02/29/2008 1:00AM

McMahon looking for prosperity


The resolution of the New York Racing Association franchise almost three weeks ago ended a long period of uncertainty for state breeders.

Their organization, known as New York Thoroughbred Breeders Inc., is headed by its president, Michael J. McMahon, who was reelected to his second term in late January.

McMahon owns McMahon Bloodstock LLC, a consulting firm with clients who race and breed Thoroughbreds in New York and several other states.

Daily Racing Form asked McMahon to comment on the current situation for New York breeders.

What did the franchise settlement mean to New York breeders?

New York breeding and racing has been subject to a terrible political process since the passage of [video lottery terminal] legislation in 2002. It has been very detrimental to the confidence of the New York horse owner and breeder. As an investor, you have to look at the market and ask, "Is this a good place to do business?" In the past decade, New York breeders, owners, and trainers have produced a greatly improved product that has supplied the horse power allowing [the New York Racing Association] to card bigger fields.

But the uncertainty around the franchise issue and lack of VLTs raised a lot of questions and allowed other states, such as Louisiana and Pennsylvania, to improve their own programs and attract investment in breeding and racing stock.

What things need to be addressed in the New York program?

From a historical standpoint, we have come a long way. The farms, and infrastructure necessary to support them, have done lots of maturing since the 1970s. The result is a better New York Thoroughbred. The state industry has gone a long way toward protecting thousands of acres of green space and employing thousands of New Yorkers. With pride, we consider ourselves the stewards of our land and industry.

Daily Racing Form columnist Alan Shuback recently wrote a disparaging report on New York racing, placing the blame for NYRA's loss of market share and customer base on restricted statebred racing. Naturally, I and many others were offended at his comments.

There is no question that the New York City and state OTB network is the drain on New York racing. In hindsight, NYRA would never allow it to be constructed the way it is. So, OTB is my biggest concern and our biggest challenge. And the breeding fund is not included in simulcast revenue, a political boondoggle that NYRA and the horsemen should correct.

What will be the impact when video lottery terminals are installed at Aqueduct?

It goes without saying that VLT revenue will be extremely helpful to New York breeders and our industry. Senate majority leader Joe Bruno did a genuinely noble thing for New York agriculture by preserving the breeding fund share of VLT revenue at 1.5 percent and opposing Gov. Eliot Spitzer's [memorandum of understanding] with NYRA, which allowed breeders 1 percent.

Future generations of New Yorkers, and indeed Saratogians, where Sen. Bruno was not popular during final negotiations will probably never realize how important this is to the 40,000 New Yorkers who work in the horse industry, as well as to the beauty of the state.

Would you comment on the large numbers of new stallions in New York for 2008?

Their owners, along with the breeding fund and NYRA, deserve credit. The fund promotes state breeding with its incentives for owners, breeders and stallion owners, and NYRA has developed an excellent series of stakes for the progeny of New York stallions.

In the early years of New York breeding, we took stallions that Kentucky did not want, but what you are noticing today is very important. Not only did stallions continue to arrive during the franchise debate, but they are objectively a much stronger group of horses and they will benefit the state breeding industry for years.

Any final comment?

Over the next 25 years, NYRA will face its biggest challenge - reinventing New York racing. There should be money to work with, from the VLTs and their initial loan, and also from an effective management of the resources which NYRA once again controls.

"Our downstate facilities are deplorable and define "customer unfriendly." I find them to be an embarrassment, and I'm not alone in that regard. A total makeover is in order, and this will at least enable us to retain our current customers and horsemen. The challenge for NYRA is to grow the fan base, and the answer is to make it fun again.