11/20/2014 2:13PM

Crist: Inquiries but no change at NYRA


The New York Racing Reorganization Board last week held its first public discussion of the future structure of the sport in New York. While its ultimate recommendations remain a work in progress, the board’s discussion was notable and even encouraging for what it said it is not doing: There is no attempt to sell the enterprise to a private bidder, and there will be no decision by this group on the issue of closing Aqueduct Race Track.

Those two triumphs of common sense have been a while coming, and not what the future sounded like when the state seized control of the NYRA 17 months ago.

When the previous NYRA board was strong-armed into submitting to state control in June of 2013, officials in Gov. Andrew Cuomo’s administration were saying lots of silly things about selling NYRA to the highest bidder. Madison Square Garden, the Stronach Group, and Churchill Downs Inc. were identified as surefire bidders. The Cuomo plan was to create the illusion that some sort of a SWAT team was going to come in and make the company irresistibly buyable, and then the governor would sell it for a small fortune just as his 2016 presidential campaign was getting rolling.

This idea fell as dramatically as Cuomo’s Oval Office prospects when what always happens happened: The potential suitors, and the interim NYRA board, eventually figured out that nobody is going to bid real money to own what amounts to a phantom.

If you “bought” NYRA, what would you actually be buying? What is the value of a concern whose every parameter is subject to the annual whims of state legislators? You could in theory buy the right to conduct racing at tracks owned and leased by the state, but a month after the deal closed the legislature could cut racing dates from 250 to 100, institute a pari-mutuel tax or demand that you raise the takeout to even more unacceptable levels.

There’s also the thorny little matter of a long-term deal between the state and NYRA under which NYRA gave up ownership of the land in exchange for three decades of franchise renewal and VLT revenues. While deals with the government sometimes aren’t worth the paper they’re written on, what remains of NYRA is not going to give that one up without a fight.

So a sale is not happening because there is nothing to sell and no bidders. (This is exactly what happened almost a decade ago when the franchise was put out for bid and the only interested parties were ones who wanted to run a casino.) There would, however, be many bidders for the land on which Aqueduct sits, obviously including Genting, the casino empire that runs a massive slots parlor at Aqueduct. Sell Aqueduct and run its seven months of dates at a newly winterized Belmont – easy, right?

Not so fast. Twenty years ago NYRA looked into this (during my two years of working there) and the cost to demolish and then rebuild the northward-facing grandstand, and install a new track for winter racing, was somewhere north of $600 million. Presumably the cost has gone up significantly since then. Also it would take several years, during which you would have to race year-round at Aqueduct. No wonder the board said last week it would like to make all of this the next board’s problem.

This board is currently leaning toward a future structure not entirely unlike NYRA’s original charter back in 1955: A not-for-profit entity, overseen by unpaid trustees who care deeply about New York racing, with a minimal layer of government regulatory involvement. If that is indeed the plan, the current NYRA board and management needs to start gravitating toward the benefits of such a structure instead of continuing to compete with previous years’ financial results in order to get a pat on the head from the executive branch in Albany.

What’s best for the bottom line is not always what’s best for racing. At the end of the Saratoga meet, after six weeks of preaching quality over quantity and an end to marathon cards, management tried to close some year-over-year financial gaps by adding yet more races. NYRA needs to be able to make decisions to conduct its business in the best interests of the sport – which, in the world of declining foal crops and saturated gambling markets, means less racing.

The greatest contribution that this interim board could make would be to tell management to stop chasing nickels and behave like a true not-for-profit on a mission: To present the best possible racing even if that means there’s going to be less of it.