05/25/2010 11:00PM

Hayward seeing sliver of daylight

Email

The headlines have been brutal.

"Hayward Faced With Crisis" ...

"CEO Hayward Under Siege" ...

"Hayward's Blunders Mount" ...

So I put in a call to Charlie Hayward, president and CEO of the New York Racing Association, to see how he was holding up.

"Wrong Hayward," Hayward said.

He was right, of course. My bad. The Hayward in those headlines was Tony, from a distant English branch of the family, who is CEO of British Petroleum and therefore hip deep in the mess his company is making along the Louisiana coastline in the Gulf of Mexico, where an undersea reservoir of oil has been spewing crude for more than a month thanks to a BP pipeline disaster.

Tony H. might trade jobs with Charlie H. right now if you asked him, especially now that NYRA has been given some fiscal breathing room with a $25 million line of credit from the state of New York.

"Things are certainly a little bit better than they were a few days ago," Hayward said Wednesday from his Belmont Park office.

The $25 million covers the $17 million owed NYRA by New York OTB, which basically has become a ward of the state. The government also was obligated to offset negative operating expenses for NYRA until an operator of the pending Aqueduct slot machine franchise is selected, a process now in the hands of the state lottery commission.

NYRA was due for a break. After emerging from bankruptcy proceedings in September 2008, NYRA soon found itself in another financial limbo when budget projections for 2010 came up bleeding red. Through the prism provided by the unique world of New York media, it appeared as if the funding finally came through because Hayward was able to successfully deploy rhetoric laced with dire warnings of doom. The Belmont Stakes could have been canceled. The Saratoga meet was in jeopardy. It would be the end of the racing world as we know it.

"I told a reporter that we'd run out of cash somewhere between June and July," Hayward explained. "By law, if we can't make payroll, we have to shut the company down. That got written as 'Hayward Takes Belmont Hostage.' But we weren't putting a gun to anyone's head. We weren't using brinksmanship. And the state never denied that they didn't have that obligation."

Okay, fine. But Hayward has been a New York guy long enough to know that a cool, reasoned public debate on the merits of an issue rarely grabs a headline.

"Right," he conceded. "And often times it doesn't get things done, either. But I wasn't bluffing. The information was out there."

While the $25 million will allow NYRA to operate into next year,

Hayward is quick to warn that his racing world is anything but rosy. The hole, as it were, is far from plugged.

New York's purse supremacy was already being challenged by the slot machine subsidies provided to the racetracks of Pennsylvania and Delaware. Now Monmouth Park has opened its meet just down the turnpike with its compressed three-day racing week and average purse offerings of around $1 million for 50 days.

"I'm thrilled that Monmouth's first two days went really well, and they're calling it the 'Elite Meet,' " Hayward said. "But on opening day last Saturday, the first three races were a maiden $50,000 claimer, a $5,000 claimer, and a $25,000 claimer."

New York, after all these years as the jewel in the crown, is heading the same direction.

"We've never had cheaper races than we had at Aqueduct during the winter, and relatively cheaper races even here at Belmont," Hayward pointed out. "And it's the quality of the racing, and most particularly the field size, that drives our handle, which ultimately drives the purses and drives profitability for the track.

"I don't think the industry has, collectively, really done any analytics on the number of owners that have left the game, and the number of horses that would represent," Hayward added. "California has had a horse shortage for a number of years, but I think now you are going to see that same thing magnified here in the East for the first time."

Even so, racing's leadership in California looks upon New York with a degree of envy. Out West, a solid 75 percent of the racing dates in both Northern and Southern California are operated by public companies -- either the Canadian-based MI Developments or Stockbridge Capital Group of New York -- with mandated agendas that put the interests of investors first and foremost. Such a climate encourages very little sympathy from state legislators and regulators.

"They don't want or need my advice, but I think the big concern out there is going to be Frank Stronach," Hayward said, referring to the chairman of MI Developments, which owns Santa Anita and Golden Gate Fields. "Losing Ron Charles as president of Santa Anita was really unfortunate, but I'm surprised he lasted as long as he did, to be honest.

"It's pretty clear the way to get things done nationally is through the non-profits," Hayward noted, putting Keeneland, Del Mar, and the Oak Tree Racing Association in the same category as NYRA. "They don't have the same constraints a public company does. We've had to be on the sidelines recently, but now I hope we'll be able to be a player in some constructive initiatives.

"It's still pretty dysfunctional here in New York," Hayward added. "We're in the sewer wars, but we got a little reprieve, so things are pretty good for the moment."