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Saturday, June 16, 2007

Governor Getting It Wrong

- James Odato, reporting for the Albany Times-Union, wrote of the latest developments in the franchise situation on Saturday and it's not good news. Aqueduct would be shuttered and sold, Belmont winterized for year-round racing, NYRA would get a 20-year extension and give up the rights to the land "in perpetuity," and Excelsior Racing Associates, a group headed by a major Spitzer contributor, would operate a VLT parlor at Belmont. There are so many things wrong here that I don't really know where to start. So here's just a few:

- I've often praised NYRA's Charles Hayward for being a straight shooter. But on Friday, Paul Post reported in the Saratogian:

Hayward said Spitzer's office has not contacted NYRA, formally asking it to continue running the state's tracks. "We have heard nothing about any details of that plan," he said.
However, Odato writes that the deal was approved by the NYRA board's executive committee last week.. What's up with that?

- Spitzer, as we've been reminded this week, affirmed when he came into office that the state owned the land, and that he wouldn't allow NYRA to use its claim to extend its franchise. Yet that's exactly what appears to happening.
Gaming law officials say Spitzer's special counsel, Richard Rifkin, appears worried by NYRA's claim to the land on which the tracks sit.

Spitzer, as both attorney general and a gubernatorial candidate last year, declared the tracks state property. At one point in the campaign, he said that if NYRA didn't understand that it is a "pawn" of the state, "they should be tossed out on their ear if they don't understand."

Now, though, a Spitzer administration official said the fear is that a prolonged court fight with NYRA, which is operating under the protection of U.S. Bankruptcy Court, could hold up the franchise. [Albany Times-Union]
There's two ways of looking at this - If Spitzer and Rifkin thoroughly looked at the situation and came to the conclusion that they could not win a court case against NYRA, then it would make sense to pursue this course. But is that what's really happening here? Every expert whose opinion I've seen or read agrees that the state owns the land pursuant to the 1983 franchise extension in which the association agreed to give it up should the franchise be lost.

I'm not going to claim to know how a court case over the issue would come out. And I don't know that anything good would ever come out of the state obtaining ownership of the land. But my question is whether Spitzer is really acting out of a reasoned conclusion that the state would lose, or if he just simply doesn't want to bother and thus risk any further delay in the VLT revenues which are part of his budget passed earlier this year.
"The governor has totally ignored anything to do with racing," said Pam Stokes Donehower, president of International Racing Management, a firm dedicated to promoting responsible thoroughbred horse ownership. "All the focus is on VLTs. New York has 30 percent of the country's Grade I races. The graded stakes program is what holds up the breeding program globally.

"It's being totally ignored by this governor. He doesn't understand it and neither do the people advising him."
"This governor is not hearing that thoroughbred racing is a very vibrant, living industry," Donehower said. "It's unbelievable when you hear the comments coming out of his office." [Saratogian]
Assemblyman Gary Pretlow, the chairman of that chamber's Racing and Wagering Committee, said: "I disagree with him (Spitzer) giving in on this land claim." Someone who really cared about the racing industry may feel that it's a fight worth fighting if he/she felt that racing would be better off under another operator (if, that is, he/she cared about or even actually knew much about those bidders).

- Spitzer rode into office on his promises of transparency in government, and to end the days of 'three men in a room,' and he's partially succeeded in this case - he's currently the only man in the room making these decisions. Worst of all, he is seeking to have Aqueduct shut down and sold off without one peep of discussion or public comment. The Ad Hoc Committee conducted public hearings in Albany and New York City, and released every dotted 'i' and crossed 't' to the public; and even Spitzer went through the motions of public hearings with the Rifkin Committee sessions in April. But this is all unfolding in the governor's chambers, and if not for a couple of enterprising reporters, we may not have known anything at all. One reader has been emailing me for months with grim forebodings of an Aqueduct land grab akin to that which turned our beloved Roosevelt Raceway into a shopping mall. Spitzer is attempting to do just that, and though the chances of him getting this legislation through this week is considered to be questionable at best, one never knows, and the opposition of a few lawmakers from Queens wouldn't be enough to stop this on its own.

- Sometime soon, Governor Spitzer will make a statement which will go something like this:
"The decision to award gaming rights to Excelsior was made strictly on the merits of their bid. Richard Fields was properly compensated for the use of his airplane during my campaign, and his presence in Excelsior played no role whatsoever in the decision. Indeed, a committee appointed by my predecessor considered each bid in detail and selected Excelsior to be the next franchise holder."
And in doing so, he will sound just like the thousands of politicians that he pledged not to be.

- A spokesperson for Empire told the New York Times:
“Empire proposed keeping racing and gaming together....But if the governor and the legislature that it should be separate, Empire would pursue the gaming.”
Oh, really? We thought that Empire was all about the racing? Perhaps they want to recoup that $3 million they've spent on the bid? The fact is that if Empire conducted racing as well as they did their campaign for the franchise, we'd be better off without them. They came out of the gate in a mean-spirited attack mode that didn't at all reflect well on them nor add anything to the debate; and they enlisted unpopular partners that made for bad PR. When they got around to talking about their own plans, they put a lot of emphasis into an upstate development plan that they thought would be appealing to the politicians. But when Empire met with Spitzer on the Friday before the Belmont, the idea of upstate economic development never came up, Empire CEO Jeff Perlee said.
In fact, he said, "It was left on the cutting room floor."
And after a series of miscalculations, so, apparently, is Empire's bid.


Anonymous said...

First, Spitzer throws out the agreed upon set of rules for choosing a franchise operator, then tries to ram this Empire/NYRA marriage down the Assembly's collective throat.

NYRA has run this franchise into the ground, and that includes the Hayward regime too. Keeping NYRA intact to operate these tracks is only asking for more of the same crap - a terrible experience going to the track. Saratoga runs itself.
"So much for the transparency in decision making promised by Governor Spitzer."

Even though I voted for him, the way Spitzer and his henchmen have run this clown show makes me wish for the good old Pataki days.


Anonymous said...

Alan, thanks for the update and your always insightful comments on the franchise situation- the best reporting on this seems to be coming from the Albany Times-Union and The Saratogian, both "company" towns as it were. Have to disagree totally with Anon's post: NYRA is not the problem,it's just the whipping boy; it's the pols and their meddling and complete ignorance of and disregard for the NY racing industry that has always been the problem. Blame NYRA and the NY racing industry for not being more forceful and effective advocates; the pitched battle over the franchise over the past 2+ years has just added more fuel to the fire and gives the pols a cover to do whatever they want- "See, the racing industry is paralyzed, there is no consensus, it has no leadership so we wisemen of Albany have no choice but to work it out for them." It just proves once again that racing has no political clout in NY and without it we come off like so many Uriah Heep-like, ever so 'humble supplicants;NYRA is the only industry segment which has shown any balls in standing up to the pols and it appears that now they have to knuckle under too if they want to stay in on the racing side, but knuckle under only after The Big A stays in the fold! Empire should call it a day and get behind the new regime- the last thing we need is continued dissension in the ranks or, worse, a scorched earth policy in retreat. /S/Green Mtn Punter

Anonymous said...


Have ypu been to other tracks? You can not blame the the mess that is Aqu and the ghost town that is Belmont on the "pols" NYRA has been a corrupt and mismanaged operations for a long time. People don't care who work out there, compared to Woodbine, Santa or Monmouth (the last three track I've visited) this NYC racing experience really sucks. We've bput up with it for too long. NYRA has got to go.

Anonymous said...

Anon, I sympathize with the plight of the downstate tracks but that is not a result of NYRA corruption and/or incompetence but rather too little cash generated from operations; NYRA, to keep up the purse structure, pay the direct operating costs, and all the rest that goes with operating a race track simply did not have sufficient cash left to cover more than the immediately necessary maintenance. That's my take on it and would be glad to hear where I am wrong. /S/ Green Mtn Punter

Anonymous said...

Here's a different spin on things... If Hayward really believed NYRA would win the land claim issue why would he agree to give up NYRA's ownership in 20 years? After all this whole thing is going to be profitable again isn't it? Could it be Charlie is just looking out for Charlie's end? Maybe he could add more VPs to the payroll with more raises! I don't see how NYRA's board of trustees would allow giving up ownership if they really have a valid land claim. They already have the bankruptcy protection, they could prove their claim if it was legit.

Anonymous said...

Hayward ran the DRF for three years with Crist as the figure head. Hayward and cronies cut DRF's staff to the bone and sold out the database to Equibase.

Crist and his financial backer had paid something like 10 mil and in the master plan they sold it for 40 something mil. Hayward, Crist and the VPs made out extremely well. Lets say the principals in the deal won't have to worry about money again. So it would be no suprise to see Charlie Hayward pull the same over at NYRA. Cut the staff and add the VPs.