New York City OTB Bidding Said to be Wide Open
Updated: Thursday, February 22, 2001 1:37 PM
Posted: Thursday, February 22, 2001 1:37 PM
All parties that met the city's demand of a bid of at least $250 million remain in the running for ownership of New York City Off-Track Betting Corp., sources close to the situation said Thursday.
City officials have strongly denied a published report this week that the field has been narrowed to two bidders -- one group led by the New York Racing Association, and the other by Frank Stronach's Magna Entertainment.
"It's not true, and it wasn't helpful in terms of everybody trusting each other involved in the final process," a source close to the matter said.
The officials, who spoke on condition of anonymity, said it could be a few weeks before New York Mayor Rudolph Giuliani is presented with the possible options should he, in the end, decide to go ahead with the sale of the OTB corporation. It would be the first sale of an OTB corporation in New York to a private firm, and any sale would need to clear many legislative hurdles in Albany.
The city's Economic Development Corp. is conducting the bidding process. Mike Hess, a lawyer with the city's corporation counsel office, couldn't be reached for comment. But the New York Post quoted Hess as saying a report in Daily Racing Form that claimed the field was narrowed to two bidders was "total bull."
The bidders continue to be NYRA, in partnership with the TV Games Network; Magna, in partnership with Greenwood Racing; Churchill Downs Inc.; and the Japanese investment firm Nomura Securities.
NYRA, with a long line of political allies in New York, is considered the front-runner in a behind-the-scenes battle that is pitting the operator of three racetracks -- Aqueduct, Belmont Park, and Saratoga -- against Canadian industrialist Stronach. The Magna chairman has purchased seven tracks around the country, and some are concerned about his motivations in New York.
The bidding process is complicated because the winning bid may not just be the one that offers the most money. There are a host of considerations, sources said, including which bidder has the best plan to deal with the OTB's unionized workers, and a strategy for getting a change in the law to permit a new operator to take over the operation.
Additionally, the deal doesn't include long-term access to the television signal now used by OTB to send races into homes. The winning bidder must negotiate with Time Warner Cablevision.
Sources also said there is a chance the current makeup of the bidding partnerships could change. How that would work is unclear though not unprecedented in bidding for major projects in New York.
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