New York Racing Association finished last in ad hoc committee's report, but it is still in the race for franchise

by Don Clippinger

EARLY in November, the United States went through a political bloodletting whose overriding theme was, "Throw the bums out!" It happened this year, and it happened in 1994, when the Republican Party took control of both houses of Congress. This year, it was the Democratic Party that swept away Republican majorities.

In general, however, it is never smart to bet against an incumbent. An incumbent has an inherent advantage: He or she can influence such matters as how congressional or legislative districts are drawn and can raise money for election cycles because of current power. A challenger offers only the potential of future power.

Moreover, incumbents tend to be popular in their jurisdictions because they bring home the bacon. Local projects get money from legislative bodies, and thus the lawmaker builds up support back home.

In this past election, U.S. Senator Joe Lieberman was rejected by his own Democratic Party in a primary election only six years after he was the party's vice presidential nominee. But he still had so much popularity back home in Connecticut that he won the general election as an independent.

No one has ever described the New York Racing Association as being the most popular racing organization in America, but it certainly has the attribute of incumbency. For more than a half-century, it has run racing in metropolitan New York, which remains the country's most potent circuit.

To be sure, the Southern California tracks are formidable, but the New York tracks still house many of the sport's leading horses and top trainers. Based on average purse per race, the NYRA tracks ranked first (Saratoga Race Course) and third (Belmont Park) last year. Between them was Keeneland Race Course, and the four large Southern California associations followed Belmont.

Right now, NYRA looks like a basket case as it bids to continue as the franchise holder for New York racing. Early in November, it filed for protection from its creditors under Chapter 11 of the U.S. Bankruptcy Act. The Ad Hoc Committee on the Future of New York Racing evaluated bidders for the franchise, and NYRA finished a distant third, well behind Excelsior Racing Associates, which received the ad hoc committee's nonbinding recommendation, and Empire Racing Associates, which had assembled a blue-ribbon group of partners, including the New York Thoroughbred Horsemen's Association.

The process now moves into the Legislature, which will pick the entity that will receive a 20-year franchise beginning the first day of 2008. On its face, NYRA does not have much clout in the process, and it continues to face off with state government over the crucial question of who owns the Saratoga, Belmont, and Aqueduct properties.

NYRA says it owns the land; state officials say the state owns the land or will own it when the NYRA franchise expires on December 31, 2007. Very likely, the judge in NYRA's bankruptcy case will make that decision. A bankruptcy judge very well might be loath to dispossess NYRA and effectively stiff all its creditors.

Until that decision is made, NYRA is holding some high cards. First, it is the debtor in possession. Even if it ultimately is decided that the state owns the land after the franchise expires--an outcome that is by no means certain--NYRA could argue that it owns the improvements to the land. And so the standoff would continue.

Second, it has a respected and skillful player in Charles Hayward, NYRA's president and chief executive officer. Although he has maintained steadfastly that NYRA owns the land, Hayward has softened the rhetoric by saying that NYRA would not hold New York racing hostage over the ownership issue.

Its third ally is the political process itself. Eliot Spitzer takes over as governor next month, and he and the New York Legislature will have a full plate of issues to address throughout 2007. As anyone who has advocated special-interest legislation knows, horse racing is not a bread-and-butter issue. It has little effect on the general public, and the easiest course may be to leave the incumbent in place.

But this is politics, and anything can happen. So no bidder, especially NYRA, should be counted out of the franchise race quite yet.

Don Clippinger is editorial director of Thoroughbred Times.