There have been many articles written recently directed at the proposed Sunshine Millions racing event scheduled for Jan. 25, 2003, between Florida-breds and California-breds. The Florida Horse has asked Richard Hancock, executive vice president of the Florida Thoroughbred Breeders' and Owners' Association to respond to some of the most frequently asked questions.

Q. How did the Sunshine Millions originate?

A. It began with a challenge from Mr. Frank Stronach to the FTBOA Board of Directors over 1 1/2 years ago. (Stronach is the owner of Gulfstream Park and Adena Springs and is a member of the FTBOA Board of Directors.)

Mr. Stronach's statement was that he wanted to hold two events—one in Florida (Gulfstream Park) in January and the other in California (Santa Anita) in February. Each event would consist of eight races. Each race would carry a purse of $1 million and each would have an equal number of Florida-bred and Cal-bred entries.

The event in Florida would seek $4 million from the FTBOA through use of our FTBOA Stakes Program, Breeders' Awards and stallion and foal nominations. The additional $4 million would come from Gulfstream Park through their purse account, track commissions and/or sponsorships.

Q. A $5 million day of racing is a far cry from two $8 million days, or a total of $16 million. Why the reduction?

A. Keeping in mind the possible revenue sources for the FTBOA (Stakes Funds, Breeders' Awards and Stallion and Foal Nominations), we found the following:

Although Florida is the second leading state in stallion nominations to the Breeders' Cup, only 66 percent of our stallions are nominated.

In addition, only 48 percent of Florida's foal crop is Breeders' Cup nominated. The Florida Stallion Stakes Series is also dependent upon stallion and foal nominations for virtually 100 percent of the purses.

Both the Breeders' Cup and Florida Stallion Stakes play an important role in the Florida-bred Stakes Program. It was obvious that, between the two programs, our stallion owners and breeders are under a great deal of financial strain to continue to fund these types of races.

We also felt that stallion and foal nominations to The Sunshine Millions would be asking too much of our stallion owners and breeders and would have a negative impact on both the Breeders' Cup and the Florida Stallion Stakes. Furthermore, if we were to use funds from our Breeders' Incentive Program, all Florida stallions and Florida-bred foals registered with the FTBOA need to be included. We need to move away from running for our own money (purses made up solely from stallion and foal nominations and owners' entry fees).

Understand that the FTBOA does not control the Breeders' Cup or the Florida Stallion Stakes. While we encourage everyone to participate, we have very little or no input in these programs. Florida racetracks, along with the FHBPA or other horsemen's associations, had never suggested using one penny out of the track's purse account for Florida-bred stakes. It wasn't until 1999 that the FTBOA was successful in getting the State legislature to fund a Florida-bred Stakes Program. When Mr. Stronach agreed to match our contribution, we wanted 100 percent of the Florida-bred stallions and foals registered with the FTBOA to be included.

Several questions have been raised by several trade publications, including the Daily Racing Form and the Thoroughbred Times.

Q. Why are you raising the takeout?

A. Most of the criticisms are not based on fact. Most are merely opinions that can't stand up after you understand the facts. None of these publications contacted our office for facts or answers prior to publication.

Florida's takeout is solely within the discretion of the permitholder. They have the ability to raise or lower the takeout to whatever they feel best maximizes the return for purses and track profits.

Gulfstream Park has the lowest takeout at 19.99 percent in Florida and I have not seen any indication that they plan on increasing the takeout in Florida.

There is pending legislation in California that would give the track some flexibility. Again, I have heard no indication that they are going to raise or lower their takeout. Again, this is Magna Entertainment Corporation's decision in California. Certainly, those who operate Thoroughbred race meets need to look out for the racing fans—our customer. We focus our attention on breeders and owners. How lowering or increasing the takeout at a particular track effects the bottom line in breeders' incentives and purses will be our focus.

Thoroughbred breeders and owners in Florida have close to $4 billion invested in breeding farms, training centers, equipment, improvements and breeding and racing stock. Racing fans play a very important role in our industry, but so is the return on our $4 billion investment. Let's do a little industry reporting to see what our critics have invested. If they are all good handicappers, they go home with piles of money each day. If they are not, it doesn't mater how low the takeout is. Seriously, the takeout has to be set at a level that maximizes purses and track commissions. It should not drive our customers away.

Q. Will these races consist of poor quality runners with no betting interest as set forth in a published article?

A. Absolutely not. The individual making this statement simply didn't do his homework.

Based on a review of Florida-breds that raced in the year 2001, we could provide at least 12 Florida-breds in each of the eight races. Each horse would be a stakes winner of over $100,000 in the year 2001, if the race was to be run in January of 2002. There is no reason to think that the year 2002 won't produce the same number of quality Florida-breds interested in running in The Sunshine Millions races.

Q. How is the FTBOA funding their 50 percent of this event?

A. As most of our members know, Breeders' Awards are funded by a percentage (less than one percent) of the Florida pari-mutuel handle along with a percentage of the dollars received from the sale of the Florida signal of live Thoroughbred races to locations outside the state.

Breeders' incentives are divided into three types of awards -- Breeders' Awards, Stallion Owners' Awards and Stakes Awards.

During the 1999 legislative session, we were successful in establishing the Florida-bred Stakes Program. We increased our Breeders' Awards Program from .75 percent of the pari-mutuel handle to .955 percent. This increase is being used to fund the stakes program. The increase, which accounts for approximately 17 percent of our total program, was required to be paid back through the track that generates the funds by agreement between the FTBOA, the permitholder and the majority horsemen's group.

The Florida Statutes provide that any amount over the 17 percent and not to exceed 40 percent is within the discretion of the FTBOA Board. This increase in our awards program was a result of a $5 million tax reduction for Gulfstream Park and Calder Race Course. It was divided one-third for the stakes program, one-third for the tracks and one-third for purses.

With the increase in Gulfstream Park's racing days, we estimate the 17 percent required for Florida-bred stakes to be around $750,000. We felt that an additional $500,000 would not affect our Breeders' Awards and Stallion Owners' Awards Programs.

Why $5 million? We backed into that figure based upon our review of the source of revenue. For 50 percent of the purse, we felt that $1,250,00 was the level at which we felt comfortable in our participation.

We had several discussions with Doug Burge of the California Thoroughbred Breeders' Association and were both comfortable at these numbers.

We agreed that one day of racing, rather than two, at $5 million would be achievable, and, in order to put on a competitive event, it was necessary for 100 percent of our foal crop to be included. This would not be possible if we required stallion and foal nominations.

Remember, neither Silver Charm nor Skip Trial were nominated to the Breeders' Cup and we just didn't want to exclude that type of horse from participating.

A meeting was held in Tucson during the Arizona Racing Symposium last December between Gulfstream Park, represented by Scott Savin; the FHBPA, represented by Linda Mills (Break Away Farm in Ocala) and Kent Stirling; Santa Anita, represented by Jack Liebau and the CTBA, represented by Burge, who was in contact with the TOC and myself on behalf of the FTBOA.

It was unanimously agreed that, for the time being, one day of racing would be a starting place (as opposed to two), and that $5 million in purses could be achieved. Magna Entertainment can always add additional funds.

It was agreed that, rather than rotate every other year between Gulfstream Park and Santa Anita, one race day with four live and four simulcast races would be desirable. This would create an event at both tracks.

We each agreed to go back to our respective boards and urge them to consider the proposal. So far, only the CTBA, TOC, FHBPA and the FTBOA's boards have approved the event. In our contract with Gulfstream Park, we set forth these conditions and are still waiting for a responde from Gulfstream Park and Santa Anita, both Magna-owned tracks.

When the FTBOA Board of Directors accepted the offer made by Magna (Stronach), they felt this event would be beneficial to Florida breeders. Creating the Sunshine Millions will increase the value of Florida-breds.

The use of additional $500,000 to create a $5 million day of racing in which 50 percent of the entries would be Florida-breds registered with the FTBOA was something that would greatly benefit our breeders and owners. Remember, the CTBA and Santa Anita would also be offering $2.5 million.

Q. Will funding of the Sunshine Millions reduce our Breeders' Awards.

A. No. The $500,000 additional contribution by itselt will not effect our Breeders' Awards Program or our 15 percent payment of the gross purse.

For example, if a Florida-bred registered with the FTBOA wins a race in Florida with a gross purse of $20,000, he as the breeder will receive 15 percent of that amount($3,000). Presently, we have a cap of $15,000 for any singular award.

Now let's say the average gross purse is $30,000 as opposed to $20,000, he will receive $4,500. If it is $1 million, the breeder will still only receive $15,000. However, as Florida-breds continue to win a higher percentage of races in Florida and as we add the opportunity for Florida-breds to run in Florida-bred stakes races, we can increase the total dollars expended.

There are several things we can do. Hopefully, as purses increase, so does funding for our breeders' program. If purse increases are caused by an increase in handle and the same percentage of Florida-breds win races there will be no change in the 15 percent Breeders' Awards being paid. However, if our funding remains constant and Florida-breds win more races, we will have to address the 15 percent situation. Since in that situation we won't be able to increase our $6 million fund we would have to lower the 15 percent the FTBOA would still disburse the $6 million just to more Florida-breds.

If you will remember a few years ago, we didn't pay Breeders' Awards on Florida Stallion Stakes races or Breeders' Cup races. This was a way of seeing that our payment didn't exceed the fund balance. When our fund balance grew, we no longer omitted these races for the Breeders' Awards Program. We didn't change the 15 percent, but we were paying out more money to Florida breeders. However, as our Florida-bred Stakes Program grows and we are winning more races we will be providing more opportunities for Florida-breds.

What breeders should be watching is the total funds available, not the 15 percent. We have grown from $3 million a decade ago to over $7 million in 2001. The $4 million increase is the important factor, not the 15 percent.

It is important that the FTBOA Breeders' Incentive Fund continue to share in new forms of revenue (like VLT's), such as we have in ITW, tax breaks, interstate-wagering and intrastate sumulcasting in order to continue funding Breeders' Awards and Florida-bred stakes at our current level.

Q. Isn't the Sunshine Millions only going to benefit the wealthy breeders?

A. No. It will only affect breeders who breed fast horses that win races. If a breeder registers his Florida-bred foal with the FTBOA, that foal is eligible for the Sunshine Millions races.

Q.Lastly, how did you get the name, The Sunshine Millions?

A. During one of our many, many meetings over the past year and a-half, Harold Plumley, our President, used the name it stuck. Everyone seemed to like it and we hope it will become a reality. It will be a fun event if Gulfstream Park (Magna) lives up to their end of the challenge and does a good job marketing the event. It will increase the value of Florida-breds and will focus the entire industry on Florida and California, at least for one day.