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Thursday, October 18, 2007

Franchise Feedback

- My last post about Bruno's franchise proposal drew some skeptical (and anonymous) comments. The first one read - Okay: The pot calling the kettle (black.)

The Spitzer plan took nine months and raised as many questions as it answered and still doesn't answer who runs vlt's at Aqueduct.
Another wrote:
Bruno knows and cares more about the past, present and future of racing than Spitzer and Silver will ever know in their lifetimes. He's also tired of Kentucky calling the shots in NY. My hats's off to Bruno and Larkin on this one!
And one more:
NYRA has a summer of good weather at saratoga and everybody's drooling to give this bankrupt and corrupt group 30 more years and hundreds of millions more in tax payer subsidies.
I appreciate hearing opposing views as always, and certainly understand peoples' frustrations with the present state of affairs, in particular the decaying infrastructure, both in the grandstands and backstretches. And while I don't believe that NYRA is corrupt, they're certainly bankrupt, though how much, or if they're at all really responsible is certainly a matter of debate in my view.

I've never been opposed to the idea of an alternative to NYRA, but I am opposed to the alternatives that have been presented. If Bruno had made his proposal 18 months ago, then perhaps it could have made a positive contribution in some way, especially of course with respect to OTB (especially not with respect to the creation of a new layer of politically-appointed bureaucracy). But at this late date, to make a proposal of such complexity that he has to know makes it politically and logistically impossible (not to mention completely dismissive of the land claim issue) is in my opinion plainly and simply obstructionist.

26 Comments:

Michael said...

Why does the NY racing franchise have to be awarded for such a long period of time. While no-one relishes going through this process again, federal and state government award contracts daily with much bigger implications with a much shorter life-span. Why give NYRA the contract for 30 years (or 20 like the initial idea), when you could instead do it for 5 with or without option years? Color me a skeptic, but I think that NYRA gets a 30 year franchise and we'll be back to the same old bankrupt and corrupt group that we were all watching in disbelief as they apparently ran NY racing into the ground just a few years ago.

Trust me, the government does follow-on contracts like the one I suggest all the time -- from national defense to public health to janitorial services, it's done.

Anonymous said...

A good bet



In the 60’s the Governor had an idea to turn a declining shipping industry into a community. The 90 acres of land replaced under utilized piers on the lower west side of Manhattan. The planned community called Battery Park City includes 9,000 units for some 19,000 people, 10 million square feet of office space for 50,000 workers, and hundreds of thousands of square feet of retail space. Public amenities abound including - a marina, 3 public schools, 2 museums, 2 memorials, a fine art program and one of the finest 35 acre park systems in the world.. Along the way – this enterprise has fueled the economy by building out infrastructure and billions of dollars worth of commercial and residential buildings. Moreover it has produced billions of dollars in added revenues for the local government. As NYRA and the State try to find a way to turn around a race racing industry which is losing money, they should look to the past. It is a good bet for both the private and public sectors.

Anonymous said...

The objective reason for a length of term exceeding twenty years is to permit the amortization of capital debt necessary for facility improvements to be made.

The initial problem with the thirty year term is that NYRA did not promise to make a single capital improvement in the Spitzer MOU. There is no link back to the response they submitted to the ad hoc committee. Not sure what expenses they need to amort.

Beyond that, the Spitzer MOU requires NYRA expend a percentage of vlt revenues on facility improvements. You cannot tell from the MOU whether capital improvements will be fully funded from the vlt monies or whether additional borrowing is required. If the former, there is no need for thirty years.

That's the biggest problem with the Spitzer and Bruno proposals ... they're very thin. There has been no legislation proposed that I can locate. The legislature is being asked to consider an "idea." Wonderful in concept, but can the Assembly and Senate can pass an "idea"?

Anonymous said...

points others have made here before need to be restated.

NYRA had a chance to run the OTBs back in the day, by they didn't want to deal with the low brow crowd, so they passed. They are doing the same with VLTs. They want the money from the slots but not the headache or reputation that come with "gambling."

NYC OTB going belly up will be a body slam to the "New NYRA" (cough, cough, laugh, wink) early next year. Bloomberg notes that NYC OTB subsidies have played a big roll in the recent NYRA bailouts and he's correct.

NYRA are/were they corrupt? Everyone who homes for NYRA (Christ, Kling et al) all say it was just a minor problem with pari-mutuel clerks. Well it was more than that. NYRA gave them W-2s for years and condoned the process at a time when Charlie and Steve and Dinny were all on the board, so so much for the "New NYRA". Someone said here or on one of the other blogs that the thing that makes this the "New NYRA" is that there is no longer even a pretense of them paying their debts. That's left to us taxpayers. This doesn't even get into the illegal use of the horsemens funds, non-payment of property taxes, no bid contracts.

This is a group of people with more connections to Kentucky than to New York. They held the state hostage on bankruptcy and land claims. Maybe we do want the bankruptcy court runiing racing because the lawyers seem to be doing a better job with their process than NYRA does with racing.

Yeah empire sucks, and all the bidders had problems too, but with NYRA we know what we have and we're still willing to give away the store to what is in effect a private club reserved for rich white guys that you and I will never be invited to join, just to support.

Anonymous said...

Right on the last comment! (10:07) Lets take Charlie and Dinny and the boys off the job. Call the NYRA land deal what it is – attempted extortion – and let the courts run the tracks until some plan with a bit sense takes hold.

With Spitzer's plan it's all the same club just coverted to look like thing else.

GET RID OF NYRA for the good of racing in this state.

Anonymous said...

The most honest and forthright series of posts concerning the franchise process and award that I have ever read on this blog. Indeed there is a better answer than the NYRA running racing in NY. This is quite obvious to any of us that race horses in NY, or come to the races as a betting fan. I hope for the sake of racing, not only in NY but in America, that we take enough time to let cooler heads prevail, and then make the best possible determination. Only the NYRA is in a hurry to make a deal.

alan said...

I think the fact that there have been no pro-NYRA comments is telling. I know they're out there, as well as those such as myself who feel that Spitzer's proposal is acceptable (with certain conditions) and in fact inevitable given the current reality on the ground. But I'd guess that that view doesn't inspire the passion that causes those opposed to take the time to write in. I wish that Spitzer had conducted an open process and been willing to listen to opinions such as yours instead of conducting the entire process in secret.

Tell me, how did you feel about Excelsior, as they were constituted at the time with Swindal/Steinbrenner and Fields, as the Ad Hoc Committee's selection?

Teresa said...

OK, Alan, I'll bite. I'm pro-NYRA for three reasons. The first is that I grew up in Saratoga and I have total confidence that NYRA gets Saratoga and will it leave alone. The second is that of all the entities bidding, they are the only one who is both non-profit and whose #1 priority is racing. The third is that I believe that they've got a great case in court regarding the land. They've paid taxes for fifty years on land that doesn't belong to them? How can that be?

Anonymous said...

I agree, Alan, at least Bruno is willing to tackle the OTB's and that nest of political hacks, so let's give him some credit on this one. He must have something up his sleeve to prolong this whole song and dance production; I think at the least Sen Bruno has demonstrated that he is one old pro pol and when it comes to matching political wits I think Joe is at least even money vs the Steamroller at 2-1.

Anonymous said...

Alan: Remember, Excelsior Racing was never really going to run racing in NY. From the beginning, their racing experience was intended to come from the use of the former NYRA under their new supervision. Although as Excelsior's racing expert, Jerry Bailey said he was "traveling all over the country recruiting a management team." Do you think he really ever did that, and if so I wonder who he came up with, and why they never became a part of any discussion relative to the franchise? In my opinion, awarding Excelsior the franchise was a way for the NYRA to look like they lost the process in the eyes of the NY taxpayers, at least in terms of the control over the gaming and real estate develoment. Then, by threatening all involved with the "land claim", Excelsior and the state would acquiesce on the racing component in order to keep the NYRA trustees in position to protect the Graded Stakes program that drives Kentucky breeding, and their "private club" like ability to trade Saratoga boxes for favors and fulfilling its elitist status. Excelsior's key backer when selected by Pataki's Ad Hoc Committee was Steinbrenner, a former big time NYRA trustee. The "boss" has a track record of questionable "donations", as presidential history would note, so why not use his presence and money in a state where he holds tremendous political clout and where his Yankees franchise is so succesful, as a reason to permit his restructuring of his old friends in racing and breeding, the former NYRA? That's my personal spin on Excelsior. Thanks for asking.

Anonymous said...

More interesting comments vis-a-vis the Ky breeders/Breeders Cup duality in racing these days. I hate to rain on the big upcoming parade a week before post time but something needs to be done to put the horses back in the all of the other graded stakes races from February- December. First step is to establish a point system for Eclipse Awards such that victory in a BC race and 1 or 2 others during the season will not be sufficient to win the prize. This system will reward those stables who run their stock, not keep them back in the barn looking for soft spot run-ups to the BC. /S/Green Mtn Punter

Anonymous said...

Since you asked ...

I thought the Excelsior selection by the Ad Hoc Committee was reasonable. They put forth a good plan for the racing, backstretch, video lottery and additional development. Empire did much of the same, but I was uncomfortable with them trying to be all things to all people. Likewise, I was always uncomfortable with Empire’s plan for simulcasting. That’s where the future money is with horse racing - something NYRA seems aware of but does nothing about other than complain about the pricing model (a model they created by giving away the signal twenty years ago). I always had a problem with NYRA's proposals because it seemed like they had no ideas compared with Excelsior and Empire.

It’s important to note that the bidders considered by the Ad Hoc Committee are not the bidders of today: Excelsior (subtract Fields, Swindal, Tishman Speyer; add Wynn, The Related Companies), Empire Racing (subtract Churchill, NYTHA, Magna, Delaware North) and NYRA (subtract MGM). The decision made by the Ad Hoc Committee on November 21, 2006 might not be the same decision the Ad Hoc Committee would make today.

"Old" Excelsior never stated that they had internally the experience to operate racing. They were idea and concept people. Fields made a point that he hired people to execute; he was an overseer.
George Steinbrenner was never himself involved with Excelsior. A group headed by Steven Swindal, his now ex-son-in-law, possessed 22.5 percent of the partnership. The group included a few Steinbrenner sons and daughters, not the old man. The inference was made by press that the old man was behind everything - something Howard Rubenstein time and time again specifically rebutted. I think this was made clear when the Steinbrenner family bailed on Excelsior soon after Swindal was served divorce papers. Many many not be aware, but Steinbrenner’s term on the NYRA Board was not smooth. He departed on a decidedly unfriendly basis with many of the old guard and thus was not likely to be secretly carrying their water.

Anonymous at 1:51 p.m. stated: "Although as Excelsior's racing expert, Jerry Bailey said he was "traveling all over the country recruiting a management team." Do you think he really ever did that, and if so I wonder who he came up with, and why they never became a part of any discussion relative to the franchise?" Rumor had heard one highly qualified individual was committed to operating the racing side for Excelsior. He could not be publicly announced, given that he was employed by a partner of Empire (not an unlikely situation, given that partners had some thirty-odd racetracks). I guess we'll never know.

It’s always interesting when the press people reference the Ad Hoc Committee as "Pataki-based" and their decision being driven by former Governor Pataki. Anyone paying attention found that two of the three Pataki appointees (Barrett and Castro) voted in favor of Empire Racing. All Senate and Assembly appointees, presumably three democrats and three republicans, voted six to nothing for Excelsior.

As a final note, the Ad Hoc Committee RFP included a provision regarding the consolidation of off-track betting corporations into a single public benefit corporation, with seats on its board from each licensed racetrack and off-track betting region. Not a single bid evidenced additional value with the off-track betting consolidation ... including NYRA.

P.S.: Green Mountain’s suggestion on Eclipse awards being based on points from race placement has merit.

Anonymous said...

Teresa. All bidders said they would leave saratoga intact in it's historical form and meet length. Even if they did have other plans they would never dare cross the powerful saratoga communty. Talk about a political lobby! NYRA's only community outreach occurs in saratoga. 2006-2007 more than any I can remember. Charly really played to the townfolk. Concerned citizens group etc... I spend over 200 days a year at belmont and I hpe they GO!! SOON!! What's new about them?? New execs with bigger salaries than ever before. Old management promoted to VP status to justify raises to bankruptcy judge? What about them is good Alan? They gave the horsemen their due money in purses. They had to.

Anonymous said...

I'll take the bait and state that, yes, NYRA is still the best choice to operate NY racing. My take has not changed since this whole saga began: NYRA played the poor hand it was dealt pretty well. The problem isn't NYRA but rather the business model straitjacket NY racing has been forced into, and all of those pols in Albany wanting to micromanage the entire production for their benefit.
/S/ Green Mtn Punter

Anonymous said...

Does anyone know what Steinbrener did to upset the "old" NYRA guard as a previous poster suggests? I remember back sometime 2003-2005 when blogs and publications were promoting Steinbrenner to be the next "NY Racing Czar" in order to make everything better. In 2005, Albany Law School even did a paper on him "George Steinbrenner: His early Life in NY Racing" I don't think attorney Rubenstein completely understood the question concerning Steinbrenner's interest, or perhaps the Yankees "boss" needed to stay below Bud Selig's radar screen related to Major League Baseball ownership's conflict with gambling.

alan said...

>>What about them is good Alan?

Look, I'm not a horseman, nor do I demand much at a racetrack other than competitive racing, reasonably clean facilities, and easy access to wagering. I've been going to NYRA tracks for 30+ years, and I have to say that, in terms of the above, I've always been a pretty happy camper at all three tracks. Every single day without exception? No. But certainly for the most part, as evidenced by the fact that I still go as often as ever. So from that standpoint, as a fan and horseplayer, I'm perfectly comfortable with the idea of them continuing to run the tracks. Obviously, things could be much better, especially for those dealing with deteriorating backstretch conditions. But I feel that it's the current business model in the state that's responsible, and that any operator would be in basically the same position.

Regarding the idea that NYRA is corrupt, I have to say, at the possible risk of being a bad person, that mutuel tellers cheating on their income taxes, even if tacitly condoned by management, barely registers on the scale of what my idea of corruption is in this day and age. I'd guess that the total net effect to the IRS was a mere fraction of what a single U.S. corporation operating out of a bogus address in Bermuda is costing the government these days.

Anonymous said...

I'd say corruption is violating the public trust to benefit ones self. Awarding contracts to relatives of management might also be considered corrupt. Nothing has changed it's still the same old cast of nyra characters just promoted with a few new over compensated faces.

Anonymous said...

Corruption is not only guaged by it's "effect to the irs". I would dare say a corrupt NYRA has more effect on the NY tax payer, racing fans and horsemen than ANY dummy offshore corporate address. The sport needs NY. NY needs and deserves real transparancy and true integrity.

Anonymous said...

MLB would have had no problem with Steinbrenner. Recall he owned Tampa Bay Downs at one point. Swindall and the Steinbrenner progeny co-own Balmoral and Maywood in Illinois. Baseball ownership and management rules permit horseracing interests. As Swindal pointed out last year, the vlts were lottery-based and controlled, thus affording yet another baseball ownership and management exemption.

At the end, didn't matter given George never had an interest in Excelsior.

Anonymous said...

A previous poster said, "George never had an interst in Excelsior." I stopped believing in the Easter Bunny and Santa Claus a long time ago, therefore I don't belive your comment. Steinbrenner didn't drop off as a NYRA trustee, with 2 years remaining on his term, to not have any interest in NY racing, in this case through Excelsior. Do you really believ that the druunken adultering Swindal was the one behind the investment?

Anonymous said...

Swindal was behind the investment in Excelsior, otherwise how do you account for the collapse of interest in the wake of Swindal's DWI and subsequent divorce proceedings? Had George been involved, why not just keep the investment and replace Swindal with one of the many Steinbrenner sons or daughters? Answer: he wasn't involved.

Most people think George was involved, simply because it makes for a better story. Easter Bunny? Santa Claus? Figments of imagination ... like Steinbrenner's involvement with Excelsior.

Anonymous said...

Steinbrenner's involvement with Excelsior was meant to save the NYRA, not necessarily to be a figurehead of the takeover organization. Why did he publicly back away when Swindal was nabbed? Because the Nutting family from the baseball Pirates ownership were rejected as a casino owner on account of MLB regulations in fall of 2006, thus the watchful eyes of MLB were on Steinbrener and his Yankees. Remember, Selig never signed off to the Yankee involvement. He just indicated that he was aware of the pending situation. Swindal had no reason to be passionate about racing or VLT gaming, so it certainly wasn't his idea in the first place. The "boss" had Pataki and Bloomberg marching to his drums on the new stadium deal in the Bronx during the same timeframe that his Excelsior group was chosen by the RFP committee. Surely the most powerful man in NY state at the time and a very interested and well connected horseman.

Anonymous said...

Please ...

Nutting’s involvement with the Pennsylvania casino is night and day with the Swindal situation. Major League Baseball prohibits “any ownership interest” in gambling businesses, but allows interesst in some "legalized gambling enterprise or permitted lottery," according to rules provided by the National Baseball Hall of Fame and Museum. See, Michael Gormley, From MLB to VLTs? Associated Press, February 25, 2007.

The legalized gambling permitted is horse racing, hence George Steinbrenner’s half ownership of Tampa Downs with the Thayer family. Kinsman Stables is another example of Major League Baseball’s permitting horse racing interests. Permitted lottery? See, Dalton v. Saratoga Chamber of Commerce from the New York Court of Appeals. Video lottery gaming is a lawful extension of the public lottery. ergo no problem with baseball.

Whomever stated Steve Swindal wasn’t interested in horse racing just didn’t know Swindal. Until recently, Swindal was more involved with racing than baseball, serving as the most senior members of the Steinbrenner family at Tampa Downs, Balmoral Park and Maywood Park. In fact, many Steinbrenners are still affiliated with the Illinois racetracks: Balmoral Racing Club, Inc. lists Christina Steinbrenner as Vice President, Jennifer Swindal as Assistant Secretary, Jessica Steinbrenner as Assistant Treasurer and Joan Z. Steinbrenner as Director. Maywood’s web site is not as complete, but I would imagine a similar grouping in management there as well.

Anonymous said...

I've never seen Swindal at the races. Seen the "Boss" plenty

alan said...

George has been OK by me ever since he had a Yankee game held up between innings to show an entire replay of Victory Gallop's Belmont win.

Anonymous said...

Was anyone out there Saturday? The infield video screen was out for one of the bigger race days of the year- NY Stakes Day. No announcements, nothing. just another day at a lousy NYRA track. Alan, there nothing good about NYRA.