Growth, Innovation Hallmarks of Charles Cella's Leadership at Oaklawn

by Rex Nelson  on Monday, Apr. 7, 2008 12:00 am  

This story is from the archives of ArkansasSports360.com.

(To see Oaklawn by the numbers, click here.) 

Charles J. Cella laughs loudly when a visitor to his spacious office quotes from a story written by Steven Crist for The New York Times in February 1989.

Crist, now the publisher of the Daily Racing Form, wrote at the time: "When Oaklawn Park opens its annual race meeting, Cella moves from his St. Louis home to an elegantly furnished trackside log cabin at the edge of the Oaklawn grandstand, directly across the track from the furlong pole. He often entertains guests during the races, and his table is set with napkins that read: 'No Gimmicks, No Medication, No Rain.' Cella's unusual residence is an appropriate symbol of Oaklawn, where his strong opinions and personality have long set the track's conservative tone. The promises on those napkins, which he had printed several years ago, reflected his determination to preserve a bygone era in racing, when performance-enhancing drugs like Lasix were illegal and the only gimmick bet on the card was a daily double."

Compare Cella's positions when those napkins were printed to what's happening today. Oaklawn's Web site, television ads and billboards now proclaim it not as Oaklawn Park or as the Oaklawn Jockey Club but instead as Oaklawn Racing-Gaming.

Yes, gaming. As in electronic games. As in the planned addition of what will, in essence, be a casino without the table games.

Crist wrote in 1989 that Cella "never expected to see Lasix or the Pick-Six at Oaklawn, but he never expected to see attendance drop 23 percent and the betting handle fall 26 percent over the last five years."

"I feel like we're being dragged into the future against some of the principles that made Oaklawn great," Cella told Crist. "But the most important tradition is maintaining the quality of racing at Oaklawn. ... We've got a bloody nose, but we're getting back up. I fought like a lion over the medication and the gimmicks, and I lost. But I will never lose the commitment to high-quality racing. I would padlock the track before I would offer anything less at Oaklawn."

When that story was composed almost two decades ago, it's a safe bet that neither Crist nor Cella expected there to be 31 casinos in neighboring Mississippi with more than 20 additional gaming facilities in Louisiana. To put simply, Charles Cella hadn't seen anything yet.

"That sure has changed," Cella says now when reminded of the promises on those napkins. "And I would say it changed out of necessity rather than my will."

Implementing Change

Indeed, Oaklawn was the last track in America to add exotic wagering. The irony is that once that threshold was crossed, Oaklawn became a national leader in areas such as simulcasting and the invention of an electronic game known as Instant Racing. In 1990, Oaklawn became the first North American track to bring in full simulcasting cards across state lines. Pulled kicking and screaming into the brave new world of American entertainment, Cella decided to run.

"The kinds of things we're doing are as common as vegetable soup now, but we've had a number of firsts here," Cella said. "For instance, we were the first track to do away with 2-year-old racing."

Cella says W.T. Bishop, Oaklawn's general manager from 1971 until his death in 1987, didn't think Cella was serious when he suggested abolishing 2-year-old racing.

"The hardest thing we had to do was convince the trainers," Cella says. "We finally did it, and it didn't take long for Santa Anita and other large tracks to follow."

Not all the changes occurred voluntarily.

"The state Racing Commission mandated that we allow medications," Cella says. "That was a sad day, any way you look at it."

Cella, who has the manners of the patrician he is, remains a traditionalist in most senses. Yet those who know him best are quick to tell you he's also a shrewd businessman, a realist and the most competitive person they know.

After years of growth, Oaklawn hit the wall in 1985. Handle fell 8.1 percent and attendance fell 3.7 percent from the previous year. In 1986, attendance declined another 1.6 percent and handle fell 2.9 percent. That's when the Classix exotic bet (Oaklawn's version of a Pick-Six) was added. During the final portion of the 1987 meeting, Oaklawn allowed two exactas per day. The format then was expanded to four exactas. It wasn't enough. Attendance fell 7.3 percent and handle fell 7.1 percent from 1986.

Following Bishop's death in 1987, operations director Eric Jackson, a longtime student of racing's business aspects, took over as the general manager. Jackson, a Hot Springs native who had studied economics at Hendrix College, knew more drastic changes were needed. Working with Cella, he began changing the face of Oaklawn.

Those changes did not occur overnight. And there were trial runs that failed. Oaklawn extended its meeting to 68 days in 1988 and tried racing five days a week. Attendance fell 14.2 percent and handle dropped another 13.3 percent. By 1989, Oaklawn was in front of the Arkansas Legislature, successfully lobbying for approval of an act that reduced the pari-mutuel tax from 5.5 percent to 2.5 percent, permitted offseason simulcasting and allowed the Sunday racing issue to be decided by a public referendum. The following year, a schedule of races on both Saturdays and Sundays led to increases of 11.4 percent in average daily attendance and 10.6 percent in handle. What is now a much-anticipated Presidents Day promotion also began in 1990.

Instant Racing, which allows Oaklawn patrons to wager on previously run races, was added in 2000. AmTote Inc. teamed with Oaklawn and other investors to introduce the game, marking the first time that racing interests had entered the electronic gaming business.

"Look, this idea of us being Oaklawn Racing-Gaming worries me," Cella said. "I'm a racetrack guy. But without the gaming aspect, we would go under. It's as simple as that. Our job, in my opinion, is to make sure racing remains the main attraction here. Not for one minute will I tolerate cutting back on what we do in the area of racing in order to promote gaming."

Financing is in place for the new gaming facility, and work will begin soon after the Arkansas Derby is run April 12. When talking about the gaming facility, Cella seems more resigned to economic realities than excited.

"We'll see what happens," he says. "The big thing will be the ability to use the gaming proceeds to augment our racing purses. Now that's a thought that gives me a real blood transfusion. That's exciting. I can assure you there will always be live racing at Oaklawn. The presentation will continue to change. The look of this facility will continue to change. The racing will go on."

Stepping Up to Lead

Cella attended college at Washington and Lee University in Lexington, Va., a small but prestigious liberal arts school. His plans after graduation were to return home to St. Louis and concentrate on the family business, which included large real estate and banking interests in addition to the theater and racing parts of the family portfolio.

In 1968, John Cella died suddenly of a stroke. At age 31, Charles Cella found himself in charge of Southern Real Estate & Financial Co. and the other family enterprises, including a racetrack in Arkansas that had been owned by a Cella since 1916.

"It was a total shock," he says of his father's death. "I was playing in a golf tournament when I got the news right before lunch. He was my Lombardi. He was tough - really tough. But he always praised you right before you broke. There was a lot of insomnia for me in the weeks and months after his death. It probably would have been easier for us to divest ourselves of the racing interests. For whatever reason, we hung on."

William J. Smith, a prominent Little Rock attorney, had been one of John Cella's best friends. He would go on to advise Charles Cella, becoming almost like a second father to him. Smith's law partner, Little Rock attorney Herschel Friday, later would play the role of strategic adviser and Arkansas political fixer for Charles Cella.

"I had to learn the racing business quickly," Cella says. "As I like to say, you're not a sailor until you cross the ocean and don't pitch. I was part of a group of racetrack operators who served as the bridge between the old ways of doing things and the new ways. I've always had the greatest respect for the sport. The way I look at it, you don't have the right to run a racetrack, you have the privilege. We could run at night if we wanted to do so. We could run in the fall. But I've never felt it was in the state's best interest to do those things."

Upholding Traditions

The family-owned track is now a rare thing. It's a tradition Cella hopes will continue at Oaklawn under the leadership of his sons, John and Louis. The Cella family once owned tracks in St. Louis (the Fairgrounds Racetrack on Grand Avenue and the Delmar Racetrack in University City), New Orleans, Canada and Kentucky. After Cella's father sold Fort Erie in Ontario to E.P. Taylor and the Ontario Jockey Club in the early 1950s, only Oaklawn was left as a Cella-owned track.

"The great thing about this operation is that you don't have many stockholders you have to answer to," Cella says. "The track has been a huge part of my life. I can't imagine not being here. Both John and Louis already know more about racing than I do. I think we have some good days ahead of us. They understand their responsibility when it comes to operating Oaklawn."

Cella, meanwhile, understands the role Hot Springs has played in Oaklawn's success.

"I've often joked that the key to this place is that once you get here, there are so few roads that you can't get out," he says. "Hot Springs has such a rich history as a place that people of all types want to visit. If you like the outdoors, this place has everything you need. It has mountains, lakes, streams."

Cella, once a nationally ranked squash player, has slowed considerably at age 71. Still, the fire burns when he speaks of thoroughbred racing.

As a thoroughbred owner, he has raced numerous horses. The bestknown was Northern Spur. Cella purchased Northern Spur in France in 1994 for a reported price of $1 million to $1.4 million. Northern Spur won the 1995 Breeders' Cup Turf at Belmont Park for Cella and earned the Eclipse Award for outstanding Turf Male. In 2005, Oaklawn and the Cella family received the Eclipse Award of Merit in recognition of lifetime achievement in thoroughbred racing. Earlier this year, Cella was inducted into the Arkansas Sports Hall of Fame.

Innovations at Oaklawn

Among Cella's best innovations was the 1974 birth of the Racing Festival of the South. The festival includes a stakes race a day on the final seven days of racing each year, culminating with the Arkansas Derby. The Cella idea that paid off the most in terms of national publicity came three decades later in 2004. Cella announced that any horse that could sweep the Rebel Stakes at Oaklawn, the Arkansas Derby and the Kentucky Derby would win a bonus of $5 million in celebration of Oaklawn's centennial year.

Along came Smarty Jones.

"I remember we were in a meeting in Little Rock with the folks at Cranford Johnson Robinson Woods to talk about ways to promote the centennial," Cella said. "The boys at CJRW almost fell over when I mentioned the idea of a $5 million bonus. They looked at me as if I had gone mad. But in 1904, my grandfather had given $50,000 to the winner of a handicap in honor of the St. Louis World's Fair. I multiplied $50,000 by 100 and came up with $5 million. I didn't realize at the time that the whole thing would play out like a Hollywood script. As it turned out, that money was the best investment I ever made. You could not have drawn it up any better. Due to all the publicity Smarty Jones received, other trainers began giving Oaklawn a closer look."

After Smarty Jones won the Rebel Stakes and the Arkansas Derby, Cella went back to St. Louis and began negotiating with his insurer, Lavin Insurance of Goshen, Ky. Cella had insured the first $2.5 million with Lavin. It was two days prior to the Kentucky Derby before Lavin insured the remaining $2.5 million. The $5.8 million Smarty Jones won at Churchill Downs was the most ever paid to a horse for one race. More than 7,000 people showed up at Oaklawn that day just to witness the simulcast.

Insurance underwriters likely insured the first $2.5 million based on the fact that only one horse (Sunny's Halo in 1983) had won all three races since the Rebel began in 1961. With the chances of winning less than one in 40, a premium of less than 10 percent of the bonus was probably required. Smarty Jones went into the Kentucky Derby with 4-to-1 odds, meaning that the premium on the second $2.5 million likely was 25 percent or more.

Smarty Jones went on to win the Preakness in addition to the Kentucky Derby, becoming the most famous 3-year-old in years and capturing the hearts of Americans who had never followed racing. A year later, Arkansas Derby winner Afleet Alex won the Preakness and the Belmont States. Now, the racing world was noticing that the previous two Arkansas Derby winners had captured four of six Triple Crown races.

The run of success continued last year after Curlin won the Arkansas Derby. After finishing third in the Kentucky Derby, Curlin won the Preakness and finished second in the Belmont Stakes. He would go on to win the Jockey Club Gold Cup at Belmont Park on Sept. 30 and the Breeders' Cup Classic at Monmouth Park on Oct. 27 en route to being named the Eclipse Award Horse of the Year.

So what is most rewarding for a sportsman such as Charles Cella - being nationally ranked in squash, seeing a horse he owns win the Breeders' Cup Turf or seeing an Arkansas Derby winner become Horse of the Year?

"In all sports, the satisfaction comes from knowing how hard you have worked and how well you have prepared," he says. "If you lose but are fully spent at the end, that's OK. When you win, that's lagniappe."

 

 

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