Despite 'Broken' Model, NYRA Franchise Considered Premium
Updated: Thursday, January 26, 2006 8:31 AM
Posted: Thursday, January 26, 2006 8:11 AM
As racing industry leaders discussed the value of Thoroughbred racing at New York's three premier tracks, the company that owns the state's fourth Thoroughbred track, Finger Lakes Gaming & Racing, said it could pursue the New York Racing Association franchise.
Officials with Delaware North Co. confirmed they expect to be among the bidders for Aqueduct, Belmont Park, and Saratoga. During a Jan. 25 hearing in New York City on the NYRA franchise, speakers urged the state to keep the three tracks as part of a package rather than parcel them out.
"You'll definitely see us as part of the pack, either individually or as part of a group," Christian Riegle, president of Finger Lakes, told the Buffalo News
. In his written remarks to the panel, which also met Jan. 24 in Albany, Riegle didn't specifically state that Delaware North plans to submit a bid for the franchise.
The NYRA franchise expires at the end of 2007. The main thrust of hearings on the franchise and Thoroughbred racing in New York has been the state of the pari-mutuel economic model and a need for an overhaul. Friends of New York Racing, an industry organization formed to advocate for a new model, has offered a plan that has the support of other major racing organizations around the country that ultimately would be affected by changes in New York.
Alan Marzelli, president of The Jockey Club, was one official who testified Jan. 25 on the importance of New York racing.
"For all its recent troubles, New York remains the centerpiece of Thoroughbred racing in this country," Marzelli said. "New York has always been a place where champions come to race...The race meets at Aqueduct, Belmont, and Saratoga combined account for the highest quality of racing in the world. While these three racetracks accounted for just 4% of the total races in the United States in 2004, they accounted for 11% of total purses paid and 23% of total wagering. And of the 492 graded stakes in the U.S. that attracted the highest caliber of horses, 123--a staggering 25%--took place in New York."
Marzelli discussed the major moments in New York racing, including past editions of the Belmont Stakes (gr. I) and Breeders' Cup World Thoroughbred Championships. "But sadly, the excitement of the races themselves contrast sharply with the business reality of racing in New York," he said. "New York racing's financial troubles have been well documented in both the print and broadcast media in the past few years. But while reports of fraud and corporate mismanagement have garnered headlines, they do not begin to tell the real story.
"The real root of today's financial problems can be summed up as follows: The business model is broken, and the structure of racing and the pari-mutuel industry in New York is dysfunctional. But before the business model can be fixed, the racing industry and the state need to realize that they share common interests and that what is good for one is good for the other. They need a partnership or, at the very least, the spirit of a partnership, not just a peaceful coexistence."
During the Jan. 24, hearing Magna Entertainment Corp. chairman Frank Stronach said MEC, the country's largest racetrack company in terms of holdings, is interested in a partnering with other companies on a NYRA franchise bid. Riegle declined to tell the News
what other companies, if any, Delaware North may partner with should it bid on the franchise.
"We've owned Finger Lakes racetrack since 1964," he said. "We've made a profit every single year, and NYRA has been unable to do that, arguably with the three best properties in the biggest market. So, we see a lot of opportunity."
Delaware North also owns Wheeling Downs, a Greyhound racino in West Virginia, and the arena where the Boston Celtics and Bruins play, and runs the video lottery terminal operations at Buffalo Gaming & Racing and Saratoga Gaming & Racing, two New York harness tracks.
Barry Ostrager, president of the New York Thoroughbred Breeders, testified Jan. 25 that the organization believes only one franchise should be awarded for the three tracks. He also said the NYTB has a successful working agreement with NYRA.
"The New York Racing Association has been very supportive of our indigenous breeding industry and done many things that have facilated the success of the New York breeding industry," Ostrager said. "The New York breeders have looked to the NYRA as a friend and co-venturer...Without the cooperationthe breeders have received from the NYRA, it would have been difficult to stand stallions in New York and there surely would be vastly fewer mares, foals, farms, and greenspace in New York state, all of which would adversely impact the state's economy."
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