Bad-Luck Jockeys

A $20 billion business is being roiled by riders with shaky health insurance

For years, jockey Gary Birzer spent more time trying to snare mounts and win races than worrying about his future. But when he got engaged in 1998, he realized he had better look out for his family, since jockeys have a 60% chance of being injured in any given year. So he joined the Jockeys' Guild, an organization founded in 1940 primarily to take care of the health of jockeys. It provided insurance coverage -- up to $1 million for medical costs in the event of an on-track accident. If the worst happened, Birzer figured, he and his wife, Amy, wouldn't have to worry about medical bills.

He was wrong. On July 20, 2004, Birzer's horse fell at West Virginia's Mountaineer Race Track. The jockey's back was broken, paralyzing him from the waist down. Then Birzer learned the rest of the bad news: The guild had quietly canceled its $1 million catastrophic policy more than two years earlier. "The fact is that they let it lapse, and the fact is that they failed to notify any of the riders," says jockey Eddie King Jr.

By the time he got the news, Birzer was in a spinal cord injury hospital, and the bills were mounting -- far beyond the $100,000 covered by Mountaineer's own policy. Guild officials assured Amy that they would still cover the expenses, but no bills were paid. In November the hospital finally told the Birzers that Gary would have to transfer to another hospital if they didn't pay. When the guild said it couldn't help, Amy broke down in tears, according to the Birzers' lawyer, Paul S. Koczkur.

Now the couple's debt is close to $800,000. They can afford only minimal rehabilitation services. And Gary's story -- along with a slew of questions about the guild and its current management team -- is shaking up the often insular world of horse racing. "What happened to Gary is unconscionable," says Richard B. Shapiro, commissioner of the California Horse Racing Board (CHRB), an agency that withheld contributions to the guild in the wake of Birzer's accident.

The fallout has been far-reaching. "It has changed the landscape of the industry," says Steve Sexton, president of Churchill Downs Inc (CHDN ). Last November, 15 jockeys refused to race at Churchill Downs in Louisville, Ky., without additional on-track health coverage, leading to rifts among jockeys and between tracks and riders. Lawsuits are flying amid allegations of guild mismanagement. And on Oct. 18 the House Energy & Commerce subcommittee on oversight and investigations plans to hold hearings with the Birzers, other jockeys, and guild leaders. "We want to determine why an industry with so much money got in a position where jockeys, exercise riders, and back-stretch workers who suffer injuries do not have adequate coverage," explains subcommittee Chairman Ed Whitfield (R-Ky.). He says he decided to investigate after reading articles in SportsBusiness Journal and in horse trade publications.

Birzer declined to talk before the hearing. But guild President L. Wayne Gertmenian and General Counsel Lloyd Ownbey Jr. aren't so reticent. In response to charges of mismanagement, of not taking care of its members, and of failing to account for guild money, Ownbey blames track owners, whom he accuses of trying to bust the guild. "Those guys never got out of the Neanderthal early 20th century [in labor relations]," he says. Ownbey also insists that Congress is in cahoots with millionaire owners, and in an Aug. 31 letter he attacked Whitfield's chief investigator as "an unfriendly, rude, humorless bully." Says Ownbey: "I was a little colorful in that letter."

It has never been easy for jockeys, who are classified as independent contractors, to make a unified push for workplace benefits. "We are so competitive against each other. It's hard to shut that off," explains jockey Robert Colton.

The Jockeys' Guild used to function as neutral territory, while providing off- and on-track health insurance to its members. By 2000, though, strains were showing. After some serious accidents, premiums on the health plan jumped 43%. "Insurance companies don't want to cover jockeys, viewing them as accidents waiting to happen, which is true," says John Giovanni, guild manager from 1987 to 2001 and a former jockey. Unable to afford the premium hike, he made arrangements to put members on COBRA. "I figured that would give me 18 months to renegotiate another plan," he says. At the same time, in April, 2001, he bought a $1 million catastrophic health policy for $443,000 to cover members injured on the racetrack.

This didn't win him much support. however. Arguing that Giovanni was falling short in medical coverage, pensions, and other issues, a group of jockeys led by Chris McCarron sparked a revolt. They succeeded in getting Giovanni replaced by Gertmenian, a charismatic professor at Pepperdine University with no horse-racing experience, whom McCarron had met through his daughter.


McCarron later became disenchanted with Gertmenian and left the board. Other jockeys, like Eddie King, who became guild treasurer, were ousted when they began to ask questions about the new management's financial dealings. But the crucial moment came in April, 2002. That's when Gertmenian let the catastrophic $1 million health policy lapse. "No jockeys were notified," says Gary Donahue, who had been running the Disabled Jockeys' Fund for the guild. "They were riding and risking life and limb, and they didn't know they did not have a policy. It was ludicrous."

Ownbey claims that a December, 2001, document, which mentions that the guild can't afford the policy, is evidence that jockeys were informed. Gertmenian, who still has supporters among jockeys, admits there was no formal notification but argues that the policy didn't adequately protect jockeys anyway. Others disagree. "I believe the jockeys are victims of the current management of the guild," says the CHRB's Shapiro.

The hope of Gary Birzer and other jockeys is that the congressional hearings will put a national spotlight on the plight of jockeys, exercise riders, and others in the industry who don't have normal worker protections. "The only salvation the jockeys have is what happens at the hearing," says former guild head Giovanni.

In the meantime, the Jockeys' Guild hasn't totally forgotten Gary Birzer, says Koczkur: "They rented an apartment for him for 12 months and gave him $15,000 for a [disabled access] van." Argues Gertmenian: "I'm sure we've helped Gary with everything we possibly can." But the apartment rent is about to run out, and the Birzers are falling back on donations from the horse-racing community. "Amy and Gary have a lot of good feelings towards other jockeys and the racing community," Koczkur says. "But they are very disheartened by what they feel as abandonment by the guild." Investigations, hearings, and lawsuits aren't going to make that feeling go away.

By John Carey in Washington

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