bailing out Nordic, if Nordic won't play ball?

22 comments:

railbirdbrad said...

As predicted from your's truly,it makes no sence to keep the track open.Merry Christmas,,,

Anonymous said...

Looks like most fort erie stock head to beaulah park then slaughter house.

Geno said...

Not surprising, but still very disappointing...was just starting to enjoy it.

Pick4player said...

any bailout money will go to the auto and mining industry before it reaches horse racing... can you imagine the backlash if horse racing got preference for bailout funds?

mj said...

I dont think the slots should continue to operate. The casino was put in there to support the racing, not the other way around. Why should the government care if the live racing disappeared, they still make money, more money without it. Of course they will want to see the horses gone if they can still operate the slots and hoard the money. Will the casino profits in 2009 be put towards the horsemen? Where does it go?

Keith - Triple Dead Heat said...

This is sad news and I hate the thought of a track with such history closing down.

Fort Erie is home to an important triple crown race and i hope that the powers-that-be will pool resources to keep the track going.

As for Ajax...there should be room for another thoroughbred track in Ontario. As Cangamble stated, there are several standardbred tracks.

mht said...

My suspicions are that Nordic Gaming is using this as a ploy to get the government's attention. Nothng else has worked, so why not try this angle and see what happens.

MJ-while I agree with also closing the slots if they are not used to supplement the horse racing, do you really think the government cares? They've got two casinos in Niagara Falls that will pick up the slack if Fort Erie slots close.

Anonymous said...

I agree its a ploy. Layoff means nothing. They'll just call them back once a deal is struck.

Now The Review is talking about a meeting tomorrow with Nordic and the Minister of Something or Other. How much you wanna bet the outcome is Ft Erie and Ajax (with help from Woodbine) are splitting 60 Dates next year. One will run 3 days a week for 10 weeks before July 1st and the other will run 3 days a week for 10 weeks after July 1st.

Anonymous said...

I feel really bad about the workers of Fort Erie Racetrack who are losing jobs because of this announcement...but for Nordic and the Mayor of Fort Erie to consistently blame the OLG for not supporting them with $3 million a year is ridiculous. If the mayor cares so much, why doesn't he offer his share of the Slot Revenue to the Racetrack that he gets every year. Everybody had great things to say about OLG when profits were skyrocketing years ago. Now that there are tough times because of many different reasons (no smoking, competition, other factors)and the town and Nordic aren't making money...now OLG is the bad guy. Mayor Doug Martin on numerous occasions has stated in the papers how the Slots revenues are down like it's the Slot Facilities fault. The problem with the Town and Nordic is when they were making huge money, they went and spent it right away instead of saving some for a rainy day, like now. As well, no one wants to bring up anything about how poorly managed Nordic is. There is nothing innovative going on at the track. EL AD (Nordic Owner) is far away from the reality of how poorly run his company is. Here's some innovation for Nordic...OPEN UP ON SATURDAYS FOR RACING...HAVE $1 HOT DOGS ALL THE TIME...Families will come on out Saturdays and buy a dozen hot dogs for the family.

railbirdbrad said...

Hello, closed is closed,how hard is that to understand?

Anonymous said...

Management needs to be fired and put little effort into advertising. I agree bring back Saturday racing maybe even bring back the play ground for the children. There are a million ideas that can be done.

Cangamble said...

Management probably had their hands tied by an owner who wants a miracle man to come along and buy the place for 3 times what it is worth.
The owner has no business in racing, and the place would have a shot under new ownership.

Anonymous said...

It's nice to see that the comments are addressing the Nordic MGMT and not just accusing OLG of not helping out. If Nordic gets money from the GVT, then maybe every Ma and Pa shop who have had to close because of bad times, should get money from the GVT too.

Anonymous said...

What is the rumored asking price for the Fort? Maybe they should do the honorable thing and sell it for the same amount they got it for. But seriously, do we have another Hialeah here? Those guys probably have 50 properties all over the world sitting vacant, and it's no skin off their nose. They could just sit on it, no?... How does Ontario extract itself from Nordic to get the show on the road again?

What needs to be done to make it viable is a whole other story as it isn't an easy problem, but having someone trying vs someone giving up has got to be better for the community. Personally I don't mind the contraction in racing (too many horses, too many tracks) but if one had to choose, I'd go for the nameless faceless ones to get the axe first...

KH

mj said...

The government wants a long-term solution and justly so. This has been going on too long. FE got hit by the flagrant proliferation of casinos, 9/ll problems at the border, the Cdn. dollar rise, etc. The dollar is now coming over to Canada from the US again, but the problem of passports next summer will cause issues again. FE needs to provide a new outlet for gambling and that could be it's saviour - that and proper promotion. Fort Erie will be a dying town without the track, people will hit the welfare line and Nordic will have a lot of worthless land. Who will want to move to Fort Erie then? Everyone will want out and their land will definitely not be desirable.

mj said...

also, i do wonder - where do the rumours originate? How much truth is there to them? Craitor told me the track is not for sale. Fancy that?

Anonymous said...

I dont think the rumour about the govt wanting to see teh books makes much sense. Wouldnt OLGC and Racing Commission oversight give them access already?

Ed said...

I believe Ajax Downs has a contract with the QROOI (Quarter Racing Owners of Ontario) for two more years that says no TB racing during that time. Also Ajax Downs does not have a lasix program yet, that is at least a year away when the new barns and test barn are due to be built.

Ed W

Ed said...

I know originally just a chute and hook was planned, but in order to be approved for slots it stipulates somewhere that it had to be an oval. Also the QH's will be able to take advantage of the 5/8 track there will be hook races (880 yds) 1/2 miles races for QH's they are big in the states. Every think I hear is that Ajax would like to have the TB'S but that is at least 2-3 years away from being possible.

Anonymous said...

I can't see the Slots closing...the town gets money, the Racetrack and Horsemen get money and the government gets money. I know Horseracing is losing it's appeal, but could Night Racing with Jugheads be an option to spur some night life and revenues into the place. Some people do work during the week, so attending the Racetrack at night or on weekends would be a viable option. This year Racing days were Monday, Tuesday, Wednesday and Sunday (I think)...doesn't make sense to me.

Cangamble said...

Ed, thanks for the insight.

Anon 12:46AM, jugheads in Ontario get very little play no matter what their time slot is.
But thoroughbred night racing isn't a bad idea, especially Monday and Tuesday nights. The problem is that it takes a capital investment of between 600,000-1 million for lights.
Do you think Nordic can get the government to pay for lights? I don't because harness tracks do not want more competition, and they'll scream about it.

Anonymous said...

What the 'B' racing meet really needs is another site to split the dates with whose slots are far enough away so as not to cannibalize FE slots. Since slots run year around, effectively this would be a way of pouring twice as much slot money into the same bunch of horses.

Ajax seems to pretty much fit the bill but the QH people obviously dont want 'their' slot money propping up TB racing.

Grimsby anyone? Brantford? Kingston?