The new head of a state government panel that will oversee Thoroughbred racing in New York as of Jan. 1, 2008, said he could not guarantee that horses will be running at Aqueduct in two weeks.
“I don’t think you can ever be certain of anything,’’ said Steve Newman, who was appointed this week by New York Gov. Eliot Spitzer as chairman of the Non-Profit Racing Association Oversight Board.
But Newman, who comes to the job with no background in racing, said all sides including Spitzer, legislative leaders, and the industry, are working to prevent racing from shutting down after Dec. 31 when the New York Racing Association franchise expires.
Newman spoke with The Blood-Horse during a Dec. 21 interview.
“It’s clearly in every party’s interest that it occurs,’’ he said of continuing racing on a temporary basis while the sides continue negotiations on the future of the franchise. “That doesn’t mean that sometimes people perceive their interest to be different from what’s logical, and it doesn’t mean that personalities don’t get in the way sometimes.”
Spitzer and legislative leaders have been unable to strike a deal on the new franchise-holder to run Aqueduct, Belmont Park, and Saratoga. The sides agree NYRA will continue to run racing. But they are stuck on a number of issues, such as whether NYRA will continue to oversee all aspects of the business, how long the next franchise should last, and whether the NYRA board of directors must be replaced.
In a release sent Dec. 22, The New York Racing Association said it received support from more than 97% of its creditors for its proposed chapter 11 plan of reorganization. With the court-approved voting process concluded, NYRA has satisfied yet another requirement for confirmation of its plan, the release said.
"NYRA is proud to have the support of its creditors as it works to emerge from chapter 11 and maintain its position as a leader in thoroughbred racing," NYRA's chairman, Steve Duncker, stated.
The extension of NYRA's franchise and the exit from chapter 11 remain subject to New York State and court approvals.
By law, Newman’s oversight board will be in control of racing Jan. 1. Newman, who served as the top aide to two longtime New York City comptrollers, was named to the board the week of Dec. 16 by Assembly Speaker Sheldon Silver, who, like Spitzer and Newman, is a Democrat. Spitzer then put Newman in the chairman’s post, which had been held by Carole Stone, an appointee of former Republican Gov. George Pataki.
The oversight board gave considerable power to the chairman: He can strike a deal with NYRA to continue running racing on an interim basis. If NYRA does not agree to the terms, he can negotiate with another operator to run racing.
When asked if he had talked to NYRA officials yet, Newman said” “I called NYRA probably an hour-and-a-half or two hours ago, and they haven’t called me back yet.’’
Newman said he has known Silver for years, and noted that while he knows people who work for Spitzer, he is the appointee of the Assembly Democrats.
“The Assembly folks told me this was important, that they needed my finance and contract government experience, and that it was important during a crunch time in the process,” Newman said. “I figured it was a useful thing to do.”
Newman said there are several possibilities of how the stalemate could be resolved. He said Spitzer and legislators could come to a handshake deal on a long-term franchise extension before Dec. 31, and then have the legislature return, as scheduled, in early January to ratify it. The oversight board would still take over racing until ratification.
Or, he said, the sides could agree on a temporary extension for NYRA, during which time the oversight board could still be technically in charge of running racing. Under that scenario, negotiators have said the whole issue could drag on for months and get linked to this spring’s budget negotiations.
Asked how long the board’s control could last, and could it go on, for example, for a year, he said: “I would hope not. Besides personally hoping not, clearly it would not be in anyone’s interest for that to happen. But, strange things happens sometimes.’’
NYRA is operating under bankruptcy protection. It has a scheduled hearing before the federal judge Dec. 27, a session Newman said could provide an impetus for the sides to strike a deal.
“A motivation on all the people’s part should recognize the judge has an important role and is an independent actor in this,” he said. “The best way to show up at court is with a done deal for the judge to review. The likelihood of that is clearly an open question.’’
Newman, 65, has never attended a horse race, though he recalled riding his bike through Belmont as a child. “I was told in some ways that wasn’t so bad…I have no biases to this and lot of contract, fiscal, and negotiating experience,’’ he said of his lack of experience in the horse industry.
Newman has been an adjunct professor at New York University teaching a course in government contracting and privatization. He is the chief fiscal officer of Medical and Health Research Association, a public health organization with a $210 million budget.
Newman said he is convinced all sides want a resolution. “All parties to this are actively working at this everyday,’’ he said. “There’s nobody sitting around waiting for somebody else to do something or change their minds. There are constant discussions.’’
