The New York Racing Association board of trustees has rejected a bid by Magna Entertainment Corp. to become financial partners, NYRA chairman Barry Schwartz said.
The merger of the two entities, whose heads have butted over the years, has been secretly discussed the past two weeks, Schwartz confirmed March 10. Schwartz said the topic was first raised by MEC in October.
MEC, long interested in getting into the New York market, pitched its deep financial pockets to the cash-starved NYRA as the chief reason for a merger. Schwartz, sources said, would have been permitted to remain as chairman under the merged entity.
"Our board is not interested in a joint venture," Schwartz said just after the meeting broke up at Aqueduct. He said he and MEC chairman Frank Stronach never reached the stage of talking finances.
"The pitch was to join forces, to take NYRA private," Schwartz said. But the NYRA chairman said the board, after all its legal and financial problems the past couple years, rejected the offer.
"We're an independent organization that is going to continue doing what we are doing," Schwartz said. "Basically, we've gotten through some very difficult times, and we view NYRA's future as very bright."
MEC president Jim McAlpine couldn't immediately be reached for comment.
The merger offer came as MEC has hired a number of politically connected lobbyists in Albany. Besides being represented by former U.S. Sen. Alfonse D'Amato, the firm has hired Patricia Lynch, a former top aide to Assembly Speaker Sheldon Silver, and Kenneth Bruno, the son of Senate Majority Leader Joseph Bruno. The elder Bruno has long been NYRA's chief supporter at the capital.
Though sources said D'Amato is working for MEC, state lobbying records found no evidence of that. Lynch is making $110,000 for MEC this year, under the just-released lobbying records, while Bruno's lobbying firm is getting $180,000. The lobbyists either declined to be interviewed or didn't return calls for comment.
MEC's lobbyist hiring spree has been speculated for months. Lawmakers and others said they expected MEC to put on a big push to try to block NYRA's effort to get its franchise extended beyond 2007. NYRA wants at least a two-year extension--it had been in line for a five-year extension before its indictment, deferred prosecution and $3-million fine by federal prosecutors last year--to help in the financing of its video lottery terminal casino at Aqueduct.
Schwartz, who did battle with MEC several years ago over a bid to buy New York City Off-Track Betting Corp., said he expects MEC to try to stop the franchise extension. "They used the same group to buy (NYCOTB), D'Amato, and Lynch," he said. "That was the partnership that helped them try to buy OTB. They won that battle, but lost the war. Will they try to block the franchise extension? I would imagine they would. Will they be successful? I imagine they won't be successful."
Schwartz said the franchise extension to help NYRA get the VLTs running this year will be more important to the state than "pandering to Magna's lobbyists."
A NYRA and Magna merger, given the years of bad blood, would have sent shock waves through the racing industry, let alone the impact such a partnership could have on the nation's racing scene. But Schwartz insisted he and Stronach got along well during the discussions over a merger.
"I have no personal animosity towards him, and I don't think he has any toward me," Schwartz said.