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Wednesday, April 11, 2007

Empire and NYRA Go Head-to-Head

- Excelsior and Capital Play are up today to make their franchise pitches to the panel without a name headed by Gov Spitzer's lead counsel, Richard Rifkin. On Tuesday, NYRA and Empire Racing made their presentations once again, this time with emphasis and a sense that the long process is finally coming to a conclusion. As expected, Empire pitched its plans to make Aqueduct a "world-class racing and entertainment destination" and to refurbish Belmont into "America's cathedral of racing." It repeated its intention to create an Empire Equine Economic Zone that stretches from Saratoga County to Cazenovia. [Glens Falls Post Star]

NYRA proposed no such grandiose plans, and stuck to its talking point of being the only pure non-profit play. That not only ensures that revenues will go to the state rather than shareholders, NYRA claimed, but that it doesn't have partners who could sell their shares to others after a franchise is awarded. [Newsday] That reads like a pointed swipe at Empire, which has public companies amongst their investors, two of whom, Magna and Churchill, have already established a close working relationship.

NYRA of course also stressed their long experience in conducting racing in the state. "The other bidders are rank start-ups," [NYRA Trustee James] Heffernan said. "They have no history of working together. They could change overnight." [The Saratogian]

While Rifkin warned that this was not a forum for the parties to engage in debate, the two sides did exchange barbs. Empire's CEO Jeff Perlee noted the paltry crowd at Aqueduct for the Wood as compared to the huge crowd at Santa Anita. In doing so, he took what I see as an unfair and bush league swipe at the employees of NYRA.

"First and foremost is how the place looks....No one wants to go and spend the day at a place that's falling down around them, where they're treated rudely, where they get cold food."
There are a lot of reasons why people don't go to Aqueduct, and he's probably right on his first count. But I don't know anyone who doesn't go because of rude treatment (which I have rarely, if ever experienced there) or cold food. (In fact, one of the main reasons I was able to convince the Head Chef to accompany me was the lure of the West Indian food stand.) And given Empire's early PR tactics, Perlee shouldn't talk about being rude.

Perlee also said that "We've been downtrodden for so long we've almost forgot who we are," [Rochester Democrat and Gazette] and implied that racing in other states is thriving, an assertion that Duncker refuted forcefully:
"That was an untrue statement," Duncker said, hours later during his presentation. "Racing is not flourishing through the country. We are holding more than our own against industry trends in New York." [Newsday]
As one might expect, the committee questioned Empire about the presence of out-of-state companies such as the aforementioned pair on their board.
Gary Pretlow, D-Yonkers, chairman of the Assembly Racing and Wagering Committee, expressed concern that Empire's out-of-state racetrack operators - Magna Entertainment, Churchill Downs and Woodbine - might undermine New York's simulcast product for competitive reasons.

"You might compare this to selling off ports to foreign governments," Pretlow said. Also, if Empire wins New York's franchise, its racing partners will control all but two of the country's leading tracks. Pretlow said this could become an anti trust issue.

Perlee responded that Magna and Churchill represent only about 12 percent of Empire's ownership group, which is primarily controlled by New York horsemen. [Saratogian]
Again, Empire seeks to downplay the presence of the two companies while at the same time making them one of the centerpieces of their proposal as far as marketing and issues such as coordinated post times go.

But as far as I've read, there were no questions raised about Jared Abbruzzese's dealing with Joe Bruno when he was still a director of Empire, nor regarding the group's morphing from Friends of New York. And as far as public input went, there was none at this public hearing. If you have something to say or ask, you need to write. People may submit written comments to the governor's office. Letters should be addressed to Richard Rifkin, Executive chamber, State Capitol, Albany, 12224. I'll be writing to ask why Empire's integrity is not being questioned beyond the status of their principals' tax returns and criminal backgrounds.


Green Mtn Punter said...

Alan, thanks for posting your usual informative and insightful comments on the franchise race, today's on Tuesday's Empire and NYRA presentations in Albany. At least Yonkers Rep Gary Pretlow raised one of my key concerns, and yours, about Empire, i.e., the Churchill-Magna-Woodbine triumverate as NY racing's competitors. The only way racing can survive, let alone improve, in NY- or anywhere- is through free market competition. NY is the top of the racing heap and I want to see it operated by those whose allegiance is first and foremost to NY racing, period. Am looking forward to hearing about the Excelsior presentation today and then hopefully you'll have your ear to the ground in Albany tomorrow and Friday to hear the "buzz". Do you really think we're finally in the stretch?

Anonymous said...

I'll be writing Rifkin to pls. put in an operator that will upgrade the facilities. I won't go to Aqu et al anymore because it's just too depressing. Cold, dirty, empty, lawless in way, (if gonja smoke in the clubhouse is any indication and who knows what else) and yes, depending on the teller or security guard you come in contact with they are rude and act as if they could care less about the bettors and more about their own bets. Listen, NYRA has, through mismanagement and corruption, run these places into the ground. That's under the Hayward stewardship too, so lets give another "entity" a chance. It sounds like you have an axe to grind with Empire, fine, but if they don't get rid of NYRA then I'll catch you over at the simo's at Meadowlands.

Anonymous said...

Anon -

Thanks for the note and your opinion, fair enough. I'll see you up on the 3rd floor clubhouse at the Big M if things don't work out!

Anonymous said...

I dont go to the Big A much anymore because of the weather and the traffic, neither of which will change under any new regime.

The merge of the clubhouse and grandstand doesnt help either, but that will not be changing anytime soon either.

Anonymous said...

I think it has been said before in this forum, but specific to Assemblyman Pretlow's question, Perlee is being disingenuous with his answer that CDI and MEC only have a 12% stake in Empire. It is a poorly kept secret that while they may only have a combined 12% "equity" stake, in fact they have the voting power to control what Empire would do with the NYRA signal should they get the franchise.

Maybe Pretlow knows this, and maybe that's why he raised the anti-trust issue.

Alan Mann said...

>>>I think it has been said before in this forum, but specific to Assemblyman Pretlow's question, Perlee is being disingenuous with his answer that CDI and MEC only have a 12% stake in Empire. It is a poorly kept secret that while they may only have a combined 12% "equity" stake, in fact they have the voting power to control what Empire would do with the NYRA signal should they get the franchise.

Would like to hear more specifics about thit if you're so inclined.

Anonymous said...

Is throwing out the old belmont trophy case out and getting a new one a necessary facility upgrade??

Anonymous said...

Mr. Pretlow is also likely concerned with Empire's plan to turn the domestic simulcasting over to TrackNet Media, a consortium of Churchill and Magna. This entity would have the control over 2/3 of the United States' racing handle. It's in the Empire addendum, it was mentioned by Mr. Perlee ... yet no media has written about it.

I would imagine the U.S. Department of Justice would likewise be interested ...