Proven Strategies: No Horsing Around with Independent Contractors

“Proven Strategies” is a new regular series in the TDN, presented by Keeneland. It is written by Len Green of The Green Group and DJ Stables, who won the 2018 GI Breeders’ Cup Juvenile Fillies with Jaywalk (Cross Traffic).

by Len Green, John Wollenberg & Agnieszka Kagan

It is not uncommon for pinhookers or trainers to employ seasonal workers at sales or around the racetrack. Some of these employees may be considered as independent contractors.

The perception that employers are attempting to circumvent paying payroll taxes by classifying workers as independent contractors has caused the Internal Revenue Service (IRS) to step up its efforts in analyzing this controversial topic more closely.

This article provides an overview of the factors examined by the IRS and offers insight into how to better secure independent contractor status.

The Advantages of Employing an Independent Contractor

Traditionally, many employers have classified workers as self-employed or as independent contractors. There are various benefits to this classification:

1) By positioning themselves as “self-employed” or independent contractors, no payroll or income taxes need to be withheld from paychecks.

2) Independent contractors do not have to be covered under pension plans and employers save on insurance and workmen’s compensation costs.

The IRS Perspective

To help determine whether a worker is an employee or an independent contractor, the IRS has developed a 20-factor control test based on common law principles. The 20-factor test is an analytical tool only, there is no “magic number” of relevant points. The factors are merely points for consideration in evaluating the extent to which the employer can “direct and control” the worker.

Below are some of the more relevant factors to consider when evaluating whether an individual is an employee or self-employed/independent contractor.

Employee Factors

Instructions: A worker who is required to comply with another’s set of instructions is ordinarily considered an employee.

Training: Formal or informal training at an employer’s expense is indicative of an employer relationship.

Integration: Integrating the worker’s services into the business operations generally shows that the worker is subject to control.

Services rendered personally: If the services have to be personally rendered, the employer probably controls the means as well as the results.

Hiring, supervising and paying assistants: Unless workers hire, supervise and pay their own assistants, if any, they are likely an employee.

Continuing relationship: The longer the liaison, the more likely an employee.

Full-time required: A full-time position is indicative of an employer-employee relationship, whereas independent workers choose their own hours.

Oral or written reports: Regular accountability of progress is usually a sign of control.

Payment of expenses: Reimbursement tends to support an employer-employee relationship.

Self-Employed or Independent Contractor Factors

Hours of work: Independent contractors control their own time.

Order of sequence set: Only a nonemployee is free to determine his/her own approach, pattern, priority and schedule.

Multiple assignments: Workers who perform more than one job at a time for multiple different businesses are likely an independent contractor. Exercise riders at tracks tend to fall into this category especially if they rotate among barns or farms. Payment by hour, week or month:Independent contractors are typically paid by the job, not in regular pattern.

Tools and materials: Independent contractors provide their own tools and materials.

Economic loss: A worker who is subject to the risk of economic loss due to a liability for expenses is an independent contractor.

Right to discharge: An independent contractor generally cannot be fired if the contractual specifications are met.

Right to terminate: Employees have the right to terminate their job without incurring liability.

Safeguards to Withstand IRS Scrutiny

Since an IRS audit can result in an assessment of penalties and interest, in addition to the employer/employee payroll taxes that will be due, it becomes incumbent to take measures to preserve the intended working relationship.

Suggestions from The Green Group

1) Apply for an advanced ruling, Form SS-8, entitled “Determination of Worker Status for Purposes of Federal Employment Taxes and Income Tax Withholding.” The advantage to this filing is to get clarity as to whether a worker is an employee. The form focuses on behavioral control, financial control and relationship of the worker.

2) Enter into a written consulting agreement with language coordinated to the 20-factor control test. The contract should specify the nature of the work to be performed, discuss the terms and conditions and state the responsibilities of the independent contractor.

3) Utilize practices that are consistent with recognized practices in the horse industry, specifically with farm owners, pinhookers and trainers.

State Interpretations

Please check as to your state’s specific regulations. Since some states apply their own standards, often stricter than the IRS rules in terms of reclassifying independent contractors into employees. Some use a three-prong “ABC” test with the employer having the burden to prove that the relationship is that of an independent contractor, rather than as an employee. In other states, an independent contractor is someone you hire to work on a task unrelated to the field of business you are associated in and whose work you have no control over. While still other states use a “level of control” test.

Department of Labor Audits (DOL)

As if a trainer’s life isn’t difficult enough, the DOL has started extensive audits at racetracks to make sure workers are being properly paid for their hours. Since many trainers do not traditionally use “time clocks” to keep track of hours worked, this becomes an expensive issue.

Our team has had success in this area.

Summary

You must analyze whether a potential employer-employee relationship exists with people who work for you.

Penalties can be imposed for failure to withhold income and employment taxes, and qualified retirement plans could be jeopardized if employees who should be covered are not due to misclassification as independent contractors.

Bottom Line

You should have an accountant who is familiar with the Thoroughbred Industry review your practices. You might need to change your procedures to satisfy the complicated IRS rules. If the IRS challenges you and wins, you may be subject to interest and penalties.

If you have any specific questions, please call us for a free one-hour consultation.

The Green Group

Phone: (732) 634-5100

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Louisiana Partners Score With Louisiana Bred Colt at Keeneland

Louisiana Partners Hit a Home Run

Perry Judice and David Meche purchased Semillon (Eskendereya), carrying her first foal by Outwork, for just $35,000 at the 2017 Keeneland November Sale and were rewarded Monday when the resulting [Louisiana-bred] colt (hip 132) sold to Chris White for $120,000.

Consigned by Select Sales, the bay colt hails from the family of GISW Cotton Blossom, GSW Vicarage and MSW Miss Atlantic City.

“We were not expecting him to bring quite that much,” said Meche, owner of Muscadine Farm. “He has really put on a lot of flesh in the last 60 days. It is night and day. He has really grown. He was ready. He looked the part and we thought getting him in the sales ring as soon as we could was best.”

Meche continued, “We like the colt because if his attitude. He is a tough colt and he has a good walk. That is what we liked the most about him.”

This is not Meche and Judice’s first rodeo when it comes to pinhooking a yearling they purchased in utero.

“We have always bought and sold and had success selling some young babies in the past,” Meche said. “We foal out, prep them and bring them here. Our goal is to buy quality mares in foal to young stallions to bring the foals back to market.”

He added, “The mare is rebred and in the regional market in Louisiana.” —@CDeBernardisTDN

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Pregnancy Problems: How to Increase Your Chances of Delivering a Healthy Foal

By Jen Roytz

What could be that difficult about breeding? You select a stallion that suits the mare and your goals, breed your mare, then keep her fed and watered for 11 months until you’re rewarded with a healthy foal.

If only it were that simple.

There are many reasons a mare can prove difficult to get into foal, or to stay in foal. It could be as simple function of age. It could be results from a complicated delivery. Or, it could be a multitude of other reasons.

Regardless, now is the time breeders should be paying special attention to preparing their breeding stock for the upcoming season, and for those with known issues there are added safeguards and steps breeders can take she gave themselves and their horses the best chance at a successful pregnancy.

Issues that Can Impact Conception

There are many reasons a horse may have issues getting impregnated, the most basic of which are her age, not breeding her at the appropriate time during her cycle, or poor reproductive health of the mare or stallion.

A typical mare’s ovum, or egg, begins to lose viability within just five to six hours post-ovulation, and typically loses all viability within 24 hours. While a stallion’s semen typically remains viable for 48 hours, a reduced number and quality of a stallion’s semen can limit its viability to just a few hours. Age can negatively impact these timeframes for both sexes.

The mare’s body condition can also play into her chances of becoming pregnant. Most veterinarians recommend mares to rank around a 5 or a 6 on the Henneke Body Condition Score (BCS). When a mare’s weight and overall health decline, so too does their reproductive efficiency.

Outside of age and general health-related issues, endometritis is the most common reason for infertility in mares. This condition, which is an infection or inflammation of the lining of the uterus caused by foreign contaminants such as bacteria or spermatozoa, can either be acute as a result of breeding (both artificial and natural), reproductive examination or as a result of poor conformation.

“There are simple, but important steps one can take to improve the chances of conception, including a physical examination of both the mare and the stallion, a careful and thorough reproductive exam of the mare prior to the breeding season and during the estrous cycle during which breeding is to occur and to optimize the overall health of the horse,” said Kristina Lu, VMD, an equine reproductive specialist with Hagyard Equine Medical Institute.

Early vs. Late Term Pregnancy Loss

Just as there are a number of reasons a mare can be difficult to impregnate, the same can hold true for keeping her in foal. Most pregnancy losses occur in the initial weeks and months of pregnancy.

Again, age can play a role. As mares age, they may experience uterine fibrosis, which can lead to a placenta that is less-efficient in getting nutrition to the growing fetus.

Other causes for early-term pregnancy loss can be unavoidable complications, such as genetic defects or embryonic abnormalities. They can also be due to uterine infections that may have been low-grade and undetectable at the time of breeding/conception but proliferate in the subsequent weeks and months.

Late-term losses can have their own set of culprits.

“Placentitis, umbilical cord torsion, systemic illness can all cause late, and in some cases mid-term abortion in mares,” said Lu. “Diseases such as leptospirosis, equine herpesvirus 1 or 4 and equine viral arteritis are threats to a healthy gestation as well, some of which can spread quickly through a herd and may not generate obvious clinical signs other than abortion.”

Then there are also those mares that have little trouble carrying a foal to term, only to be prone to dystocias (difficulty giving birth), which can be caused by congenital abnormalities, such as contracted limbs that prevent the foal from properly fitting through the birth canal. This, in turn, can lead to oxygen deprivation in foals.

Safeguards to Protect Both Mare and Foal

While some complications are simply unavoidable, there are safeguards and protocols that can be implemented to support the gestation and delivery of a healthy foal.

“Some simple things horsemen and women can do to protect their mares and future foals are to maintain good general health of a mare, conduct thorough reproductive examinations, monitor the mare’s reproductive tract before and after breeding, ensure regular core vaccinations, consider screening for placentitis if the mare has a previous history and consider vaccinating for herpes or leptospirosis if appropriate,” said Lu. “Breeding as close to ovulation as possible can also be of benefit. On the other hand, repeated breeding during an estrous cycle (average 21 days) may increase opportunity for endometritis in some mares.”

Above all else, staying in regular communication with your veterinarian is one of the best forms of protection one can afford their mares.

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Election Aftermath Mixed for Thoroughbred Interests

By T. D. Thornton

In the aftermath of Election Day, the gambling landscape shifted significantly overnight in three states. But the results are mixed in terms of how the measures will affect Thoroughbred horse racing.

In Arkansas, Oaklawn Park won the right to add full casino gaming and sports betting to its existing wagering menu of pari-mutuels and electronic gaming. The vote percentage was 54-46.

In Idaho, historical horse racing (HHR) video gaming at tracks was defeated by a 53-47 margin, putting the state’s already tenuous Thoroughbred future in even more of an endangered flux.

Florida voters banned greyhound racing by a 69-31 margin, with a 2020 sunset date but a provision to keep other forms of gaming at those tracks.

A separate Florida measure that passed by a 71-29 margin mandates that any future changes to casino gambling have to be approved through statewide citizen-initiated ballot measures, and not the Legislature.

All tallies in this story cited are listed in rounded percentages, and are according to results posted as of 2 p.m. Wednesday on Ballotpedia.com.

Arkansas

In Arkansas, the passage of Issue 4 amended the Arkansas Constitution to grant four casino licenses in specified locations. Oaklawn in Hot Springs and the Southland greyhound/gaming venue in West Memphis were granted “automatic licenses” for expansions “at or adjacent to” their existing operations. Both tracks already offer electronic games of skill under a 2005 state law.

Additionally, one casino license will be up for bid in both Pope County and Jefferson County.

As part of the Arkansas measure, “casino gaming shall also be defined to include accepting wagers on sporting events.”

The ballot initiative also included a tax revenue distribution plan that mandates “17.5% to the Arkansas Racing Commission for deposit into the Arkansas Racing Commission Purse and Awards Fund to be used only for purses for live horse racing and greyhound racing by Oaklawn and Southland.”

Idaho

The defeated Proposition 1 was designed to once again legalize HHR video terminals at tracks in Idaho, where seven fairs circuit tracks raced short meets in 2018. The measure would have granted HHR gaming rights to any track that cards eight calendar dates annually, and passage would almost certainly have meant the re-opening of Les Bois Park, formerly Idaho’s only commercial track.

Idaho had briefly legalized HHR in 2013 but the law was repealed in 2015. When the state pulled the plug on HHR, Les Bois, which was one of three locations that had the machines, shut down. Les Bois spent heavily to support Proposition 1, and reportedly had several hundred HHR machines still on the property ready to resume operation, along with live racing.

Florida

Florida’s two approved ballot measures might end up raising more questions than they answered in an already confusing state for gambling.

The Amendment 13 ban on dog racing actually had the support of some of the state’s 11 greyhound track operators, who saw it as a de facto way of attaining “decoupling” from less-profitable pari-mutuels while retaining lucrative gaming rights.

Some “What happens next?” scenarios could include horse tracks angling for similar decoupling rights based on this precedent. And with greyhound racing mandated to end, animal rights activists might now more closely focus on horse racing.

Carey Theil, the executive director of GREY2K USA, one of the leading backers of the ban, told the Orlando Sentinel that the vote appears to mean the greyhound industry will likely be “swept away in the night” and that “the historical consequences of this are incredibly significant.”

Amendment 3, which took control of future casino gambling decisions out of the hands of the Legislature, was proposed by Voters in Charge, a political committee largely financed by the tourism-centric Walt Disney Co. and the Seminole Tribe, which operates existing gaming facilities. According to published reports, that committee spent more than $31 million on the effort to transfer future casino decisions to voters.

According to a post-vote analysis in the Tampa Bay Times, “While the amendment, in theory, gives voters the power to expand gambling, it could actually make the process more difficult. Changing anything by voter decision is a long process, and would therefore keep competition low for the Seminole Tribe and ensure a more ‘family friendly’ tourism environment here, to Disney’s benefit.”

The Miami Herald recapped the vote this way: “Opponents to the amendment—like NFL teams, online betting sites like FanDuel and DraftKings and dog and horse tracks—have argued that it is unclear what affect the initiative would have on previously authorized gambling sites across the state.”

United States Congress

Two U.S. Representatives in positions to have an impact on Thoroughbred racing both won re-election bids Nov. 6.

Andy Barr (R-KY) and Paul Tonko (D-NY) are co-chairs of the Congressional Horse Caucus. They are also co-sponsors of HR 2651, the Horseracing Integrity Act of 2017, which was first introduced in a different form in 2015. Its revised version has not had any legislative action since a June 22 subcommittee hearing.

Barr won by a 51-48 margin. Tonko’s winning margin was 68-32.

Lexington Mayor

Linda Gorton bested Ronnie Bastin by a 63-37 margin in the Lexington, Kentucky, mayoral race.

In a profile published the week prior to the election, Gorton told TDN that “I have a long history of working with the equine industry here. I know many of the horse farm owners and managers. I understand their concerns…. That’s important for me, to have people understand that I have worked with this industry for many, many years, and have great experience in doing that.”

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Classy John the Definition of a Happy Accident

By Brian DiDonato

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Classy John & Dallas Stewart. Sarah K Andrew photo

The story of 2-year-old colt Classy John (Songandaprayer) looks like a pretty interesting one on paper, but is even more so than meets the eye. A $12,000 Equine Sales of Louisiana purchase in May off of just a gallop, the Valene Farms-owned Dallas Stewart trainee shipped up to Saratoga last Saturday to romp by six lengths at 12-1 odds in a typically tough GI Travers S. day maiden special weight (video replay).

The Louisiana-bred beat a pricey group in the process, defeating the likes of an $850,000 2-year-old acquisition and a $650,000 yearling as well as several fashionably pedigreed homebreds.

Classy John was an excellent value purchase to be sure, but as it turns out, he wasn’t an intentional one.

“We got a little confused. I was on the phone, and I thought I was bidding on 15, but it was 14,” owner Murray Valene revealed. “But it turned out to be a pretty good buy, huh? We didn’t have any idea what the horse looked like, but that’s the way it goes. You never do know. It turned out to be a really nice little horse, with some decent pedigree.”

Classy John is the third foal and first to race out of Kitty’s Got Class (Old Forester), who handily won her first three races, including two stakes, as a Woodbine-based juvenile.

After looking at the colt’s page, and him as an individual, Valene began to come around to his purchase.

“I took one look at him when he got in and said, ‘Boy, I like the looks of this colt.’ So we sent him up to Dallas because he looked like he was above average. He was just a good-looking horse.”

Hip 15, an Eskendereya filly who went for $9,000, has not yet started or been credited with an official work.

Once in Stewart’s program, Classy John gave some indication that he was a nice horse, but he really caught his trainer’s attention after blazing through five panels in a bullet :58.60 from the gate at the Churchill Downs Training Center Aug. 17.

“Two or three weeks before [the race, on Aug. 9,] he worked in [1:01 4/5], but in the last work, he worked in :58 3/5 from the gate,” Stewart noted. “So I called the clocker to make sure that was legit–I was up here [in Saratoga]. The clocker said he might have even gone a little faster than that–it was unreal. So I talked to Murray and told him there was a race on Travers Day. Murray’s always game for anything, so he said, ‘Let’s go for it.’”

Valene and Stewart already had another runner for the card in last year’s local GI Hopeful S. third Givemeaminit (Star Guitar), who checked in eighth in the GI H. Allen Jerkens.

Stewart admitted to wondering before the race if his decision to ship Classy John up to the Spa was the right one.

“I got to thinking that maybe it wasn’t the right thing to do with the crowd and everything,” he said. “We’d have to fly him up on Wednesday, gallop him Thursday and Friday and then run Saturday. So I was a little concerned about that, but it looked like it would be the first race of the day, so we went with it and he handled it great.”

A fast work doesn’t necessarily mean a fast race, but Stewart was confident in Classy John’s ability.

“He worked so good, and we had the video of the work, so I saw it,” he said. “Plus, I talked to [jockey] Jack Gilligan who worked him and he said, ‘He is really, really nice.’ So we just got him up here and that’s how it went–he just slaughtered ’em.”

Classy John shipped back to Kentucky Sunday morning, but will likely return to New York for the Oct. 6 GI Champagne S. He is not Breeders’ Cup nominated.

What made the performance even more special was that Classy John is named for Valene’s father, John Valene, who passed away last Tuesday at the age of 100.

“My father passed away on Tuesday, and I flew up on Friday to watch the races,” Valene said. “So, just given the name and the circumstances and everything else, it’s extra special and I think he’s going to be a nice little horse. Hopefully, he stays healthy, because in this game you never know, but I think he’s for real.”

John Valene, who had attended the races at Canterbury Park just a couple weeks ago, first got the family involved in racing in the early 1960s when he claimed a horse who Murray Valene says subsequently won his next seven starts.

Murray Valene’s racing interests later grew significantly, and at one point Valene Farms had around 140 horses in training. He now has about a dozen on the track. Valene is also associated with Louisiana’s Clear Creek Stud, of which he jointly owns the property that it stands on. Valene has mostly campaigned Louisiana-bred or sired horses, including champions in Minnesota and Illinois.

But this wasn’t by any means his first win up at Saratoga.

Valene Farms took the 1993 GII Adirondack S. with $7,000 purchase Astas Foxy Lady (Zuppardo’s Prince), and doubled up in the same race (via DQ) exactly 20 years later with the Stewart-trained Designer Legs (Graeme Hall). The latter was a $10,000 yearling acquisition.

“It just goes to show you–you never know based on what you paid for a horse what you’ve got,” Valene said. “It’s all about the heart and what’s on the inside. Nobody knows that until they run.”

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Keeneland Reinstates April Sale, Tweaks September Format

Keeneland will reinstate its April Sale in 2019, as one of three changes to its sales calendar announced Thursday. The April auction, last held in 2014, will be staged as a one-day sale of 2-year-olds in training, as well as horses of racing age. Dates for the preview and sale will be announced at a later date.

“Keeneland’s April Sale produced a number of champions and Classic winners, including 2017 champions Lady Eli and Roy H in its final edition in 2014,” Keeneland Vice President of Racing and Sales Bob Elliston said. “Horsemen are very supportive of the sale returning this spring, and we are excited to expand the auction from previous years by offering a limited number of horses of racing age.”

Keeneland also announced the format for its upcoming September Yearling Sale. Book 1 of the auction, which was one session in 2017, will be held Monday through Thursday (Sept. 10-13) this year and will include approximately 1,000 yearlings with sessions beginning at 11 a.m. After a dark day Friday, Book 2 will be held Saturday and Sunday with sessions beginning at 10 a.m. The Book 2 portion of the 2017 sale was three days. Books 3-6 of the September sale will be held the following Monday through Sunday (Sept. 17-23).

Keeneland introduced a bonus structure tied to its one-session Book 1 in 2017. With the longer Book 1 section in 2018, the bonus will not be applicable to graduates of the sale this year.

“Keeneland engages in an ongoing dialog with our clients to collect their feedback and adapt our sales formats to meet the ‘market of the moment,’” Elliston said of the changes. “The market is fluid from year to year, and our primary goal is to create a sales environment that will produce the best results for our sellers and buyers.”

Finally, Keeneland announced it will open its November Breeding Stock Sale with an exclusive Book 1 session to be held Monday, Nov. 5.

“The Breeders’ Cup World Championships are at Churchill Downs the weekend before the November Sale begins, so what better way to continue the excitement than to host a select Book 1 on opening day,” said Keeneland President and CEO Bill Thomason.

The entire November Sale schedule will be announced later.

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Body and Soul: The Ten Commandments of Stallion Selection

By Robert D. Fierro

We know what you’re thinking: Whatever in the world would possess someone to talk about stallion selection just before the breeding season officially ends? While some might accuse your correspondent of being somewhat possessed, in some ways, there is a logical reason for exploring this subject at this time: Everybody starts thinking about next year when the breeding shed doors close up for the season.

Stallion managers start looking more closely at prospects for the next season. Sometimes they look to stay on a roll of success after breeders stormed the doors for a newbie or freshmen sires burst out in style. Sometimes they need to assuage the frustration of a newbie failing to attract much interest, or those with a couple of crops failing to show much competence or class.

Breeders conjure up similar thoughts, especially those who booked to stallions whose first or second crops sold like hotcakes at the yearling or 2-year-old sales, but have demonstrably proven their shortcomings a week or so after their mare has been bred to one of them.

Guilt trips travel over various routes.

Below we present a check list of factors that might raise an eyebrow or two as to what we have referred to as the “Ten Commandments of Stallion Selection” (no apostacy intended, and we even phrased most of them as questions rather than dictates). While it is more geared toward the breeder than the stallion manager, there might be a nugget or two for all to find interesting, if not helpful.

[I] How Did He Run? The best sire prospects–even among sprinters–gain early position and have the cruising power, stride length, and thrust (kick from behind through hocks and quarters), to outlast the rest at the end. These horses are more efficient. On the other hand, deep closers–including closing sprinters–may be less efficient due to biomechanical issues which force them to settle, get into rhythm, and then win on momentum. It’s an axiom of genetic probability that the more efficient body will have the best chance of replicating itself in a population of mares where the majority are closer to being reasonably efficient.

[II] How did he move? Did he move as to give an appearance of running with his nose to the ground–like Danzig, Deputy Minister, A.P. Indy, for example? Did he run with his neck extended straight ahead and move in a rhythmic motion with his shoulder extension–like Affirmed and Alydar? Did he run with his head up, floating along like a ballet dancer–such as Montjeu? Which style defined your mare, and do you want to match it or blend it with another style?

[III] Where, and on what surface, did he run? The majority of leading sires in Kentucky–and in most major breeding states–raced successfully in New York, and by extension on the major circuit which includes Churchill Downs, Keeneland, Gulfstream, Santa Anita and Del Mar. Some may have done well overseas before racing here, but for the most part you want domesticity in a race record.

[IV] Is he a square, a rectangle, or a trapezoid? This is an assessment of body set and takes some eye adjustment. A square body will include equal front and rear leg length and relatively short body length–you see a square. Rectangle would include those with legs that might be the same length as those on a square body, but the length of the back and body would be long, so you see a rectangle. A trapezoid would be a body set that is to the eye either square or rectangular, but the body itself is lower or higher at the elbow or flank thereby generating either a downhill or an uphill trajectory.

[V] Is he Derek Jeter, Wilson Kipsang, or Tom Brady? Now, move around to the front and, still keeping your eyes above the knees, try to get a handle on this guy’s girth–i.e. how wide or how narrow he is. Jeter is agile and versatile, Kipsang is lanky and long-winded, Brady is as balanced as Jeter but not as agile. Think of the athlete you are viewing and determine what kind of athlete you are looking to breed.

[VI] Is he a “sport?” Biologically speaking, a “sport” is “an organism that has characteristics resulting from chromosomal alteration–a living thing that has (or can develop) the ability to act or function independently.” In the vernacular, that refers to a person or animal who appears to be completely different than what was expected, but manages to establish itself as a success. In racing, that could mean success on the racetrack, and either success or failure at stud. California Chrome is a bit of a sport.

[VII] Kick the tires. It is much easier to breed for one trait than two, and heaven forbid a stallion has bad front wheels as well as being very short in those legs. You might want to send a long legged, correct, mare to him, but you might not get a correction for both factors unless the rest of their physical traits are close. Try to do your genetic homework here–find out if bad front wheels are a trait of the sire’s pedigree, or whether the wheels were an environmental accident, e.g., awkward position in-utero, nutrition as a foal, etc.

[VIII] Who’s his daddy? Line or branch founders are generally consistent in siring the type of individual who helps establish that offshoot. Fappiano’s branch of Mr. Prospector’s line is far different than Gone West’s, Smart Strike’s and Forty Niner’s in many key aspects–each branch is quite consistent in expressing the founder’s size, aptitude, or personality, for example

[IX] What stock did his momma come from-and who was her daddy? You can quickly eliminate a stallion from consideration on the strength of the broodmare sire and his sire-line. Check the list of leading sires over the past 10 years and note which were produced by mares whose sires and maternal grandsires made no lasting impression on the breed–love that phrase, memorize it. Look at the six-cross pedigree of the stallion prospect and ask yourself, “Does this work?”

[X] Be wary of a stallion prospect whose name you cannot pronounce or spell. Years ago a breeder asked whether we thought of a new stallion, whose name he pronounced “Abajoenee.” Puzzled, we asked other pertinent questions but finally asked how the name was spelled. He spelled it and we then informed him that the name was pronounced “A-bag-in-one” (he was by Devil’s Bag). The man preferred his pronunciation and eschewed breeding to that horse.

Abaginone notwithstanding, such is the way of the world, and our game.

Bob Fierro is a partner with Jay Kilgore and Frank Mitchell in DataTrack International, biomechanical consultants and developers of BreezeFigs. He can be reached at bbfq@earthlink.net.

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750 Horses Evacuated from Gulfstream, Others Stay Put

By Bill Finley

With Hurricane Irma bearing down on the Florida coast, Gulfstream officials have ordered the evacuation of the barns they felt were most vulnerable to damage from the storm. According to Bill Badgett Jr., a member of the upper management team at the track, about 750 horses have already left the track. Trainers were given the option of either sending them to Ocala or to Palm Meadows.

The barns that were evacuated were the ones closest to the backstretch entrance on Hallandale Beach Boulevard. Not only are they the oldest barns on the Gulfstream backstretch but they are in a lower-lying area than other barns are more prone to flooding.

“The good thing was there was so much notice in advance, we are able to jump on this thing before it got too bad,” Badgett said. “We started preparations a couple of days ago and we’ve gotten the horses out. On top of everything else, we’ve been dealing with a shortage of horse vans. But everybody has been working diligently to help one another out.”

Badgett said about 500 horses will remain on the Gulfstream backstretch through the impending storm. They will all be housed in the newer barns or tents that serve as barns. In addition, the nearly 450 horses stabled at Gulfstream Park West are, for the most part, remaining there, Badgett said.

“The tents are hurricane safe up to 175 mile-per-hour winds,” Badgett said. “At Gulfstream West, it looks like that’s actually going to be a pretty good place to be because and they won’t get the big hit from the ocean side. As for our newer barns, anything built down here after 1992 or 1993 has to be up to standards when it comes to hurricanes, and that’s the case with all of those barns. The dormitories are also hurricane proof. For a lot of the workers, these guys are actually safer here than going up the road north where there’s really nowhere to go.”

The horse vans have had to make their way through the snarling conditions on the Florida highways as people are fleeing the area. It is about 42 miles from Gulfstream to Palm Meadows. A one-way trip, Badgett said, took the vans about 6 ½ hours to complete on Thursday.

Trainer Stanley Gold told the TDN that he had sent his entire stable to Arindel Farm in Ocala. Arindel is one of his major clients. Trainer David Fawkes said he left 30 horses at Gulfstream and sent 10 to Ocala, and in many cases left the decision up to his owners.

“Some are leaving and others are going to stay,” Fawkes said. “A lot of people who I train for said the storm is going to hit the Ocala area, too, so they don’t see how much there is to gain by leaving. You could put a lot of time and effort into leaving and wind up in the same situation. We’ve been though this before, with Hurricane Wilma, and nothing happened to the horses. It was a huge storm but all the horses were fine. For the horses that stay here, we’ll do everything we can for them and hope for the best.”

Irma is a Category 5 storm that was causing devastation in the Carribean at press time. It is expected to hit the Florida coast with full force on Sunday. The area encompassing the Gulfstream facility is under a state-ordered mandatory evacuation order, but Badgett said that there are no expectations that anyone who stays behind will face criminal charges.

“A lot of people aren’t leaving,” he said. “I drive through the neighborhoods and the hurricane shutters are up, the sand bags are up. A lot of people are going to ride the storm out.”

That includes many backstretch workers who will have to be on hand at Gulfstream to care for the horses that are remaining there.

“Obviously, our greatest concern is for the workers, the people, the horses,” he said. “They come first. Everybody is in pretty good shape as far as that goes. The backside kitchen will stay open as much as they possibly can, so the guys living in the dorms taking care of the horses have food.”

Badgett added that he was optimistic that Irma would not cause any major damage to the facility or to the track surfaces.

Gulfstream has canceled live racing through Sunday and said they were hoping to re-open on Wed., Sept. 13.

 

http://www.thoroughbreddailynews.com/750-horses-evacuated-from-gulfstream-others-stay-put/#.WbLqvtedP5k.email

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Big World to Sell at Fasig-Tipton November

Maggi Moss will offer this year’s GI La Troienne S. winner Big World (Custom for Carlos–Tensas Wedding Joy, by Broken Vow) at the upcoming Fasig-Tipton November Sale through the Bluewater Sales consignment. The 4-year-old Louisiana bred filly, a five-time stakes winner, captured the 2015 GIII Tempted S. as a 2-year-old. She capped a four-race win streak with a 1 1/4-length victory in the May 5 La Troienne. On the board in all but one of 13 starts to date, Big World has won seven times for earnings of $629,190.

“Big World has taken me on a great journey and her victory in the La Troienne was a highlight of my career as an owner,” Moss said.

Big World’s juvenile full-sibling Gracida, a $400,000 Fasig-Tipton Gulfstream purchase by Amr Zedan, was a front-running winner of his debut at Del Mar Saturday.

 

http://www.thoroughbreddailynews.com/big-world-to-sell-at-fasig-november/

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Farm Labor Reform: A Never-Ending Chore

By T. D. Thornton

http://www.thoroughbreddailynews.com/farm-labor-reform-a-never-ending-chore/#.WVZPDfNkCE4.email

This is the first in a two-part installment about labor problems facing Thoroughbred farm owners.

When America’s food growers want to hammer home the point that United States agriculture is facing an ever-worsening labor crisis because there aren’t enough workers to tend our nation’s fields, they illustrate the plight by providing photographs of row upon row of unpicked crops dying in the dirt.

Dairy farmers, dealing with the same trouble, have begun repeating the dire threat that if America doesn’t figure out a way to import more workers, the country will soon have to resort to the unthinkable practice of importing milk instead.

And in the stabling areas of Thoroughbred racetracks all across the nation, it’s become an all-too-familiar tale how trainers can’t find and retain capable, reliable hands-on horse workers, let alone entry-level laborers willing to shovel manure and scrub water buckets.

There is anecdotal evidence that willing foreign workers are avoiding Thoroughbred-related employment because of the palpable vibe that U.S. Immigration and Customs Enforcement (ICE) officials could swoop in for a raid at any moment–an uneasy feeling validated by the fact that ICE is reportedly arresting 400 undocumented foreigners daily nationwide.

Such a crackdown (16 arrests) just happened in Saratoga Springs, New York, in early June, a little more than a month before the country’s highest-profile Thoroughbred race meet is scheduled to begin in that city. According to the Washington Post, the nationwide haul of 41,318 immigrants taken into custody over the first 100 days of President Donald Trump’s administration represents a 37.6% increase over the same period last year.

But while racetrack-related labor woes have been spotlighted in recent months (read TDN’s most recent take on the subject here), there are parallel problems with different consequences playing out on the nation’s Thoroughbred farms.

Over the past several weeks, as the breeding and foaling seasons morphed into the yearling prep season, TDN surveyed a selection of owners and managers of different-sized farms around the country and spoke with elected and appointed officials to find out what long- and short-term help they can offer constituents. This article will attempt to give a snapshot of the varying degrees of problems articulated by owners; Part 2 in Friday’s edition will examine potential solutions.

“Look, this is the worst-kept secret, both on the farm on the backstretch,” said Chauncey Morris, executive director of The Kentucky Thoroughbred Association/Kentucky Thoroughbred Owners and Breeders organization. “The labor issue is challenging. We needed immigration reform in this country probably five years ago, but we don’t have that. So is there a labor shortage currently? Yes, there is, because the economy has increased in a lot of places, including here in central Kentucky where the unemployment rate is very, very low.”

Morris–like everybody interviewed for this story–was adamant that the day-to-day, basic needs of Thoroughbreds are not what gets compromised when there is a shortage of farm labor. “As far as reducing the level of care on horses where it becomes a welfare problem, that’s not an issue,” he said.

What generally happens is that maintenance and upkeep suffers, and non-horse components that are vital to running a successful farming operation slide to the bottom of the to-do list, fueling a mentality of workplace triage.

Fred and Nancy Mitchell’s Clarkland Farm in Lexington compensates for the labor shortage in the heart of the Bluegrass by taking an all-hands-on-deck family approach. The Mitchells have a more vested interest than most owners in the future of their broodmare farm, because the property has been in their family since the 1700s.

A staff of seven cares for the 70 to 75 horses that reside on the Clarkland property. Fred Mitchell said that number includes the Mitchells themselves, (“but we’re getting up there in years”), a “workaholic daughter,” a triathlete son-in-law who handles all the mowing when he’s not in training for or competing in Ironman races, and three Mexican guest workers (two who live on the property, with the other housed nearby).

“It’s not easy to find good workers anymore,” Mitchell said. “The best hands that we can get now are the Mexicans. And if you can get a good one, you’ve really got a good one. But anyone local? You might as well just forget about it. They don’t want to work. They don’t have to work. The government is taking too good care of them.”

The foreign guest workers have either been employed at Clarkland a long time, Mitchell said, or different workers rotate to Lexington from the same small Mexican community as the seasons change. If one of them has to remain at home for whatever reason, Mitchell added, they are quick to send another family member or friend. Mitchell said he does not handle the Clarkland bookkeeping, but he believes they are all paid above $10 hourly.

McMahon of Saratoga Thoroughbreds, located five minutes away from the Saratoga Race Course backstretch, is another husband-and-wife founded breeding farm. Joe McMahon knows the employment totem pole from the bottom up: He began working as a groom, hotwalker, and exercise rider at age 16; met his eventual wife, Anne, on the backside several years later when she was a Skidmore College student, and the two started with 100 acres (the property has since quadrupled) and a couple of broodmares in 1971.

When TDN cold-called to ask about the employment snapshot in his region last week, Joe McMahon immediately cited figures that showed the farm was down to only 15 employees at a time of year when they usually carry 20 to care for their 260 broodmares, foals, and yearlings. Yet the farm’s payroll has spiked upward in 2017 compared to the last two years.

“We’re paying more, and that’s a conscious thing we’re doing to keep our better people,” McMahon said. “Pretty much anybody you talk to, that’s the first thing they say is they’ve got labor problems. It’s hard to get good people who are responsible and they show up. We have to pay up, is what I think. And it’s hard to do when you get a shrinking participation level from [horse] owners.

“But to pay up, you’ve got to raise people’s board,” McMahon continued. “Who wants to raise board when [the industry] is in kind of a contraction mode? So we’re trying to do other things. We want to keep everybody that’s already in the business in business. We don’t want to drive anybody away. We want to do other things better. In fact, we want to run the whole place better, more efficiently. That’s our answer to it, because we feel we have to pay up. So we’re willing to do that if we can get the money out of the business [in other ways]. It’s just working smarter, I guess. But it sure isn’t easy.”

McMahon cited the overall Thoroughbred marketplace as a factor in his business decisions.

“Yearling sales have been pretty tough the last couple of years, even though they’ve been fairly good here in New York,” McMahon said. “That’s probably part of the problem. There aren’t as many people buying inexpensive horses as there used to be. You look at the 2-year-old sales, the stratification is incredible. I mean there’s nothing in the middle or the bottom, although this year was maybe slightly better across the board. So that affects it.”

McMahon said that for entry-level workers, he pays on par with what convenience and fast-food stores pay around Saratoga, which is about $15 hourly.

“We have one girl at $10 an hour, but she gets housing with it,” McMahon said. “So she gets a home, and she gets a contribution towards her [health insurance], 50%. It’s hard to get good people, plain and simple. We’re fortunate that we’ve had some people who have been with us for a long time, and they’re kind of filling the gaps. But for just labor people? It’s real tough.”

Asked if the shortage is constraining his operation’s growth, McMahon said, “We don’t want to grow any more. We’re as big as we want to be. But I guess this spring we’re just noticing that we’re farther behind on those maintenance kinds of jobs–painting, weed whacking, and mowing and fixing fences. We seem to have a harder time getting those sorts of things done. And that’s because everybody who works here has horse skills, and we can’t take them away from the horse part of it to do stuff that we used to have abundant people to do.”

In Ocala, Florida, Roger Brand, the vice president and general manager of the Double Diamond Farm stallion facility and training farm, said that while his operation is not in as desperate an employment position as farms in other geographic areas, he sees a different delineation between the availability of skilled horse help versus general laborers than McMahon does in New York.

“Getting people that have horse experience, I think there’s a shortage of that,” Brand said. “I don’t know that it’s a shortage of people that come in to apply for jobs, but [there is a shortage of] people who are qualified to work with horses. I think most of those people who are familiar with the business are gravitating towards the track, not farms. It used to be easier to get people with horse experience. But from the labor side of mowing and things like that, I don’t think there’s a shortage.”

Brand’s opinion is reflected by his employees-to-horses ratio, which is lower than other interviewees for this story: He said he has between 42 and 46 workers on the payroll for a farm that usually houses 100 horses, depending on the season.

“I think the horse business itself–you know, you’re either in or you’re out of the world of horses,” Brand said. “I think the amount of people in the horse business is not what it used to be. If you grew up in it and your family was in it, you probably are still involved. But I don’t think other people are gravitating to it.”

Brand said that he pays hands-on horse workers $12-15 hourly and riders get $12-15 per mount. Yet he believes in paying unskilled laborers roughly the same amount, “because, believe it or not, you get what you pay for.”

That wage breakdown contrasts with what Pete and Evelyn Parrella of Legacy Ranch in Clements, California, pay their workers. But it’s important to consider that north-central California horse farms are located in an ultra-competitive agricultural jobs market.

“Right now it’s difficult,” Pete Parrella said. “Up here, at this time of year you’ve got cherry-picking and grapes, and those operations pay piece work. It’s sometimes difficult for us to keep employees because they can make more money on piece work than they can hourly, so that’s been a challenge for us.”

Legacy Ranch offers breaking, training, lay-ups, sales prep, breeding, and foaling. Parrella said a staff of 35 tends to the

400 horses, and that he pays $11-15 hourly to lure general laborers, but will go above $20 hourly to retain skilled horse workers.

“To keep people we’re having to pay well over the minimum wage for physical labor for stall cleaners and manure pickup and stuff like that. It’s a problem for horse farms. I don’t know how you can hold [boarding] rates. Rates are going to have to go up, and some of the clients are going to have to pay new rates for us to keep employees,” Parrella said.

“Finding qualified people in the horse industry is a challenge. But there are people out there, and if you’re fortunate enough to find them, then you have to pay the price. If you’re looking for quality over quantity, your clientele has to appreciate that, and clients have to make a choice where they want to go,” Parrella said. “We’re really not looking for bodies. We’re looking for people in the industry that have a concept of what a good horseman is. That’s what we look for.”

The farm operators interviewed from Kentucky, Florida, California, and New York represent the top four Thoroughbred producers by state. But drift farther down that list, and it seems evident that the more removed you are from the top of the breeding hierarchy, the more difficult it gets to find qualified horse farm workers.

Barbara and Ron Rickline founded Xanthus Farm in Gettysburg, Pennsylvania, in 1983. The full-service breeding farm, which bills itself on its website as “one of Pennsylvania’s leading commercial stallion establishments,” usually houses 150 horses, and about half of them are new foals each year.

Yet Barabara Rickline said she only is able to retain four or five full-time employees and a handful of rotating part-timers. Her best staffers are older locals in their 50s who are life-long horse handlers, and one intensely equine-enthused 15-year-old girl who is a tireless worker. The average starting wage, she said, is $8-9 hourly.

“We start them out kind of cheap because most of them don’t stay anyway,” Rickline said. “I’ve already tried paying people more money, and it just doesn’t help. I know that sounds kind of cheap, but that’s the reality of it.

“This area is big for apple farming. We used to always have available help that would do both kinds of work, in the orchards and then they’d pick up work on the horse farms. But now that the immigration thing got kind of tough, everybody has disappeared. I used to always rely on a couple of Mexicans who did good work and liked to be with horses. But they all went back to Mexico. They’re too afraid they’re going to get picked up.”

Rickline continued: “I hate to say it, but [American] kids don’t want to do this stuff. They don’t do physical labor. You can’t even get people with horse experience. You have to teach them everything. The basic horse stuff gets done on my farm. But the extra seasonal upkeep things don’t get done as much as you’d like. It’s making me want to cut my business back. I’m even trying to reduce my number of horses because you can’t find good help.

“And when I say ‘good help,’ I mean people that just show up,” Rickline emphasized. “It doesn’t mean that their work is good. And that’s bad, when their best quality is they just show up.”

@thorntontd

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