NY's ERA

[Observer]

ERA (http://news.bloodhorse.com/viewstory.asp?id=32469)

[Indulto]

N.Y. horsemen support new franchise bidders By MATT HEGARTY 03/07/2006
http://www.drf.com/news/article/72658.html (http://www.drf.com/news/article/72658.html)

‘. . . Although details were not announced, the horsemen received a 3 percent equity stake in the company and two seats on Empire's board, according to a confidential offering memorandum that was sent to potential investors, a copy of which was obtained by Daily Racing Form. In return, the offering said, Empire will be the "sole and exclusive vehicle" for the horsemen's lobbying efforts and any bid for the franchise.’

‘. . . According to the offering, Empire will lobby for a business model that is nearly identical to that recommended by Friends of New York Racing, the racing advocacy group headed by Tim Smith that plans to dissolve this month after the release of a model racing law.

"We are not affiliated with FNYR, but we believe the proposals of FNYR point the way to making Thoroughbred horse racing in New York a world-class industry," the offering said.’

‘. . . The $3 million in start-up funds is a far cry from the amount that Empire would need for a competitive franchise bid, according to the group's own estimate. In the offering, Empire estimated that it would need to raise "between $500 million and $1 billion" to bid on the franchise and that "substantial additional capital will be needed to capitalize the business."’

‘. . . The offering lists a minimum investment of $25,000 and a cap of $250,000.’

[cj]

As a bettor, I can't think of a much worse situation than having the horsemen control the racing.

[Indulto]

CJ,

Why shouldn't bettors want horsemen to have a stake in track operations? Isn't the current NYRA board predominantly made up of wealthy owners?

[cj]

I don't know who makes up NYRA to be honest, not something I care very much about. It just seems to me that the guys trying to win purses shouldn't be the ones controlling the distribution of the purses.

[PaceAdvantage]

Didn't the 'horsemen as track owner' experiment fail already somewhere else? Was it California? What were the reasons it didn't work out? Anyone familiar with that bit o' history?

[GaryG]

Didn't the 'horsemen as track owner' experiment fail already somewhere else? Was it California? What were the reasons it didn't work out? Anyone familiar with that bit o' history?Marje Everett (daughter of Arlington's Ben Lindheimer) bought Hollypark and ran it for several years in the 70s and 80s I think. Later the same situation with RD Hubbard. The current Arlington owner is also a horse owner.

[PaceAdvantage]

Many "singular" track owners are also horse owners. I was referring to a coalition or group of horsemen, like the proposed group in this news item.

[Rico8812]

I find it funny that the only trainer involved has been caught cheating like 4 times. And the vice-chairman of NYCOTB. I'm sure he has tons of ideas on how to fix racing in NY.

Richard Bomze is probably the biggest idiot involved in NY racing. I hope this group fails miserably.

[Indulto]

R8,
Interesting perspective.

This group claims support for the FNYR position (and includes at least 4 individuals who participated there) that OTBs should be run by the franchise holder. Is there any reason to think the NYCOTB vice-chairman would not be helpful in bringing that about?

Who do you think should be involved in such a group that would give it greater legitimacy – Pataki political appointees, NYRA board members, NTRA Player Panel members, trade press columnists?

I personally have reservations about FNYR’s position on slots at Belmont as well as Aqueduct. People who prefer slots to racing would still have the Big A to go to for simulcasts as well without turning Belmont into the Atlantic City boardwalk.

IMO the keys to success for New York racing are
1) Proper Simulcast signal pricing
2) Merging OTBs with the franchise.
3) Maintaining the high quality product, settings, and traditions that make racing at Saratoga and Belmont the most attractive on the continent
4) Always offering the lowest takeout nationally.

I finally lost confidence in the NYRA with it’s shortsighted maneuver to divorce itself from the triple-crown televising and bonus arrangement for short-term financial benefit. How hard is it to grasp the concept that Churchill Downs and Pimlico are in the driver’s seat and there’s no getting around it (you don’t have a TC candidate until those races are won by the same horse)?

I guess we'll have to settle for a Wood-Belmont bonus.

[Rico8812]

I"m pretty sure NYRA had nothing to do with the elimination of the Triple Crown bonus. Visa pulled out, and Triple Crown productions is a separate entity. They're in charge of finding a sponsor.

As for the TV deal, Churchill i believe was getting 50% of the revenues, and Pim and Bel, 25%. Now when there is a TC on the line, the ratings for the Belmont skyrocket higher than the Derby ratings.

NYRA just cashed in on their ratings bonanza after the 5 triple crown attempts. Sounds like a good business decision if you ask me.

[TravisVOX]

VISA stopped at 10 years...simple as that. ESPN/ABC will slowly take over racing coverage, NBC didn't put the effort in...

[Indulto]

I was under the impression that Visa declined to continue after the TV deal wasn't renewed because their sponsorship arrangement was with NBC, but if the TV deal was up for renewal, why not just negotiate a larger share when there is a TC attempt?

If there had been such a negotiation and CDI refused to budge, and there was no bonus contingent upon that agreement, then I stand corrected.

Can anybody explain the economic advantage of moving TV coverage to cable if ABC was was willing to pay a premium for the Belmont? I can understand the 4-hour BC is overkill for new fan recruitment, but were the ratings as low for the Classic as for the rest of the card?

[Indulto]

THE INSIDE TRACK by Paul Moran
http://www.newsday.com/mynews/ny-intk084654433mar08,0,7045474.story (http://www.newsday.com/mynews/ny-intk084654433mar08,0,7045474.story)

'. . . "Operating racing in New York is about protecting jobs, green space and the historic character of the New York tracks," said Charles Reiss, a longtime owner of thoroughbreds who was one of those named to the board of the new group, Empire Racing Associates.

. . . Jeff Perlee, former state lottery director, has been named chief executive officer of what is essentially a privately funded initiative that will formally begin operations on March 9 with offices in Manhattan and Saratoga Springs.'

Exactly who "named" these individuals?

[Rico8812]

Nice letter posted on NYRA.com by Barry Ostrander, President of the NY Breeders. Basically says they in no way support the NYTHA's ERA.

ERA has no chance to succeed, especially with Richard Bomze at the helm.

[Figman]

Indulto,
Jeff Purlee is an associate of Tim Smith from the old Friends of NY group. At least that is how the former lottery director got (named) involved in ERA.

[Indulto]

Figman,

Are you suggesting that ERA = FNYR - (MEC + CDI)? ;)

[the little guy]

Yes, Indulto, there is a HUGE relationship.

I wonder how all the people that gave Tim Smith money to change the statute, which he didn't accomplish, feel about him closing shop and then becoming a competitor the next day.

[Indulto]

tlg,

Wasn't he quoted as saying he would continue as an unpaid advisor to the legislators?

[Indulto]

R8,

Thanks for the reference:

Open Letter From Barry Ostrager, President of NYTB
http://www.nyra.com/aqueduct/feature.asp?track=A&id=1530 (http://www.nyra.com/aqueduct/feature.asp?track=A&id=1530)

“Recently, a for profit enterprise calling itself Empire Racing Associates, Inc, announced that it, like many other for profit enterprises, would seek the NYRA franchise. Empire Racing Association, Inc. is only one of dozens of potential suitors for the NYRA franchise. The organizers of Empire Racing Association, Inc. claim to be a coalition of owners, breeders, and horseman who want to operate the franchise for the benefit of our indigenous New York based industry. But, in order to compete with multi-billion corporations that will be seeking the franchise, Empire Racing Associates will have to attract capital from private equity funds that would ultimately seek to protect their investment by managing New York racing in a manner very different than the NYRA presently operates.. Obviously, the opportunity to obtain control of a casino business that has a monopoly on legalized gambling in New York City would be very attractive to a private equity fund. And, having the support of New York "breeders and owners" as well as the horseman to provide cover for a private equity firm's bid for a casino operation is a brilliant move on the part of a prospective private equity investor. However, good, smart, businesslike management of the NYRA franchise might well involve reducing the number of racing days (an unnecessary drain on capital for a successful casino operation ) and potentially reducing the New York bred purses. After all, where are the owners of New York breds going to go if the purses are cut from $41,000 to $25,000? And how many live races are conducted in Las Vegas and Atlantic City?”