04/12/2016 4:31PM

NYRA's early reorganization plan focuses on board makeup

Barbara D. Livingston
NYRA president Chris Kay

NEW YORK -- The reprivatization plan the New York Racing Association will submit to the state legislature next week will only deal with a governance structure for the company but will not contain any other proposals regarding the long-term future of the organization or racing.

The NYRA Reorganization Board will offer Gov. Andrew Cuomo and the state leaders two options for the re-configuration of a NYRA board when and if the state agrees to revert NYRA back to private control which it is expected to do later this year.

The first option would consist of a 15-member board that would include two members selected by the governor and one each by the Speaker of the Assembly and President of the Senate. The second option would consist of 15 private members, all selected by NYRA.  A third option to extend the current tenure of the Reorganization Board for an additional year will also be included. NYRA officials said Wednesday it expects the legislature to act on NYRA’s proposals before it adjourns in June.

The NYRA Reorganization Board was formed in 2012, when Gov. Andrew Cuomo took over control of NYRA after expressing his dissatisfaction with the way the organization was being run. At the time, it was expected the board would have a three-year existence with NYRA being returned to private control in the fall of 2015. Last April, Cuomo extended the state’s control one more year.

In discussing the board make-up at a board of directors meeting Wednesday in Manhattan, several NYRA board members said they would prefer the option that would contain four government appointees.

“I think having public members on the board is extremely important,” said Steve Duncker, a former NYRA chairman and current NYRA appointee to the Reorganization Board. “Both because the public members that we’ve had the entire 20 years I’ve been on the board have been sensational and because they also are emissaries back to the legislature and government and I think that’s an important component of the board.”

That suggestion was met with support by several other board members and NYRA will recommend to the state legislature its preference for that option.

What the reprivatization plan won’t include are proposed legislative changes NYRA has discussed at previous board meetings.

“I want to try to get a clean private control versus public control on the record and just have that as a single issue and not have the bill get held up because some members oppose this, other members oppose that,” said Michael Del Giudice, who has served as acting chairman of the board for 10 months. “So, rather than have two or three issues that could cause us problems with the main bill we decided to go up with that. If those issues get added back on while we negotiate that’s okay.”

Del Giudice rejected a proposal by Rick Violette, a trainer and president of the New York Thoroughbred Horseman’s Association, to include horsemen and breeders as bona fide voting board members. Currently, Violette and Jeff Cannizzo, head of the New York Thoroughbred Breeders, are non-voting board members.

“They have interests that are somewhat different from NYRA at different points in time so I think there’s the NYRA organization, then there is the constituency,” Del Guidice said. “It’s sort of like there was movement at one time to have union members on corporate boards; you’re not always on the same framework.”

Del Guidice added, “Expressing an opinion is one thing, but then voting their interests against NYRA interests potentially could create a conflict."

One potential issue that could create a conflict is the belief that NYRA would like to further curtail winter racing. In previous board meetings, NYRA had discussed proposing legislative changes, including one that would allow NYRA -- and not the state -- to set its own racing schedule.

At Wednesday’s meeting, Kay said that average daily handle for the first three months at Aqueduct was up $831,590, or 14.6 percent, from last year over the same period. Kay said NYRA raced 46 dates in the first quarter of 2015 versus 41 in 2014. Kay said field size was down 2.4 percent from a year ago.

“It was a good winter meet, and the new four-day format worked well,” Kay said.

Kay said the catastrophic rate of injury for the first quarter at NYRA was 1.30 per 1,000 starters compared to 2.20 during the same period last year. In 2015, the catastrophic rate of injury at NYRA track was 1.09 per 1,000 starters below the national average of 1.62.

NYRA touted the board’s successful business model since Chris Kay took over as president and CEO in July 2014. NYRA has shown modest profits -- exclusive of revenue from video lottery terminals -- in both 2014 ($1.7 million) and 2015 ($3.5 million) and projects an operation surplus of $2.3 million in 2016 and $2.8 million in 2017.

“We’ve done the job we’re supposed to do,” Del Giudice said. “The question now is now to build support in the governor’s office and the legislature.”