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Wednesday, November 22, 2006

More On Excelsior

- More details are coming out about Excelsior's winning bid for the NY franchise, and it seems ironic that the state committee went along with the non-profit racing/for-profit casino model that was being espoused by NYRA. But the incumbent operator could not offer the same guarantees of money that the other two did. They could not offer lease payments, as that would undermine their position that they own the land. Actually, according to the Albany Times-Union, their offers of payments based on the racinos and for capital improvements actually exceeded those of their rivals - by a wide margin regarding the latter, but the committee said it could not highly rate NYRA's commitments since they were not guaranteed.

Excelsior succeeded with its promise of $104 million in upgrades to the three tracks, compared to $59.2 million by Empire. It also guaranteed to make pension payments for track workers -- a liability now at $54.5 million and growing as NYRA works out of Chapter 11 bankruptcy.
- In the NY Daily News' Daily Politics blog, writer Bill Hammond suggests that Eliot Spitzer has put himself, and perhaps Excelsior, in a touchy position by having accepted discounted private jet rides from Excelsior principal and Spitzer campaign donor Richard Fields:
Does he ignore the panel's recommendation, or does he support giving a lucrative contract to a someone who loaned him a Gulfstream and pumped more than $200,000 into his campaign account?
- Empire's CEO Jeff Perlee told the Saratogian:
'We handily won integrity, racing experience and there was no mention here of economic development, which is a major component of our plan. Also, Senator Bruno becomes very important here, particularly when you look at operational experience. Will Senator Bruno be a party to turning Saratoga over to a dog track operator?'
We also read another representative of Empire refer to Excelsior as a "dog track operator" in an Associated Press story last night. A look at the key figures behind Excelsior reveal no obvious connections to dog racing, though it's entirely possible that someone connected with the group has such an association. Nonetheless, I think it's fair to say that that characterization would be an exaggeration even if that was the case.

But if you tell people something enough times, they come to believe it; that's part of what PR is all about. The AP story told us that the bulk of [Excelsior's] in harness racing and greyhound racing. In the Saratogian story, reporter Paul Post, who writes regularly of racing matters and should know better, wrote that Excelsior runs two Chicago harness tracks.

The fact is that William and John Johnston, referred to as "advisors" to Excelsior in the Times Union piece, own and operate Mayfield and Balmoral Park, two Chicago harness tracks. That hardly means that Excelsior "runs" them or is a harness track "operator." No more so than the presence of Delaware North as an investor in Empire makes the latter a "dog track operator," even though Delaware North is the owner of Wheeling Island Race Track, a greyhound track and racino located in West Virginia.


Green Mtn Punter said...

Alan, it looks like another couple of weeks before the full report of the Ad Hoc Committee is released. Interesting info you found about the NYRA bid being the most attractive money-wise, in addition to being a non-profit on the racing side, which the AHC seems to prefer as do I. Having been in business myself for over 30 years,and party to many negotiations, including negotiations with government agencies and legislative bodies, I just don't think this is over by any stretch. In fact, the race has not even entered the home stretch yet, contrary to Empire's statement. Excelsior showed a burst of speed down the backside but there's still a long way to the finish line, and a lot can happen during the remainder of the trip, so, like any 1 1/4 mile race, pace and good judgment now become key. In addition to tweaking the bids to make them more attractive, I wouldn't be at all surprised to learn that behind the scenes Excelsior and NYRA are already exploring some kind of alliance or outright partnership. NYRA has what Excelsior is most short of, i.e., experienced race track management, and together they would stand head and shoulders above Empire. In any event, however this unfolds, it's going to be interesting and exciting to watch- my only hope is that whichever bidder ends up with the franchise will prove to be the best possible long term solution for the NY racing industry. My biggest concern is that we end up with a political compromise that doesn't solve the structural problems of NY racing, a so-called solution which is just another political charade designed to fool the voters once again.

Anonymous said...

Well, the Fair Grounds opens Thursday for the first time since Hurricane Katrina. And incredibly, with all the money Churchill Downs spent to re-furbish the racetrack, they chose not to replace the racing surface. I'm no track superintendant, but i would think the track got pretty damn torn up. I read something about having to pick out all the debris that was deposited by the flood waters. Anything to save a little money, huh? Anyhow, it seems that Churchill has also chosen not to bring back the training races. What a damn shame.

Anonymous said...

And The Green Monkey gets turned out for the year with nary a start. I think I could live fairly comfortably on the interest his purchase price would earn.

Bank Check

Anonymous said...

I know it is not MR. S himself named in the bid, but it IS his money and or group, and he did/does? own and operater Tampa Downs, so there is at least some racing experience in the family.

If the main diference in the monetary side of the bid is lease payments, it would seem the real estate taxes paid by NYRA should count for something. Sure they can/will amend their offer if the court rules against their land claim.

However, it will be impossible to overcome the integrity issue, although to be fair the current management had little or nothing to do with the integrity issue to begin with so it seems unfair to punish a corporation based on its prior boards actions.

Green Mtn Punter said...

Alan, the more I think about it the more I am convinced that we've only seen the first two cards of the showdown hand for the franchise. Excelsior obviously has the best opening cards but there are still more to be dealt. The Legislature and Governor are now in the driver's seat and have all of the leverage from here on out. I think it is a pretty safe bet that all bidders will be playing heavily to the media, and will act like a typical political campaign, leaking negative info about opponents, seeking the upper hand, much as Empire has been doing since last summer. I think we can also expect some form of bidding war to break out before this thing is finally settled in a back room in Albany. Stay tuned, racing fans, this is going to get very interesting, sort of like a no-limit, all in, winner-take- all hand of Texas Hold 'Em!