After many years in the same profession, it is not uncommon to feel the need for a new and greater challenge. Charlie Hayward fit that bill, so in November 2004, following a lengthy career in publishing, Hayward was named the president and CEO of the New York Racing Association.
If it was a challenge he wanted, Hayward was in the right spot.
In fact, he was brought in, Hayward said Sept. 13, “to fix things.” And there was much to fix.
At the time of his appointment, NYRA was operating under a court-appointed monitor overseeing its operations after the organization was being indicted and fined $3 million for its role in a tax-fraud scheme by employees. Investigators had uncovered widespread abuses; NYRA was bleeding millions month after month; the battle for a new franchise agreement was looming.
A challenge? You might say that.
In November 2006, a non-binding decision by the Ad Hoc Committee on the Future of Racing recommended that Excelsior Racing Associates be awarded the franchise to run racing at Aqueduct, Belmont, and Saratoga racetracks.
At about the same time, NYRA filed for Chapter 11 bankruptcy protection, claiming the state’s failure to approve a long-stalled casino project for Aqueduct had pushed it toward insolvency.
The committee was formed under the administration of Gov. George Pataki. Following the election of Gov. Eliot Spitzer, a full review was made and final bids for the franchise were accepted last year from four groups—Excelsior, NYRA, Capital Play, and Empire Racing Associates.
In the end, after much negotiation and political give-and-take, Spitzer formally recommended that NYRA receive a new 25-year franchise agreement. A key was NYRA’s release of a claim that it owns the land upon which the three tracks sit, acreage presently valued at $1 billion.
On Sept. 10, signatures were placed on 17 different documents, and the following day the bankruptcy court signed off on things. On Sept. 12, it was announced NYRA had emerged from bankruptcy and was officially the new franchise holder.
The state is also giving NYRA $105 million to help it emerge from its Chapter 11 bankruptcy protection.
A key question remains: Who will operate the video lottery terminals at Aqueduct? Three entities are bidding for the right to install the 4,500 machines.
Asked his three priorities for the new NYRA, now incorporated as a not-for-profit company, Hayward said the first will happen by the time this column is read by most.
“On Wednesday (Sept. 17), we are meeting with our employees to thank them for their hard work, their good frame of mind through everything, and to talk about the future,” Hayward said.
Second…“We won’t have any revenue from VLTs for at least 15-18 months, so we need to do priority planning. We are working on a long-term plan for our facilities.”
Third…“From a business perspective, we need to work with the OTB network. We need to consider rationalization and consolidation. It is a broken system.”
There are those on both sides of the argument as to whether or not NYRA should have received the new franchise agreement. Certainly the state gaining title to the land was a huge bargaining chip.
The state also has more oversight, the new board consisting of members chosen both by the state and the racing association.
New York is the most important racing circuit in North America, and its survival is critical to the entire industry. At the three tracks operated by NYRA, 23% of all graded stakes are run (110 of 481), and 35% of grade I contests (38 of 110).
The handle by New York citizens, and the total handle on New York races, is second to none, and the purses paid to horsemen, partly due to a strong state-bred program, are also significant.
NYRA has a new life, but many challenges lay ahead. The entire Thoroughbred industry needs to help the new holder of the franchise more than it helped the former franchise holders.
