After 18 years on the board of the Toronto-based horse racing giant, Horner said he’s proudest of a commitment to share the proceeds of all development equally between the breeds.
by Dave Briggs
After 18 years on the board of the Woodbine Entertainment Group (WEG), chairman and standardbred owner Clay Horner said it is simply the right time to step down from the board and let others help lead the Toronto-based horse racing company into the future.
Horner’s resignation will be officially announced today (Sept. 18). It is expected the name of the next chairman will also be revealed by WEG today. Horner said he did not want to steal the thunder of that part of the announcement. He could only speak to his experience.
“As a general matter, you look at eight to 12 years as the time frame of when a director can make the greatest contributions and then it’s always great for organizations to be able to plan for renewal and new perspectives on things and to have a ready network of people that can be prudent to address the needs and changing needs of the company,” Horner said.
Horner, one of the world’s top mergers and acquisitions lawyers — profiled in HRU last month by Murray Brown (full story here) — said he never intended to remain on the board as long as he did, but a couple of seismic industry events convinced him to stay.
The 10-year anniversary of his time on the WEG board came around the same time the province of Ontario cancelled the Slots at Racetracks Program (SARP), throwing the industry into chaos.
Horner said he also felt it wasn’t good for the company’s stability to resign as chairman when WEG’s CEO changed from David Willmot to Nick Eaves and then from Eaves to current CEO Jim Lawson.
In more recent years, Horner said the timing wasn’t right to leave when harness racing moved full-time to Woodbine Mohawk Park; the industry was lobbying for a long-term funding agreement with the province — which has been reached for over 20 years at approximately $100 million a year — and Woodbine Racetrack began an ambitious casino project, “which obviously is the biggest undertaking the company has ever taken.
“It was important for me to be there for continuity and with the benefit of my experience in the business world while we got that well under way.”
Now the time is finally right, he said.
“We have all of those things well underway. I’m not suggesting by any means that it’s due to me, but I think the company is in better shape than it’s ever been, with better prospects than it’s ever had,” Horner said.
“In August, I thought about it. The annual meeting this year is the most logical time, rather than retiring in the middle of the year or something. That’s a natural, clean break. That’s kind of the genesis of the history and why those time frames have been so important to me and why adhering to those principles of good governance has been so important to me. I say all of that against the backdrop of WEG having done a really, really good job of recruiting excellent directors with expertise in the areas that are particularly relevant to the issues that we’re addressing right now. People that have a real background and are really at top levels of government, the finance industry, the marketing industry.”
As for WEG losing someone from its board that has a lifetime of harness racing experience, Horner said he hopes his spot will be filled by someone with an industry background.
“Obviously, there needs to be some people with real horse racing expertise and it helps when it’s people with a deep expertise rather than a superficial expertise, because I’m not sure a superficial expertise contributes much… Suffice to say, I’ve made a couple of suggestions for people that might be considered,” he said. “I don’t have any reason to think that’s in respective of an announcement to be made [today], but in terms of what might come to play.
“There’s not any doubt in my mind that within a year there will be at least one and probably two new directors that will have… not only a real excellence outside the racing industry, but real excellence and understanding of the racing industry that will join the board.”
SHARING THE PROCEEDS OF DEVELOPMENT
After nearly two decades on the board, Horner said he is most proud of the fact it has agreed to share the proceeds of its ambitious development project on Woodbine Racetrack’s property equally with both racing breeds, despite the fact standardbreds no longer race at Woodbine.
“The single thing from a standardbred point of view that I’m most proud of, is that the board, when we decided to have Mohawk become the sole track for harness racing and Woodbine become the thoroughbred track and embark upon the very ambitious development program at Woodbine… the board was completely in support of the commitment. The benefits from development at both tracks — and, obviously, for a good length of time it will be disproportionate at Woodbine — will be equally shared by the two breeds,” Horner said.
He said he is also proud that wagering at Mohawk Park is currently averaging over $2 million a night.
“Jim [Lawson] has been talking for a couple of years about the objective of getting to a $3 million dollar average handle in the standardbred industry at Mohawk. Frankly, when he started talking about it, I thought it was really quite ambitious, but if you actually look at where we are right now, well over $2 million in average and that’s still growing… I think $3 million is a reasonable target within a couple of years.”
If Mohawk can average $3 million a night, Horner said it might be enough to justify the expense of expanding the track from a seven-eighths to a mile.
“A handle that’s growing at the rate it is, I think, makes it much easier to step up to what is a very expensive proposition, which is converting Mohawk to a mile track,” Horner said, stressing that such a move is not being considered, yet. “It’s not in the works at all, but like most things, things become realizable and do-able when financially it becomes sensible to do it. To be really blunt, it is not financially reasonable to do it at an average wager of $2 million… but we’ve had a couple of weeks now where we’ve had an average of over $2.5 million per night with really strong Friday and Saturday nights and then $2 million just on the regular weeknights now. It’s not beyond imagination if you look at the industry that a $2.5 million average is really something that might be achievable within a year… then you get to $2.7 and you start thinking that converting the track is what might get us to $3 million… and then it becomes not a dream, not a vanity project, but something that is a smart business investment.”
Horner said he’s also happy to see other Ontario tracks — particularly The Raceway at The Western Fair District — grow their handle.
“The folks at Western Fair have done a phenomenal job in that regard,” he said. “They work really hard at scheduling their events, scheduling their races, picking their slots, picking the right post times… they do a great job. Part of my ritual was to look first thing in the morning at what the Mohawk wagering was last night. The second thing, when Western is racing, is ‘What was Western Fair last night?’ The real satisfaction comes when I’ve seen that we’ve both done well.”
Beyond the growth in wagering and a commitment to share the proceeds of development equally across the breeds, Horner said he was also proud of a strengthened relationship with The Meadowlands and its owner Jeff Gural.
“That’s one of the things I’m proudest of. We’re competitors, but we also have a shared view of about the importance of the industry and about doing the right things for the industry and accommodating each other as far as those things are concerned,” Horner said, adding that the stewardship of both racetracks is committed to improved integrity.
Integrity is the one major area that concerns Horner as he leaves the board.
“It has nothing to do with the WEG board, but I really don’t think in Ontario, yet, that we’ve really got a handle on the integrity issue the way we need to and want to.”
Other than the integrity issue, Horner said his departure comes at, “just the right time and I feel very comfortable about it. I have the greatest of pride in where WEG is at.”