Franchise Fourplay

- On Tuesday and Wednesday, the four bidders for the NY racing franchise will make their presentations in Albany to Gov Spitzer's committee, which doesn't seem to have a name. It's being referred to generally as something like the "committee chaired by his special counsel, Richard Rifkin." I suppose it's really an Ad Hoc committee, but that name was already used. So we'll just call it the Rifkin Committee. The schedule is Empire and NYRA on Tuesday at 10 AM and 2 PM respectively; and Capital Play and Excelsior at the same time in that order on Wednesday. I wonder if they had to draw straws to determine that order? The hearings will be open to the public, but I don't believe it's being simulcast.

Each bidder has filed written addendums to their previous proposals, and if you're interested, you can find them here. At this point, I think it probably suffices to say that they are all offering a lot of money, upgrades, and, especially, integrity and leave it at that. But I couldn't help to take a quick peek.

One thing I can say is if the franchise is awarded on the visual quality of the written presentations, NYRA can pack up its bags and go home now. The other three bidders submitted slick packages, featuring charts, sidebars, diagrams, and photos. NYRA did nothing of the sort. There are submissions of old documents, a 150 page exhibit that seems to be from 2005, and, still, charts of pending legal issues, this time in redacted form, with the names and details crossed out in black marker. It gives the appearance that they're simply trying to make the troubled past go away. I suppose that NYRA is planning to wow the Rifkin Committee with their public presentation.

It's also worth noting that NYRA submitted a cover letter defending their claim to the land.

"NYRA does not admit, concede or acquiesce to the appropriateness or legality to the RFP process," NYRA senior vice president and general counsel Patrick Kehoe wrote.

Its 1,353-page bid "does not constitute an admission ... that the state of New York has any current or prospective ownership right." [Associated Press]

Empire's proposal reads more like a marketing brochure than either of the other two. It includes italicized exhortations such as We are ready. It is time to get to work It includes expected revisions such as a pledge to fully fund the pension shortfall, immediate installation of a synthetic surface at Aqueduct and the Belmont training track, and more details of proposals regarding its plans to upgrade the backstretch. Those were all aspects of their initial proposal that the Ad Hoc Committees specifically singled out as being deficient. Indeed, for Empire, this was nothing but a do-over, like getting to take a regents exam all over again once knowing where you went wrong.

One thing they have not changed, however, is their proposal to increase the takeout. No modifications are proposed to this section, it reads in the section entitled Policy With Regard to Retention Rates. Remember, they are pitching this to politicians, not to the betting public, and what do politicians care about a few more percentage points taken out of bettors pockets, even if they're going to enrich the shareholders rather than the taxpayers.

Empire also emphasizes the presence of Churchill Downs and Magna on the team. They claim to have the "exclusive power" to coordinate industry post times, using Fair Grounds (Churchill) and Gulfstream (Magna) as examples. They display photos of backstretch facilities at Arlington and Palm Meadows. They tout the new TrackMedia project of the two companies, and propose to create a “Road to the Derby" wagering and marketing campaign. For a couple of partners whose influence Empire has repeatedly sought to minimize in response to criticism, they sure play a prominent role in this proposal.

Personally, I still think it's a miscalculation on their part. I don't know that the politicians they're appealing to could give a rat's ass about coordinated post times or even the triple crown; and I'm sure that anything they know about Magna is strictly negative. And I remain resentful that Empire ignored the nearly unanimous and vehement sentiment against Magna in light of their blatant mismanagement, overwhelming debt, and, most especially, the almost universal derision and anger about the demolition and ill-conceived rebuild of Gulfstream Park. I just don't want to see these guys here in my state and my tracks, scoring a huge profit on their investment without doing anything whatsoever to earn it.

After the presentations this week, I suppose that the Rifkin Committee will report their findings to the Governor, and, by Memorial Day we're told, Eliot Spitzer, that Great and Powerful Wizard of Integrity, will make his decision. And since that decision will have to be approved by the legislature, they'll be the usual wrangling and deal-making in what will be a completely closed process in the usual Albany way. The secrecy of the recent budget agreement clearly showed that that aspect of state politics remains the same with the new administration.

For all of Spitzer's talk about change and openness in government, take a look at what we have here. The Ad Hoc Committee conducted public hearings, took testimony from industry insiders, experts, and fans alike (which they actually listened to and considered), constructed an orderly, if flawed proposal process, came to a rational, if arguable decision based on months of careful consideration, and posted their conclusions and logic on a public website for all to see. Now instead, four bidders will dazzle yet another committee with flashy power point proposals in a so-called public hearing that has no apparent time that I've seen being set aside for questions or input from that public. That committee will report to Spitzer, who, accompanied by Joe Bruno and Sheldon Silver, will come to a decision in six weeks. And the process and logic of that decision will most likely never be known to us. That's the new Albany under Eliot Spitzer. He's the new boss, and it looks like we've been fooled again.