09/05/2013 3:38PM

Steven Crist: State making NYRA a tough sell

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People who work at the New York Racing Association understandably bristle when anyone says that the annual Saratoga meeting is essentially a foolproof operation that runs itself. When I worked there more than 15 years ago, I bristled, too, arguing how hard the employees worked and how much time and effort it took to put on the show.

The truth is that both of these arguments are correct. Everyone at the NYRA does work hard during Saratoga, but it’s still pretty hard to mess things up. Yes, there’s too much racing and particularly too much bad racing, and a host of small annoyances that customers must navigate, but the numbers year in and year out suggest that the whole proposition works pretty well regardless of who is running the place. Over the last three years, Saratoga has posted essentially the same business numbers under three entirely different management scenarios – under an entrenched and experienced management team in 2011, under a leaderless and shorthanded crew in 2012, and under a whole new board and chief executive for this year’s 40 days of sport.

The 2013 Saratoga meeting will be best remembered for two things:  extremely good racing in its biggest events, as is often the case, and almost freakishly good weather, which is rarely the case. Just as the weather finally returned to its usual poor form on closing weekend, however, the meet also ended on some unsettling notes – not on the racetrack, where stellar performances by rising stars in the juvenile ranks concluded the meet on a hopeful note, but in the boardroom, where the murky intentions of New York state, which took over the NYRA a year ago, became a bit clearer in an Aug. 28 board meeting.

Most of that meeting was devoted to an excessive video tribute to the meeting and replays of the many ceremonies and photo-ops staged by new management, but things suddenly shifted gears toward the end. The state’s representatives laid out a specific goal of making NYRA profitable without the Aqueduct racino revenues that have buoyed the game for the last two years, a prelude to a reprivatization plan that is supposed to be formulated by 2015.

Reprivatization is either the light at tunnel’s end, or an oncoming train, depending on what you think it means. The best-case scenario is one in which the state realizes it has a good thing going and that the best plan ahead is to keep NYRA a non-profit operation, putting any profits back into the game, preserving a cherished cultural institution, and continuing to support hundreds of thousands of jobs in direct and related industries. The worst involves the delusional notion of some politicians that the enterprise can be repackaged and transformed into something that can be sold to private operators.

It seems to me that we already wasted more than a decade on the latter notion, when the state did everything it could to discredit NYRA and put the franchise out to bid. For those who have already forgotten, here’s what happened: Nobody was interested in bidding unless they could operate casinos at the tracks and keep most of the profits. Those bidders professed some phony affection for the game that most people saw through from the start, and when it became obvious that there was no profitable racing enterprise to be sold, every interested bidder dropped out except one – the NYRA, which actually wanted to continue putting on the best racing and use casino profits only to improve the sport and the facilities.

Nothing has changed to make some sort of “sale” of New York racing any more viable in 2015 than it was in 2005 or 1995. The land and the possibility of doing something different with it are always going to be more valuable than anything the racing can generate. Any plan to sell New York racing is merely a long-term plan to replace it with something else.

Even if it were an attractive business proposition, which it never will be, you would be buying a phantom – something that can be transformed overnight by legislators from marginally profitable to virtually worthless. State government has repeatedly proven that even written contracts guaranteeing racing days or casino revenues can and will be changed at the whim of any incoming administration.

Still, here we go again. NYRA’s primary mission apparently is going to be cutting costs, despite finally having the revenue to make critically needed improvements, so that the state can claim it has worked its political magic and created something of value to sell. It feels like the beginning of a long and doomed charade.

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Sal Carcia More than 1 year ago
Russell, I think that Hayward did an outstanding job. I am not from New York and I don't personally know Steve or Charles. I say this because Hayward fought the Governor for the sake of horseracimg. It cost him his job in the end. Charles is a successful business man who turned around the DRF and made it a thriving business. What's the knock there? He would have done the same for the NYRA without the politics. The NYRA has been under seige ever since the slots license was up for grabs. That has been over ten years. The Guv won out. Now, the NY racing community reacts against its own, instead of recognizing what I think is the bigger picture. That is that the NYRA is under the leadership of a person who doesn't understand or care for horseracing. And it is starting to reflect in their actions. .
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Sal Carcia More than 1 year ago
Charles Hayward made a mistake in asking the NYSRWB for their opinion on how to proceed with the change. A no response from that Board was interpreted by Hayward and as a 'no go'. This is not uncommon with regulatory boards. This was a mistake that cost him his job. The NYSRWB and the Oversight Committee had responsibility and did not act here either. Only Hayward was blamed. Russell, I am only stating what I have read. There was a study and ruling on the whole incident that was performed by the State Inspector General. The IG report has been completed and never released. Why?
Sal Carcia More than 1 year ago
Many here have expressed concerns that horseracing is not run like a real business and is somehow a burden to the state. First of all, the NYRA pays statutory taxes and fees amounting to $14 million annually. This is over and above the normal taxation that most corporations including the NYRA have to pay the government. If the NYRA didn't have this double taxation, it would be profitable at the operations level.
Sal Carcia More than 1 year ago
When Charles Hayward was fired, it was interpreted in different ways. Many players felt Hayward cheated them and were glad to see him go. Much of the racing community felt the NYRA was running on its own and were hopeful for new leadership. Some saw it as nothing more than a political coup won by a person (The Governor) who knew nothing about or cared little for horseracing. The issue to me was less about Charles Hayward and more about the future of NY racing racing. Early signals from the new leadership were clearly stated in this column. It's not hard to imagine NY racing (minus Aqueduct) being turned over to private enterprises more interested in land development than horseracing. It's time for the leaders of the NY racing community to step up and save the game from such a potential bad fate.
FRED More than 1 year ago
Well written and well-timed article!
W.G. More than 1 year ago
For NYRA to become attractive to potential bidders, a big thing that needs to be done first it to build its own off-track locations: NYRA actually I believe has the right to operate its own OTBs in NYC proper, so if NYCOTB comes back, it would likely be with NYRA operating it (especially since the state runs NYRA and it would enchance the value of NYRA to any potential private buyer). OTB-Restaurant-Sports Bar combos are needed, and as mentioned in the past, I would put them in areas in or near key tourist spots (i.e.: The South Street Seaport and Times Square plus the former OTB location on 48th Street across from Rockerfeller Plaza in Manhattan), key transportation hubs (i.e.: Penn Station, the old OTB location on Park Place near the Fulton Transportaton Center and the Atlantic Terminal in Brooklyn) and where OTBs were highly successful before (i.e.: The two in Chinatown (Manhattan) on Walker/Lafayette Streets and Chatam Square, the former of the two also next to a big subway hub at Canal Street). Those would be where I would target such places first, as that would be a gigantic step towards making NYRA attractive to a private outfit. That is only one thing that needs to change with NYRA, but this is probably the most important of them.
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W.G. More than 1 year ago
Russell: The kind of OTB-Restraunt-Sports Bar combo places I'm taking about would be WAY different from the obsolete parlors that closed in 2010. While yes, many like to bet by phone, there are still those who like to be "out and about." Also, the kind of places I'm talking about would have racing and sports integrated together in ways the old OTBs never could. That's why I go for areas like the South Street Seaport (where as it is NYRA should have a simulcast location anyway) as well as Times Square and Rockerfeller Plaza for the tourists. Keep in mind as well, some people in New Jersey can only have phone accounts through 4NJBets (which has not exactly had favorable opinions), and one of the locations I noted (Park Place near the Fulton Transportation hub) would actually be as much as luring those who live in New Jersey and can get over on the PATH train (a 10-15 minute ride from Jersey City, and in fact, I'd also be looking for an OTB-Restraunt-Sports-Bar combo in the Meatpacking District/West Village near the Christopher Street PATH Station, the first stop on PATH trains coming from Hoboken to get some of those people as well). The key is to make these places attractive to non-racing fans looking to come in and get a good meal and not be ripped off as well as being able to see a multitude of sporting events, also being able to stay open after racing ends late at night (especially on Friday and Saturday) and luring those looking at being out late. This could never happen in the old OTB setup.
Nick Arden More than 1 year ago
I agree with Russell, the OTB ship has sailed.
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Anonymous More than 1 year ago
what does this have to do nyra????
marc More than 1 year ago
Gural pays $1 a year to lease the Meadowlands
richard cowles More than 1 year ago
Now we have a new word...Bristle.Great job. Remember........Bristle
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Perl More than 1 year ago
Before you rag on Aqueduct, you should visit Suffolk Downs.
BigAfan More than 1 year ago
Don't know why people knock Aqueduct.Since the casino opened it has improved.The facility is clean ,its very easy to get to,and if you go into the casino there are great places to eat,and its free admission .
chad mc rory More than 1 year ago
And what does all that have to do with Horse Racing?
EdwardStanco More than 1 year ago
Be careful about knocking the Aqueduct neighborhood. The people that live there are passionate supporters of our industry. And here is a little secret - many of those fans had The Princess in the Ky Oaks.
Sal Carcia More than 1 year ago
Steve, you could have wrote this when they fired Charles Hayward. I mean at least it was a predictable outcome. The Governor needed to take control of the NYRA so he could clear the way to execute his grand casino scheme. Last thing he needed was to have a strong advocate for horseracing to get in the way. Nobody dare get in the way now. Your prediction from this point is also obvious. I keep thinking of Frank Stronach looking around Saratoga and saying he saw a lot of empty space that could be used for other purposes. The words Village at Saratoga come to mind. And if it's not Saratoga, then it will be Belmont. Even Chris Kay is thinking this way about Belmont. But, most of all, I continue to be disappointed with the NY racing community as they continue to stand by and let this all take place without a peep.
richard cowles More than 1 year ago
He wont reply...you mentioned hayward.Yep he has a crystal ball
Sal Carcia More than 1 year ago
Richard, this column is nothing more than a reflection on what was said in the last NYRA board meeting. It doesn't have to come true, but the fact that they are talking about no slots revenues and selling off the franchise does raise concerns.