Advise and Dissent
Updated: Tuesday, September 26, 2000 9:31 AM
Posted: Tuesday, September 26, 2000 9:29 AM
Editor in Chief
The conclusions and recommendations given the National Thoroughbred Racing Association in a draft memo from an advisory committee chaired by Maryland Jockey Club president Joe De Francis should be reviewed carefully by the NTRA's board of directors and executive team.
It would be easy to dismiss the draft as the ranting of a disaffected minority group, and it is troubling the report was distributed to the media before there was dialogue between the committee and the NTRA at-large. Further, repetitive statements in the report that a "substantial percentage" of NTRA members has become "fearful and mistrustful" of the organization are not substantiated.
The committee was formed on behalf of track operators in the Mid-Atlantic region after the tracks threatened to pull out of the NTRA earlier this year. One of the committee members was William Carnevale, the president of New York City OTB. During several meetings, Carnevale was represented by Ira Block, the corporation's general counsel, who also was preparing a possible lawsuit against the TV Games Network. New York City OTB is no longer a member of the NTRA, having dropped out after reaching an out-of-court settlement to pay back dues. It is clear, however, that the organization left a heavy imprint on the advisory committee's report, which, among other things, calls the NTRA's business relationship with TVG a "mistake."
TVG, which has made an enormous investment to give racing an interactive wagering platform on television that also provides equitable revenue sharing, is a threat to New York City OTB's telephone account wagering, which has been poaching bettors for a number of years. It's also a threat to the telephone wagering business of Penn National, whose president, William Bork, also served on the advisory committee.
The committee also recommends the NTRA take "no further steps" toward the acquisition of a tote company, which has been discussed as part of a major ongoing proj-ect with IBM Global Services. IBM has deployed an army of consultants to examine racing's technological opportunities and has indicated a willingness to invest heavily in the sport's future. The advisory committee wants the NTRA to postpone any decision regarding IBM until after it adopts a member's bill of rights and decision-making procedures contrary to the original business plan that was developed through a broad consensus when the NTRA was created.
The committee discovered NASCAR is one of the world's most successful sports organizations, and invited Brian France, a senior vice president, to talk about its growth. So impressed by NASCAR, the committee's report said a "comprehensive, NASCAR-type business model must be developed in order for the NTRA to continue to function."
Let's be realistic in comparing horse racing to NASCAR. Forbes magazine recently provided insight into the privately held, for-profit company. "NASCAR's power derives from the monopolistic way the sport is structured," Forbes wrote. "As the founding family of NASCAR, the Frances have arrogated each year the right to decide by themselves which tracks receive race dates, including the sport's premier series, the Winston Cup races." The story went on to say the Frances have steered an increasing number of races to tracks they own. It is difficult to imagine racetrack owners ceding similar powers to the NTRA, yet this is what the advisory committee recommends.
Though several members of the committee may be biased against the NTRA; portions of its report may be naïve; and at least four committee members say its conclusions represent a minority viewpoint, the NTRA should continue the dialogue with Mid-Atlantic tracks. At some point, however, the NTRA may have to ask itself whether it will be better off without some of them as members.
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