NYRA approved for 25-year renewal of NY's Big 3 tracks

[Glimmerglass]

[Updated March 8 2007 - After what had been a reviewed and committee supported bid from Excelsior was expected to get the nod from the new Governor didn’t all heck has broken lose - see below]

After rejecting the $19 million in bailout money from NY State and having been severly wounded by the delays with the VLT (Virtual Lottery Terminals) at Aqueduct - and most importantly also organizational corruption, waste, fraud and mismanagement - the New York Racing Association (NYRA) has filed for bankruptcy.

CBS News/DRF 11/2/06 “NYRA declares bankruptcy”

“Chapter 11 bankruptcy does not mean going out of business,” said Charles Hayward, the president of NYRA, in a statement. “In fact, it is a constructive process that allows NYRA the opportunity to achieve financial reorganization while continuing to conduct world-class Thoroughbred racing without interruption.”

NYRA officials were scheduled to appear in bankruptcy court on Friday, according to Bill Nader, a NYRA senior vice president. At the hearing, NYRA will seek a ruling for a “debtor in possession,” which would allow the association to seek a loan from financial markets to cover its current obligations. Nader said he did not know the size of the loan that NYRA would be seeking, but said it was in the seven-figure range.

NYRA officials have contended for two months that the association would file for bankruptcy if the state did not approve either its plans for a casino at Aqueduct or the release of $19 million remaining from a $30 million state loan package. Earlier this week, a state oversight committee offered to release the loan but attached conditions that NYRA officials said were unsatisfactory.

Too many years of folks dipping into the cookie jar and running it like a club to the detrement of the sport itself.

[Linny]

Don’t dismiss Excelsior Racing Associates. They are a more unified organization with far more political clout. They are often referred to as “Steinbrenner’s Group” but they are said to incorporate some other very powerful interests.
Empire is claiming to speak for the interests of the horsemen when in fact many prominent horsemen do NOT support them. The NY Thoroughbred Horsemen’s Association is backing Empire but the members of that group , to a great extent do not.

[Glimmerglass]

Linny, agreed Excelsior Racing Associations has a decent shot at it, although I wouldn’t as per say call any horsemen’s objections to Empire being an auto bid for the Excelsior camp. A lot of the grumbling has come from the actions of the NYTHA board without complete consultation of members, which is not uncommon.

DRF October 13, 2006

In March, NYTHA’s 11-member board of directors agreed to support Empire, and NYTHA received a 3 percent equity stake in the company and two seats on Empire’s board. The NYTHA board - which represents approximately 6,000 members - said it was a unanimous decision, but one board member, Gary Contessa, has since joined Excelsior Racing Associates, another group in the running for the franchise.

Interesting how the grading of the three bids (NYRA is a bidder too, the Aussie group was DQ’d) will be done …

The committee is grading each firm’s bid on a weighted scoring system, but [leading NY gubenetorial candidate Eliot Spitzer] recently criticized how the request for proposals was written. Each firm’s business plan - how they expect to conduct racing – counts for 50 percent of their grade. Other criteria such as integrity (20 percent) count for less.

Spitzer said integrity should be a prerequisite, not a consideration.
Source: Saratogian 10-24-06

[Linny]

The comments on NYTHA were meant as an illustration of disunity at Empire. The concern I have with Empire is that with so many members of such power (Churchill, Magna etc) that there are far too many disparate agendas. Add the horsemen and the VLT partners and you really have a coat of many colors.
As for “integrity” vs. business plan: A business plan can be assessed using accounting and legal analysis. Integrity is of course vital but a bit harder to quantify. If “integrity” were valued higher as a percentage too much would be based on an intangible. Besides, if you have “less than honest” folks with a good business paln, you can use the legal system to keep them in line. OTOH, really honest folks with a poor business plan are guaranteed to fail.

[Glimmerglass]

The Times Union brings up a very interesting point regarding the filing - the rights to the land underneath the tracks themselves. NYRA has for years been claiming it came with the creation of NYRA back in 1955 - NY State has said otherwise. With the Chapter 11 filing that will need to be determined:

Source: Albany Times Union 11/3/06

NYRA’s bankruptcy filing comes as it attempts to extend its franchise to run horse races at Aqueduct, Belmont and Saratoga thoroughbred tracks, and the move could disrupt a bidding process.

NYRA listed more than 130 creditors and debts and assets both at $153 million, although the documents point to deeper liabilities. NYRA noted it owns the three tracks and the properties they could be sold for more than $1 billion.

The filing should get a federal judge to rule on the controversial issue of who owns the tracks the state or NYRA, said NYRA’s lawyer Brian Rosen. If the court rules the tracks belong to NYRA, it could borrow against the property or sell it.

NYRA faces competition for the first time since it took control of the tracks in 1955. A state panel is close to recommending a bidder among NYRA and two other groups.

Racing professionals and NYRA insiders say the Chapter 11 filing could entangle the franchise issue for years.

“This is a huge story,” said Bennett Liebman, a racing law expert at Albany Law School. The contentious struggle between state government and NYRA may only get fiercer and more protracted, he said.

And NYRA could tie up the franchise contest if it is the property owner.

God forbid if a real shark was to get into what would be say the equal of a bond holder and then go after the real crown jewels - the track properties! It really could get exceptionally ugly. NYRA had already toyed with the idea of selling off chunks of Belmont to raise cash.

[Glimmerglass]

Ad Hoc Committee on the Future of Racing gives NYRA the boot after 51 years (52 at the end of 2007) of running the racing three track franchinse and endorced Excelsior Racing Associates to get the rights for the next 20 years. The latter is not the “horse” I would’ve backed, but what do I know

Excelsior Racing Associates Chosen for New York Franchise
by Tom Precious - The BoodHorse
11/21/2006

Excelsior Racing Associates has been selected by a state government committee in New York to be the next holder of the franchise to run racing at Aqueduct, Belmont and Saratoga racetracks.

The non-binding decision by the Ad Hoc Committee on the Future of Racing recommended to the governor and state lawmakers that Excelsior get the franchise over the New York Racing Association, which placed a distant third in the scoring system by the panel. Empire Racing Associates, whose partners include New York horsemen, Magna Entertainment and Churchill Downs, scored second behind Excelsior.

The recommended winner is a partnership that includes New York Yankees partner Steve Swindal and casino developer Richard Fields.

The vote by the ad hoc committee came Nov. 21 during an all-day meeting in Saratoga Springs. Details were not immediately available on the vote.

The scoring by the committee was based on two main options: the current franchise with a video lottery terminal casino permitted at Aqueduct, and, adding a casino also at Belmont.

In the first option, Excelsior scored a 94.6 to Empire’s 93. NYRA trailed with a 76.5 score. In the second option, Excelsior scored a 97 compared to Empire’s 92.75. NYRA came in third with a 76.5 score.

"While the committee will be releasing its full report in the coming weeks, the Ad Hoc Committee on the Future of Racing has today voted to recommend that Excelsior Racing Associates be awarded the State’s racing franchise when the current franchise expires at the end of 2007. The committee’s informed recommendation is the culmination of months of hard work and we would expect that the governor and legislature will give it the weight it deserves,’’ said Scott Reif, a spokesman for the committee.

The decision by the committee is non-binding on the Legislature and governor. Its fate is made more uncertain by the fact that the governor who created the panel – George Pataki – is leaving office December 31. That has created questions whether his successor, Attorney General Eliot Spitzer, will accept the committee’s work or look to re-start the entire process. Earlier this year, Spitzer raised questions about the criteria established to score bids.

NYRA has run Thoroughbred racing in New York since 1955.

Excelsior said it would pay New York state $100 million up front and another $7.5 million over the 20 year life of the franchise.

"We are extremely pleased with today’s outcome. Today is the beginning of a new era in New York horse racing. For the past several years, New York fans and taxpayers have been waiting for the transparency, accountability, and racing integrity they deserve. Excelsior is happy to announce that the wait is almost over,’’ Swindal said in a written statement. “We have a considerable amount of work to do in the coming weeks and months, but are confident in our team’s expertise and ability to deliver the very best racing experience in the world to our fans. We appreciate the hard work that the Committee has invested in the evaluation process, and look forward to working with New Yorkers and their elected officials to return our state to its rightful spot atop the world of Thoroughbred racing.”

Bennett Liebman, head of a racing think tank at Albany Law School, said the non-binding recommendation "certainly boosts Excelsior into the lead for the NYRA franchise, and especially because Excelsior seems to have the most significant support from the legislative members of the committee.’’ Beyond the legislative support, one Excelsior partner – Fields – has close political ties to Spitzer, the incoming governor.

The committee includes members appointed by Pataki and the leaders of the state Senate and Assembly.

With a new governor taking office Jan. 1, most observers believe there is little chance the issue will be resolved this year, though there has been much speculation that anything is possible when it comes to racing at the state Capitol. "It’s hard to believe it’s going to get decided this year. There’s just too much involved in the process,’’ Liebman said.

Excelsior’s other partners include Tishman Speyer Properties, a leading real estate developer in New York City. Jerry Bilinski, a former state racing commission chairman and close ally of Senate Majority Leader Joseph Bruno, as well as Hall of Fame jockey Jerry Bailey are also with Excelsior.

NYRA officials sought to put a confident spin on the decision.

"Today’s announcement by the Ad Hoc Committee on Racing is simply a recommendation and one step in a process that involves the State Assembly, the State Senate, the Governor, and the Racing and Wagering Board,’’ said NYRA President Charles Hayward.

"We are certain that state officials will study the bids submitted and seek independent verification of any franchise candidate’s suitability to conduct racing in New York before any final recommendation or action is taken. When all the facts are evaluated, we are confident NYRA will be the obvious choice to continue to produce the best thoroughbred racing in the United States,’’ Hayward added.

[vineyridge]

Dear Lord, what a mess!

This will drag on in the courts for the rest of most of our lives.

[Glimmerglass]

The Saratogian 11-22-06 “Excelsior in lead to run N.Y. tracks”

excerpt

… strong words from Marylou Whitney, a prominent Saratoga Springs horse owner who has been backing the Empire Racing Associates.

‘As difficult as it is to say, I would prefer the New York Racing Association over the one suggested today,’ said Whitney, who has had a strained relationship NYRA. ‘New York racing is in a major crisis right now. We cannot afford to place our Saratoga jewel in inexperienced hands. I know many will choose to race elsewhere, myself included.’

The Excelsior team attempted to deflect such criticism Monday.

‘I think what the committee understood was our commitment to hire the best executives out there who can work with our management team,’ a spokesman said. Just like the Yankees, Excelsior will go after the best talent possible, he said.

Not sure if I’d pull out the Yankee comparisons - a lot of talent bought, but where are those championships? If anything they can prove top talent doesn’t always work well as a team.

[Linny]

Trust me. I know several of the people behind Excelsior and they are not rookies. Many of the NY horsemen are behind them, supporting them. Just because the NY Tb Horsemen’s Assn officially backed Empire doesn’t mean all the membership did. Most of the prominent NY trainers, those with names known outside the racing world, supported Excelsior.

[Glimmerglass]

If the courts rule that any merit exists with NYRA owning the land then all bets are off as to who will control the future of racing in NY. The point of NYRA having paid property taxes on the three race courses since 1955 is a fairly compelling point.

NY Post 12-14-06 “NYRA Sues State Over Its Tracks”

The suit alleges that these officials and government agencies have conspired “to take ownership of the racetracks without paying compensation to NYRA and, by systematically impairing NYRA’s finances in furtherance of this scheme, defendants have driven NYRA into bankruptcy.”

In a separate motion, NYRA, which says it will run out of money by the middle of January, asked the bankruptcy court for authorization to receive a $50 million loan from the hedge fund GE Capital.

Interestingly the GE Capital local is secured by the three track properties. So technically if NYRA defaulted on the loans then it would be a battle between NY and GE. I’d put my money on the boys from Fairfield

[Glimmerglass]

New York State by the way loaned NYRA the bailout money in Feb to cover payroll, etc and thus booted out GE Capital from what would’ve been a highly ugly debate over title ownership of the track lands themselves That trump card still exists in the NYRA deck and legal experts think it will assure them of a key role no matter how much the State might not like them.

Albany Times Union Mar 8, 2007 “Racing franchise gets new bidders”

A major Las Vegas casino visionary and Catskill Regional Off-Track Betting Corp. have joined in the race to take over operation of the Saratoga, Belmont and Aqueduct racetracks.

A total of six bidders notified the state by Tuesday’s deadline that they are interested in capturing the state racing franchise, Gov. Eliot Spitzer’s office revealed Wednesday.

Besides Catskill OTB, one other new face joined four bidders that surfaced in the fall – Thoroughbred Racing-NY, led by Las Vegas casino developer Steve Wynn. Wynn’s spokeswoman said his company, Wynn Resorts, wants to manage casino operations at Aqueduct and is putting together a group that includes Steven Roth, who is CEO of Vornado Realty and ranked by Forbes as one of the 400 richest Americans.

Wynn has founded some of the nation’s biggest commercial casinos, including the Mirage and the Bellagio in Las Vegas.

Catskill OTB President Donald Groth said his pitch will call for the state to create a new public benefit corporation to run the tracks.

“That’s the only way for the people of the state of New York to share in the profits and to protect county governments that get revenues they have come to count on from off-track betting,” he said.

Catskill OTB collects $145 million in bets a year and has been honored for being among the most efficient, based on rate of return to its 10 counties. It is based in Pomona, Rockland County.

Groth said the Ad Hoc Committee on the Future of Racing, which last year reviewed franchise bids, would not accept one from an OTB. A new panel created by Spitzer made no limitations.

Bidders will present their proposals for the racing franchise publicly later this month.

The field also includes three bidders reviewed by the Ad Hoc Committee: Excelsior Racing Associates, the committee’s preferred bidder; Empire Racing Associates of Saratoga Springs; and the New York Racing Association, the nonprofit business that has run the tracks since 1955. NYRA’s franchise expires at the end of this year.

CapitalPlay, an Australian gaming company disqualified by the committee on a technicality, is also bidding.

“The fact that additional companies have come forward demonstrates the great appeal and potential of thoroughbred racing in New York,” Spitzer said.

[Glimmerglass]

Mike Veitch of The Saratogian says it best in his column on the on-going woes of this bidding process:

Do you think this pair [Steve Wynn and Aussie bidder ‘Capital Play’] hungers to improve racing with their knowledge of the Belmont, Metropolitan Mile, Jockey Club Gold Cup, Alabama, and Travers? Neither do I.

Do you think they are interested in enhancing the thoroughbred industry in Saratoga County, anxious to improve the Oklahoma Training Track, and eager to build upon the charitable work of our summer guests? Ditto.

Instead, it appears the Spitzer plan involves a bidding war for control of New York’s historic tracks. Wynn and Capital Play have the most money, and they are going to lay it on the next few weeks in the hopes of getting a piece of the expected VLT expansion in New York.

Both entities did not take part in the Ad Hoc process, while NYRA, Excelsior Racing and Empire Racing played by the rules and answered its Request for Proposal. But in New York, a rule is a sometime thing.

Saratogian, March 10, 2007 “Governor’s plan could start a war for tracks”

It is exceedingly disappointing that the preservation, promotion and nuturing of racing in NY is potentially going to be thrown to the wolves who are only interested in stocking up all three tracks with VLTs (Virtual Lottery Terminals) - and little focus on the horses or horse racing.

It really does make one wish things were back to what they used to be: legal gambling was - Las Vegas, Atlantic City, race tracks, dog tracks, and the state lottery. That was it.

[Glimmerglass]

… and then there were five. The man who was

• raised in “once” uber corrupt Utica, New York, but actually went to high school outside of Syracuse
• the inspiration for [the remake] movie’s Ocean’s 11 and Ocean’s 12
• the man who devalued his own Picasso painting by $40 million
• who owns one of the exceedingly rare but only purported Vermeer paintings in the world - has pulled out!

BloodHorse 3-23-07 “Wynn-Led Group Out of New York Franchise Race”

[Glimmerglass]

The scorecard today:

In addition to Wynn pulling out

Catskill OTB we hardly knew ya … but they’re too gone from the bid

Capital Play, the Aussies, really don’t have a shot at this so you could almost write them off

NYRA the incumbents by holding possible legit claims to the track lands themselves will likely be part of this awarded deal in some capacity, if not out right awarded it

Empire Racing Associates with partners of Woodbine, Magna and some leading NYS horsemen still have a horse with legs in this race

Excelsior Racing team was thrown a curve this week with their lead partner Steve Swindal, all along backed by his father-in-law’s might: George Steinbrenner, was served with divorce papers from Jennifer. Accordingly he will be [forced to] part ways with the Yankees organization. All this adds up to vastly dimished strength by Swindal to the Excelsior team. As said best by the long time spokesperson for “The Boss”, Howard Rubenstein:

Asked whether Steve Swindal was still considered part of the Steinbrenner family, Rubenstein responded, “She’s divorcing him,” referring to Jenny and Steve Swindal, respectively.

Photo of Steve and Jen, such a happy couple together - not sure whats going on with the cat-like clawing mixed with the Chanel sunglasses

One has to think if you make daughter of The Boss unhappy he’ll use a bit of that might to ensure riches are not comming Steve’s way. While originally getting the nod by the Ad-Hoc committee for taking over the franchise this news with Swindal couldn’t come at a worse time.

Predictions: NYRA gets the franchise in concert with Empire Racing through some forced partnership by the State leaders.

Stay tuned

[Glimmerglass]

As expected, kiss Excelsior goodbye from have a legit shot at this one …

Saratogian/Associated Press 4/1/07 “Steinbrenners abandon Excelsior”

“The Steinbrenner family and all of their related entities will withdraw from the Excelsior bid,” said family spokesman Howard Rubenstein. “The reason is to pursue other opportunities. We wish them (Excelsior) good luck. At the same time, Tishman Speyer will withdraw from the bidding.”

They have no shot in heck in geting this now. No political capital, no economic might, and a black eye.

As cited before it comes down to Empire and NYRA taking this one and again I think it will be blend of both.

[Glimmerglass]

Equidaily.com has done a great job tracking this race as it approaches the finish line. Just to give folks a quick 4-1-1 on the recent changes …

• Today [April 10th] oral presentations are to be given by NYRA and Empire; Wednesday presentations will be for Capital Play and Excelsior Racing Associates.

• Marylou Whitney has dropped from a 4% stake to well under 2% for the Empire Racing group. Not because she is less interested but rather financial disclosure would be required of anyone with a 2.5% stake or higher. Ms. Whitney’s fortune - last published in the early 1990’s at around $100 million upon her husband’s death - would expose records to too much public scrutany and require a lengthy audit. Neither is desirable.

The upside is the 2.7 % share Marylou gave up will go to:

Backstretch Employees Services Team, a group dedicated to helping backstretch workers with everything from proper medical care to improved living conditions.

• On again, off again, Steve Wynn is back bolstering the Excelsior Racing Associates bid; he joins as a partner in that sagging bidder. A last minute join days before the oral presentation might be too little, too late

Again NYRA looks to be in the driver’s seat with so many recent changes and the all important land-ownership dispute

[Glimmerglass]

Did anyone see the presentation remarks by Australia’s bidder - Capital Play - to the panel overseeing the bid award? Yikes! I really think they don’t get it:

Glens Falls (NY) The Post Star 4-12-07 “Bidders ask for trust with state racing franchise”

excerpt

Capital Play began its presentation with a video montage containing old film clips featuring races at Belmont and Saratoga set to the music of U2 and Bad Company. Capital Play President Karl O’Farrell emphasized that racing is growing internationally, while attendance at thoroughbred tracks in the United States is declining. The group faulted NYRA, the holders of the state franchise since 1955, for not marketing the sport.

Capital Play’s Jim Colquhoun said he attended a recent stakes race at Aqueduct where up to 8,000 people attended.

“Only 7,000 to 8,000 people? That’s crazy,” he said.

The recent Melbourne Cup was watched internationally by 700 million people, O’Farrell said.

Capital Play has no plans to implement slot machines at Saratoga Race Course, but would like to introduce slots to Aqueduct and Belmont.

“We’ve allocated $50 million (for Saratoga),” O’Farrell said. “The people of Saratoga and the stakeholders in Saratoga can say how best to spend that.”

O’Farrell said he would love to install “a beautiful fence” around the oldest track in the country.

Is that fence to keep the unwashed masses of Saratoga Springs out? While not quite Greenwich, CT the surrounding area to the track actually contains some of the nicer archiecture, grand homes and during August the wealthier residents in the small city. Maybe he thinks the Yaddo estate is riff-raff?

As for comparing the small crowds found during a week-day or even weekend featuring a graded stakes race at Aqueduct in April to the top race in Australia in the warm summer - is he nuts? Apples and Oranges.

[Glimmerglass]

Rather sad the suggested ideas for the future of the New York tracks …

Saratogian 5-18-07 "Idea calls for Aqueduct closure, Saratoga, Belmont run separate "

Excerpts:

1 - Closing of the Big-A

“To me that’s a bad idea,” Knowlton said of the concept in the Bloodhorse report. Pheffer added, “I’m going to fight like hell to keep Aqueduct open.”

She said that a majority of Queens residents want racing to continue there.

“I don’t know what the governor’s motivations are in all of this,” Pretlow said. “We need winter racing in New York to keep the dominance that we have.”

If Aqueduct closes, its nearly 550 horses and track workers would have to find room at Belmont, whose track would have to be winterized, most likely with a polytrack surface. The facility itself isn’t heated, another huge undertaking, and unlike Aqueduct there’s no subway service.

2 - NYRA keeping Saratoga and Belmont (with the Video Lottery Terminals pushed for it) going to another bidder:

A report Thursday … said that officials might be considering a plan to let the New York Racing Association keep Saratoga and have another firm run Belmont, effectively splitting the franchise

There are bad ideas and very bad ideas … this one goes to new lengths in getting worse

[Glimmerglass]

An odd update and certianly a new player who if they were to get this franchise it would be over my dead body!

Times Union July 16, 2007 “Tribal casino in bid for state racing deal”

Mohegan Sun has joined Capital Play’s bid to take over the racing franchise in New York, officials with the bidding group confirmed this morning.

The giant gambling operator would be the casino partner and run a proposed racino at Aqueduct and potentially another at Belmont if the state approves one there, said Karl O’Farrell, the leader of Capital Play, which is based in Australia.

NY State has far more then enough problems with Native American tribes and casinos in my view adding this just becomes fuel on the fire.

[Texarkana]

[QUOTE=Glimmerglass;2565490]
An odd update and certianly a new player who if they were to get this franchise it would be over my dead body!

Times Union July 16, 2007 “Tribal casino in bid for state racing deal”

NY State has far more then enough problems with Native American tribes and casinos in my view adding this just becomes fuel on the fire.[/QUOTE]

That would not be good. :no: