Jockeys’ Safety Net Is Lost

Until jockey Gary Birzer went down in a crippling spill at a West Virginia racetrack in July, he thought he had very good accident insurance. Eclipse Award-winning rider Jose Santos thought he had good coverage too. So did a lot of jockeys around the country.

But the Birzers -- Gary, 29, and his wife, Amy -- were told by the Jockeys’ Guild that there was no catastrophic insurance, that the old policy hadn’t been renewed.

Gary Birzer, who suffered a severed spinal cord and is paralyzed from the waist down, has already incurred medical expenses estimated at $500,000, with at least a year of rehab ahead of him.

In the aftermath, jockeys nationwide, many of them riding without medical insurance, are asking for a financial review of the guild. Petitions were recently circulated from Belmont Park to Santa Anita, asking for an external audit of the guild’s books.

The guild, which says it represents more than 1,200 riders, has a history of internal bickering. There was a schism three years ago, when Hall of Fame jockey Pat Day resigned as president after Chris McCarron and a few other riders had ousted the popular John Giovanni as national manager. Now, Wayne Gertmenian, a Pepperdine economics professor who succeeded ex-jockey Giovanni, and Gertmenian’s Matrix Capital Associates, a management-consulting firm, are under fire.

“It’s the same now as it used to be under the old administration,” said Ed King, a New Jersey jockey and, until this year, guild treasurer. “There’s a lack of information. When things are done, you wonder just who is making all the decisions. We seem to have people there who aren’t doing anything more than just drawing their paychecks. When you start to ask questions, they look at you like you’re doing something wrong.”

Gertmenian, who calls himself “Dr. G.,” denied the contentions.

“We’ve had an independent audit, and we’re satisfied with the results,” he said. “There’s a very small group of people trying to ruin what good work we’ve done, and they’re the same people who caused trouble in the past. It’s all nonsense. When I took over, there were 600 or so members. Now we have double that -- almost all the riders who ride on a regular basis -- and we added a rider like Corey Nakatani just last week. One-half of 1% of this organization might be unhappy.”

Robert Colton, a retired jockey and former guild secretary and chief financial officer, was expelled from the guild this year and has been sued by the guild and Matrix. The suit charges Colton with unfair business practices and says that he libeled and slandered the guild.

Colton and McCarron have changed their positions on Gertmenian, whom they supported at the time of Giovanni’s departure.

Colton, who exercises horses at Lone Star Park near Dallas, declined to comment, on the advice of his attorney. He has filed a defamation countersuit against the guild and Matrix, charging in court papers that they are guilty of mismanagement and in violation of federal labor laws. Colton also charges the guild with late audits, failure to file mandatory reports with the federal government, double billing and under-reporting travel expenses by hundreds of thousands of dollars.

McCarron has had a falling out with Gertmenian, whom he hand-picked for the guild job. Gertmenian acknowledged the rift but declined to give details.

McCarron, who retired from riding in 2002, recently resigned as general manager of Santa Anita and has taken a larger role with Magna Entertainment Corp., Santa Anita’s parent company, which owns more than a dozen tracks.

According to a source familiar with Gertmenian’s contract, Gertmenian’s salary is $160,000 annually and the guild pays Matrix about $40,000 a month for its services. Birzer’s spill occurred at Mountaineer Race Track in Chester, W.Va. King said that he learned after the spill that the group coverage had been dropped, because the guild couldn’t afford it, in April 2002. Gertmenian, disputing King’s version, said that the policy ran out early in 2001, under Giovanni’s watch.

“I’ve explained [to the jockeys] that they didn’t have the coverage,” Gertmenian said. “I’ve traveled the country saying it, and I’ve been in every jocks’ room in the country except about four. I’ve said it over and over.”

Birzer was covered by a policy that many tracks carry through the Thoroughbred Racing Assns., but that coverage has a ceiling of $100,000. Several jockeys, including Jerry Bailey, Mike Smith, John Velazquez and Jose Santos, have pledged a share of their earnings to the Birzer family when they ride on Breeders’ Cup day -- eight races worth $14 million on Oct. 30 -- at Lone Star Park.

In what would be a precedent-setting move, Lone Star, in conjunction with the Breeders’ Cup and the National Thoroughbred Racing Assn., is expected to buy extra insurance for jockeys when they ride there next week. According to Jockeys’ Guild sources, Lone Star officials are concerned about securing top out-of-town jockeys to ride Thursday in an international jockey championship, a prelude to Breeders’ Cup weekend.

Earlier this month, Kentucky-based Shane Sellers, 38, who has won more than 4,000 races during a 21-year career, quit riding. Sellers, who had retired twice because of a recurring knee injury, said his reason this time was the difficulty in finding disability insurance.

“I don’t want to be the next Gary Birzer,” Sellers told the Daily Racing Form.

Later, in a letter published by the Racing Form, Sellers said:

“In a multibillion-dollar industry, we, the riders, on average are getting less than $20 a [losing] mount after agents, valets, the IRS and health insurance [are paid], and if I fall, I’m responsible for any health-care costs over $100,000.”

Sellers said that after the top 75 riders in purse money, the rest of the country’s jockeys earn an average of about $26,000 a year.

King, although dissatisfied with guild management, sees a broader picture.

“Jockeys’ insurance is an industry problem,” he said. “The rest of the industry should be paying something to help us with our insurance.”

D.G. Van Clief, president of the Breeders’ Cup, echoed King’s words this week at Lone Star.

“This is not just the jockeys, it’s an industry-wide concern,” he said. “It’s something we all need to get together on and address.”

King said that when he was treasurer of the guild, he acceded to Gertmenian’s request to move $1 million out of the Disabled Jockeys’ Fund to another account. That fund, which makes small monthly payments to about 50 permanently disabled jockeys, and dozens of other riders who are temporarily disabled, has fluctuated wildly, according to federal records. At the end of 1997, there was a balance of $547,000 in the fund. The amount grew to $1.3 million a few years later, then in 2002 the total was $440,000.

In California, New York, New Jersey, Maryland and Idaho, riders are covered by workers’ compensation when they are injured. Workers’ comp, said John Harris, chairman of the California Horse Racing Board, affords jockeys no-fault protection.

“It’s full coverage,” Harris said. “No limits, no deductibles and no co-payments for doctors and hospitals.”

But workers’ comp comes at a steep cost -- appreciably higher here than in many states -- that is thrust upon the owners of California horses and their trainers. Because of this, some trainers have moved elsewhere. Wayne Lukas, a Hall of Fame conditioner who had been racing thoroughbreds in California since the late 1970s, moved his operation to Kentucky a few years ago.

Using money from uncashed winning tickets at tracks, California’s racing industry contributes to health-and-welfare insurance coverage for jockeys and their families. In January, the California Horse Racing Board approved a payment of $950,000 from this fund, but was unable to disburse the money because the guild’s required financial statements were lacking in detail. The money was recently made available after the guild submitted more complete statements.

In Colton’s suit, he contends he found the guild “chronically late with their audits, leaving [some] accounts underfunded.”

Colton also alleges that Matrix Associates reported traveling expenses of $95,000 for 2002, when the amount charged to the guild was $246,000.

In the guild-Matrix suit against Colton, he is accused of aspiring to become executive director of the guild. The suit accuses Colton of “sabotage” to the guild’s accounting system, which resulted in the issuance of checks not backed up by funds.

Jose Santos, who rode Funny Cide to his Kentucky Derby victory last year and won the Breeders’ Cup Classic with Volponi in 2002, is one of the 75 top riders Sellers referred to. Santos is based in New York, a workers’ comp state, but he also rides in Florida part of the year and has ridden recently in Kentucky and Illinois, states where jockeys don’t have workers’ comp.

“I called Dr. G. a few weeks ago, and I don’t think he was happy to hear from me,” said Rita Santos, Jose’s wife and the sister of another New York jockey, Heberto Castillo Jr. “Since we found out, I’ve been shopping around to see what coverage we can get.”

Rita Santos said that her husband probably would buy a policy with a high deductible and a premium of approximately $11,000 annually. Jerry Bailey, Santos said, has similar coverage. Bailey, like Day, resigned from the guild when Giovanni was moved out.

According to one insider, about 100 jockeys have signed the petition asking for a new audit of the guild. A published report quoted a Jockeys’ Guild-Matrix officer, Albert Fiss, as saying that Santa Anita’s jockeys tore up the petition and refused to sign.

“When I heard that, I all but jumped out of my chair,” said Paul Atkinson, who rides at Santa Anita. “No way did that happen at Santa Anita. There’s supposed to be a conference call among the guild’s board of directors before all of us consider the petition.”

The guild’s annual meeting is scheduled Dec. 5-7 in Dallas.

“Matrix is on the spot,” jockey King said.