new NYRA Board

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Random rants from the Spa

Posted by noonante on August 24, 2015
Posted in: Horse Racing, Political/Social commentary, Politics. Tagged: , , , , . 1 Comment

One observer’s musings:

What is going on with the attendance?  Initially it appeared that the Saratoga meet was off to a great start with all-source handle and reported attendance up significantly from last year.  Recently though, the attendance reported by NYRA has been below figures from the comparable day last year.

Last year marked the start of NYRA’s imaginative new way of reporting attendance.  After counting those who actually passed through the turnstiles, it then added those who had purchased a season pass but did not actually appear.  About 6,400 such passes were sold last year, with five of six pass holders not attending on an average day.  This year, approximately 8,400 passes were sold, and I suspect that NYRA is now also adding in reserved tickets sold in advance that are not used.  (NYRA did not respond to my question on this latter issue.)

So with attendance figures being inflated by several thousand more than last year on each day, when the reported attendance falls below last year’s numbers, it is an ominous development.  On Saturday, for example, NYRA reported attendance of 36,255 compared with 40,594 from last year.  That’s a ten per cent drop even before it is discounted further by the pass holders and reserved tickets sold to those who did not appear.  It is part of at least four days in a row with reported attendance being below the same day last year.  Attendance data for this year is from The Saratogian Pink Sheet.

Now that Fabulous Fillies Day is over, what is New York doing to attract more women as fans?  Teresa Genaro wrote a column in last week’s Saratogian that I did not think was particularly provocative, but sparked outrage from one anonymous troll who was effectively denounced by other commenters (each of whom used their name).  In NYRA CEO Chris Kay’s initial press conference two years ago, he identified attracting more women as fans as one of his priorities.  He had just started, so one would not expect he had fully-formed ideas.  Since then, NYRA has continued the inane Fabulous Fillies Day where everyone wears pink and there is a celebratory lunch. but I cannot think of another initiative unless you count the equally inane concert for mothers and their girls starring someone who can now be seen in pimple commercials.

The NYRA Board continues to be a club for white men.  Of the twenty who have been appointed by the Governor, legislative leaders and the “old” NYRA, there has been but one woman, and she has since resigned.  There has yet to be a Latino/a or non-white appointee.  The Governor has two vacancies to which he can make appointments, but has not done so in a while.

When I was writing about the disputed election for the presidency of the New York Thoroughbred Horsemen’s Association, I read the transcript of the appeal hearing.  NYTHA Board members Linda Rice, Leah Gyarmati and Tina Bond each asked pointed and relevant questions getting to the heart of the issue.  It made the standard NYRA Board meeting, by contrast, look even more pathetic.  So there are knowledgeable women in the business who could make a contribution, but I guess their talents would be wasted if the current leadership is only interested in more yes-men.

Speaking of women and NYRA, it’s good NYRA did not give in to the salary demands of the now-former horse identifier.  Writing in the Racing Form this week, David Grening reported on the departure of Carol Dolan, a 31-year employee of the Horse Identification Office.  Dolan had assumed the duties of chief horse identifier following the resignation of her predecessor, Janet Reid.  When Dolan’s salary requests were not met, she resigned.  I don’t know what she was thinking.  This NYRA clearly does not value those who are not only professional horse people  –  and one who plays an important role in the integrity of the game  –  but long-time employees.  After all, when you have to  to pay a Chief Experience Officer  –  whose salary is the same as the General Counsel  –  you are not going to get that coin by charging for picnic tables.  At some point, Chris Kay is sure to tell us what has been accomplished by this brain storm of his.

I’m sorry, but what racing are we talking about here?  Growing attention is being paid to the influence of performance-enhancing drugs in Track and Field.  As the New York Times reported, the “doping drumbeat is hardly new to track and field, but it is back to deafening levels amid recent allegations of widespread doping by Russian and Kenyan athletes and reports of suspicious blood values recorded by many leading athletes in endurance events in the 2000s.”

I laughed, though, when I read the defense of the sport by a representative of the International Association of Athletics Federations:

If you don’t follow the rules, they’ll take you down.  So why are we getting torn down as a sport for that?  Do you think other sports would take some of their biggest stars and let you know that they did something very wrong?  No.  Track and Field does, but since track and field does that, we get torn down.

Kind of sounds like those who are still in denial that horse racing has a doping problem.

 

 

NYRA backtracks on equine safety – an update

Posted by noonante on August 21, 2015
Posted in: Horse Racing, Political/Social commentary, Politics. Tagged: , , , , , . Leave a comment

The following article is based on one I posted on August 15.  Following its publication, I received a communication from the spokesperson for New York’s Gaming Commission who provided me with a letter from Dr. Scott Palmer, D.V.M., Chair of the Task Force, who had determined it was not immediately necessary to change the ratio of purse levels to the claiming price.  While I had requested documents under the New York public records law, this letter apparently was not in the possession of the Gaming Commission.  This post discusses that letter as well as other factual material not included in the original post.

The New York Racing Association is running claiming races contrary to a key standard of the 2012 Task Force on Racehorse Health and Safety.  The Task Force stated that the ratio of the purse amount to the claiming price “should be no greater than 1.6.”  Over the first 23 days of the Saratoga meet, NYRA has carded races that exceed that ratio 34 times.

The Task Force was created in 2012 following a significant increase in equine fatalities on Aqueduct’s inner track.  It was composed of widely-respected racing figures and chaired by Dr. Scott Palmer, D.V.M. It was charged with investigating the causes of the breakdowns and making recommendations.  One focus of their work was the infusion of revenues from Video Lottery Terminals that went to NYRA purses, especially in lower-level claiming races.  The Task Force concluded that the existing regulation

“contained no provision to address a potential imbalance between the value of the horse and the purse of the race, as occurred during the Aqueduct meet.  This imbalance contributed to perceptions that horses were being entered in claiming races beyond their level of competition and forced to perform to the point of serious injury or death.”

The agency regulating racing adopted a rule limiting the purse to claim ration to 2.0, but the Task Force found this inadequate to protect equine safety:  “… the Task Force believes that the purse to claim price ratio should be no greater than 1.6, in which the value of the horse is approximately equal to the winner’s share of the purse, and that the Rule should be amended accordingly.”  The Task Force conclusion is consistent with that of the American Association of Equine Practitioners which, in 2009, stated that the ratio should not be greater than 1.5.

Governor Andrew Cuomo agreed.  When he released the Task Force report on September 28, he directed the regulatory agency to amend the “claiming rule to allow a purse-to-claim ratio no greater than 1.6 to 1.”

In an interesting development, Dr. Palmer retreated from the Task Force’s recommendation three days later.  He cited the unintended economic consequence that might put New York at a competitive disadvantage with neighboring states that also had casino-fueled purse increases.  While one would conclude from reading the Task Force Report that equine and rider safety were paramount, Palmer was now weighing the economic considerations:

“The Task Force believes that [the 1.6 ratio] is a defensible ration from a pure safety-goal oriented perspective, but recognizes that in this situation there are degrees of risk aversion that may be effective, even if they are not absolute.”

(Emphasis mine.)

He further determined that the existing 2.0 rule

“may have already achieved the desired effect by providing a more appropriate ratio that has diminished the incentive to race horses at an undervalued price….  The existing rule change may well have established a balance between equine safety and economic viability, particularly when taken in the context of the implementation of the other recommendations of the Task Force.”

What is puzzling about this rationale is that the “other recommendations” of the Task Force could not have been implemented since the Palmer letter came only three days after the Report’s release.  Also, the existing 2.0 rule had yet to be in effect at the time of the Aqueduct meet.  It was adopted at the end of the spring 2012 meet, and had yet to be tested at the track that is the focus of so much attention regarding racing fatalities.

Since the 2012 crisis, Aqueduct has had two more occasions when fatalities provoked concern by New York’s racing officials.  The catastrophic injuries early in the 2012-2013 Aqueduct meeting caused David Skorton, then the Chair of the NYRA Board to raise the possibility that racing at the Big A should be cancelled altogether.  A member of the Franchise Oversight Board referred to the “killing fields” of Aqueduct.  In the 2014-2015 meet, fatalities resulted in NYRA adopting several hastily-conceived steps intended to address the problem.

In 2015, there were 10 fatal breakdowns at Aqueduct, including three on the main track.  Two of the seven inner track fatalities were in races where the purse-to-claiming ratio exceeded 1.6, albeit by minor amounts.  Two of three main track fatalities came in races where the ratio exceeded 1.6.

The Equibase chart for one of those main tracks fatalities was particularly poignant in light of the comment from the Task Force Report that “horses were being entered in claiming races beyond their level of competition and forced to perform to the point of serious injury or death.”  The chart for the first race on April 16 reported “ZENSTONE pressured on the pace inside by SONG BROOK early on and then PATRIA QUERIDA, got set down spinning just off the inside for home, inched away to the eighth pole, dug in under growing threat inside the final sixteenth, was caught in the last jumps while safe for the place honors, then was vanned off after the finish.”  The filly later died.

Was the $40,000 purse for a $20,000 claiming price the reason Zenstone did not survive her final game effort?  Since catastrophic injuries can have several possible reasons, it would be foolish to make that conclusion.  Are the four Aqueduct fatalities in ten races statistically significant?  No, given the small sample size.  (Saratoga’s 34 races exceeding the 1.6 standard mercifully have not resulted in any fatalities reported on the Gaming Commission web site.)

When Dr. Palmer wrote his October 1, 2012 letter, he recommended against an emergency change in the regulations to drop from 2.0 to 1.6, instead saying that the 2.0 rule should “be kept in place until such time that a deliberate analysis of  the potential unintended consequences that a proposed change in the ratio to 1.6 may be determined.”  While such a discrete analysis has not been done, the spokesperson for the Gaming Commission assured me that Dr. Palmer maintains that ratios greater than 2.0 are still inappropriate.

It’s a curious way to conduct the people’s business.  A well-regarded panel of experts prepared a lengthy report explicitly rejecting the 2.0 ratio and replacing it with a 1.6 ratio.  That ratio is consistent with the recommendation of the national veterinary group.  The Governor endorsed that proposal and directed the regulatory body (now the Gaming Commission) to change its regulations.  The chair of the Task Force reconsidered and sent a letter three days later, but it never made it to the regulatory body.  Since they did not have the letter, it is not clear if not amending the rule was the result of bureaucratic inertia or communications for which there is no written record.

What is clear, however, is that it is time to conduct the analysis recommended by Dr. Palmer.  New York racing does not need another winter of negative publicity concerning safety at Aqueduct.  Taking the claiming ratio off the table as an outstanding issue would be a step in the right direction.

 

 

 

NYRA backtracks on equine safety

Posted by noonante on August 15, 2015
Posted in: Horse Racing, Political/Social commentary, Politics. Tagged: , , , . Leave a comment

The New York Racing Association is running claiming races that violate a key standard of the 2012 Task Force on Racehorse Health and Safety.  The Task Force stated that the ratio of the purse amount to the claiming price “should be no greater than 1.6.”  Over the first 20 days of the Saratoga meet, NYRA has carded races that exceed that ratio 28 times.

The Task Force was created in 2012 following a significant increase in equine fatalities on Aqueduct’s inner track.  It was composed of widely-respected racing figures and was charged with investigating the causes of the breakdowns and making recommendations.  One focus of their work was the infusion of revenues from Video Lottery Terminals that went to NYRA purses, especially in lower-level claiming races.  The Task Force concluded that the existing regulation

“contained no provision to address a potential imbalance between the value of the horse and the purse of the race, as occurred during the Aqueduct meet.  This imbalance contributed to perceptions that horses were being entered in claiming races beyond their level of competition and forced to perform to the point of serious injury or death.”

The New York agency regulating racing adopted a rule limiting the purse to claim ration to 2.0, but the Task Force found this inadequate to protect equine safety:  “… the Task Force believes that the purse to claim price ratio should be no greater than 1.6, in which the value of the horse is approximately equal to the winner’s share of the purse, and that the Rule should be amended accordingly.”

Governor Andrew Cuomo agreed.  When he released the Task Force report, he directed NYRA and the regulatory agency to amend the “claiming rule to allow a purse-to-claim ratio no greater than 1.6 to 1.”

It is a matter of more than academic interest.  The Task Force determined that 17 of the 21 fatalities it investigated occurred in claiming races.  It concluded that the “disproportionate number of claiming horses in the population of fatalities suggests that inadequate protection was afforded to this class of horse.”

 

Kay bonus award symptomatic of NYRA problem

Posted by noonante on October 27, 2014
Posted in: Horse Racing, Political/Social commentary, Politics. Tagged: , , , , , . 2 Comments

Recent news articles revealed the salary paid Tom Durkin, the legendary and (and now-retired) track announcer for the New York Racing Association.  Albany’s Times Union used the occasion to observe  –  correctly  –  that NYRA “needs to remember its obligation to the public when deciding how generous to be with salaries.”

At least we know what Durkin did for his money, and his performance was rated by tens of thousands of fans every time he called a race during a career that included Triple Crown races and the Breeders’ Cup.  Now that NYRA has released documents to me concerning the bonus and salary increase awarded CEO Chris Kay, we still do not know what he accomplished to warrant a quarter-million dollar bonus and a $9,000 pay increase.

When the NYRA Reorganization Board embarked on hiring a new CEO early in 2013, it was leery of fostering a perception that it was overly lavish with the salary since NYRA is now a state agency.  Thus, it established a base salary of $300,000 with eligibility for a bonus of up to $250,000.  The prior permanent CEO was paid $475,000  –  a level criticized by Andrew Cuomo’s Budget Director, Robert Megna,. Megna, appointed by Cuomo to the NYRA Board, however, apparently had no problem with a level of compensation that was greater by $75K.

Now, I don’t have a problem with a salary in that range.  What I do have a problem with is an agency of government being misleading, saying one thing and doing another.  When the NYRA Board discussed the concept of a bonus, Chairman David Skorton  –  appointed by the Governor  –  assured the public it was a performance-based bonus based on metrics and that he was a hard grader.  He also promised he would be “very public” about this.

The “very public” part did not mean the public would actually know what the CEO’s goals and performance measures would be.  After the protracted refusal of NYRA to disclose that information, ending with a finding they were violating the public records law, they released the “Performance Metrics” for Kay.  It is a vague document of less than a half-page containing nothing more than generalities, but again assures us that the CEO’s “performance will be reviewed annually against the goals set by the NYRA Board.”  The NYRA Board never established any goals, let alone discuss them.

Yet this document is the only piece of paper having to do with the CEO’s goals  –  unless you count the cancelled check for $250.000.  Nowhere is there a description of Kay’s specific goals and metrics, and obviously no explanation of how his performance measured against the non-existing standards.

The portion of the NYRA Board meeting at which Kay’s bonus and pay increase was announced took all of 80 seconds.  Laughably, one of the factors cited in the Board announcement was Kay’s “fostering transparency.”  No Board member mentioned any goals, nor was there a discussion in the 80 seconds allotted this topic.

Kay was asked about this during the September meeting of the Franchise Oversight Board, a state agency whose sole responsibility is to oversee and monitor NYRA’s performance.  He was, shall we say, less than forthcoming about the fact that there was no documentation relating to his performance and the bonus.  Board member Steven Newman pressed Kay on whether there were a written set of standards, stressing the importance of a public agency being transparent and accountable.

Kay danced around the issue without ever answering directly.  He offered to provide a written statement from Chairman Skorton, although it is clear it would be something Skorton would have to create from scratch.  The FOB Chairman, Rob Williams, said he would ask NYRA for the standards, but at no time did Kay acknowledge they did not exist.  (Williams referred to the “Performance Metrics” piece of paper as being a “loose description” of goals.)

It’s not as though there are not significant issues that arose during Kay’s tenure that warrant extended discussion.  One of the three areas that Kay stresses every time he speaks is his efforts to “enhance the guest experience.”  It would be nice to know how his management of the fiasco that Belmont Stakes Day was for many fans factored into the bonus decision.  Or, how the increase in admission and parking fees might have affected attendance and handle.  Kay remarkably described those increases as an example of the enhanced guest experience he has brought to NYRA in his comments to the Franchise Oversight Board.  It is not to that body’s credit that no one questioned Kay’s logic.  (Board member Newman, who appears to be immune to Kay’s relentless spouting of nonsense, had left the meeting by this point.)

In the greater context, the secrecy and obfuscation surrounding the awarding of Kay’s bonus are not the most significant matters that face racing and breeding operations in New York.  There is the upcoming matter of what form NYRA will take when the state-controlled entity expires less than a year from now.  But if NYRA and the Governor’s appointees cannot be forthright about the relatively minor issue of the CEO’s pay and what he did to earn it, who can trust them when it comes to truly consequential decisions that will affect the livelihoods of tens-of-thousands of New Yorkers?

Has NYRA turned a corner in public perception?

Posted by noonante on August 11, 2014
Posted in: Horse Racing, Political/Social commentary, Politics, Saratoga thoughts. Tagged: , , , , , . 5 Comments

When they start laughing, it is never a good sign.  And they are starting to laugh at the New York Racing Association.  In a self-inflicted wound, NYRA announced that they count in their Saratoga attendance figures people who do not actually attend that day’s races.  Then they prevented reporters from entering a public meeting.  To top it off, the NYRA Board at that same public meeting announced CEO Chris Kay was awarded a raise and a $250,000 bonus for, among other things, his accomplishments to “foster transparency.”

In last Sunday’s Saratogian, Paul Post reported that NYRA considers the 6,370 who purchased a season pass as having attended the races each day of the 40-day meet.  Communications Director John Durso said that this was consistent with NYRA’s past practice and with that of Major League Baseball and the National Football League.  As I explained in this post, neither statement could possibly be true.  It would mean that the announced attendance of 8,044 on July 23 meant that only 1,674 actually paid to enter the track.  While Presque Isle Downs might be happy with that number (where last Wednesday’s on-track handle was $33.000), it is a number that represents a crisis for NYRA.

The day after the article appeared I surveyed a  small sample and asked what they thought the actual attendance was, and then what NYRA would report it as.  The standard guess was that attendance was about 10,000.  The highest estimate was one who said NYRA would report 18,000.  The NYRA figure exceeded even that with 19,000 being given as last Monday’s attendance.

Needless to say, none of those surveyed had any factual basis for their estimates of actual attendance apart from being long-time fans.  The important thing is that NYRA had no credibility and was the object of ridicule.  Now the local media, including the Times Union and the Albany NPR affiliate WAMC, are joining the fray and they too are laughing.

The risk for any business or politician is that once the media narrative changes, it becomes difficult to undo, regardless of the actual facts.  The prior NYRA leadership was constantly depicted as “scandal-ridden” even though there was never a scandal.  That perception was largely fueled by Governor Andrew Cuomo and his henchmen, who steamrolled the compliant media and Legislature to support his taking control of New York racing.

The current NYRA leadership has mostly been given a free pass because the narrative had been that they were reforming racing.  Never mind that actual reforms were never cited.  But some of the current criticism is not warranted.

The NYRA Board meetings are, indeed, open to the media and the public.  I have attended every full-length meeting until this one.  The meeting notice states that  both the media and the public must call ahead to reserve a spot.  Part of this is for security  –  the meetings in New York City  are in the building with other government offices including the Governor’s.  The other reason is that space is limited.  I have never had an issue with calling ahead.  The meetings are also web cast, although this most recent one was in large part inaudible.

A more significant criticism would be what actually transpires inside the meeting, but that would require media outlets to actually observe the proceedings.  (The racing media  –  DRF, Blood Horse and TDN actually have reporters attend the meetings.)  One advantage for the non-racing media to have a consistent narrative is that it saves them work.  So the Times Union can run a second piece today on media being prevented from entering the meeting for 40 minutes without actually having to analyze what happened once inside.

Were they to do that, they would start to realize that these Board meetings are nothing more than fatuous farces.  This one was typical of other recent ones.

It began with the reading of a prepared statement from Board Chairman David Skorton, who holds the sessions in such high regard he scheduled it during his vacation.  Then we had CEO Chris Kay read from a report that he distributed in advance of the meeting, followed by CFO Susanne Stover reading from her report also distributed in advance.

The report of the Compensation Committee recommending the bonus and salary increase for Kay lasted all of 100 seconds.  Kay’s final compensation for his first year on the job is in line with salaries paid other racing executives.  But Skorton and the Board made a big deal about how it would be based on performance with measurable goals  –  and they were able to “address” that in less than two minutes.

The report of the Equine Safety Committee was even shorter, lasting 85 seconds.  Board members practically fell all over themselves in self-congratulatory statements about the reduction in equine racing fatalities from NYRA’s high level from two years ago.  No one, however, raised two numbers that should have warranted at least some discussion.  Racing fatalities for the preceding four months are three times the number from the same period last year.  And, just as ominously, the fatalities occurring during training hours have not been reduced.

There was no discussion or questions from any Board member on two of the most significant controversies involving NYRA  –  the wide-spread dissatisfaction with NYRA’s handling of the Belmont Stakes or the falsification of the Saratoga attendance figures.  It seems that the sole purpose of these Board meetings is to give its members and CEO a chance to congratulate themselves for the great job they are doing.

But the honeymoon may be coming to an end.  When there is blood in the water, the sharks begin to circle  –  just ask the man to whom NYRA reports, Governor Andrew Cuomo.

I walked around the clubhouse and grandstand yesterday, and observed entire sections where at least half of the seats were empty.  The benches on the apron in front of the clubhouse had plenty of vacancies.  There were empty picnic tables by the paddock.  NYRA announced attendance of 40,452.  To put that number in perspective, look at the attendance for Whitney day.  NYRA has been promoting their new concept of “Big Days,” and set an attendance goal of 50,000 for the Whitney.  The reported figure was 36,318.

The attendance story is not going away, because the falsified figures represent a government agency that has lost its credibility, and NYRA has been incapable of articulating an explanation that is either logical or consistent.  I also ssupect that in addition to counting all season passes in a day’s figure, they are also counting the number of reserve tickets they sell, even if no one shows up.  While the latter may be an understandable practice, NYRA would be counting those reserved tickets holders a second time when they come through the turnstiles.  I have asked NYRA if that is their practice, but have not received a response.

If there is one thing I have learned from working in government and observing it closely, there is one virtual certainty  –  the truth will come out.

NYRA’s summer and the future

Posted by noonante on July 6, 2014
Posted in: Horse Racing, Political/Social commentary, Politics. Tagged: , , , , , , . Leave a comment

The New York Racing Associations has announced scheduling changes for the Saratoga meeting beginning on July 18.  Among the differences from last year:

  • A small reduction in the number of races, with only nine flat races carded for Mondays, Wednesdays and Thursdays;
  • Steeplechases on both Wednesdays and Thursdays, with the post for those events being 12:25;
  • Loading up the card for Whitney Day, August 2, by moving two Grade I races, the Test and the Alfred G. Vanderbilt, to that Saturday.

I think the first two changes are positive, although there are some who prefer longer programs.  I realize you are not being handcuffed to a seat to prevent you from leaving before the nightcap, but my personal preference is for fewer races, hopefully producing better quality racing.  Increasing the days on which there are steeplechases will appeal to fans of the jumps, and by making the post time 35 minutes before the standard 1:00, those who do not care for the events won’t be bothered (and the earlier race will not factor into the pick 5).  NYRA is to be credited with coming up with these changes that I think should only be viewed positively.

Loading up the Whitney card by moving two grade I’s from other days is an effort to repeat the increased handle that NYRA believes resulted from a similar approach on Belmont Stakes Day, when they moved Grade I’s from Memorial Day to have a card with six Grade I’s as well as four other stakes.  Martin Panza, the senior vice president for racing, was quoted by Thoroughbred Daily News as saying, “Instead of handling $40 million, we hope to be handling $80 million.  We hope … 50,000 people show up….”

This notion of creating “big” days as a way of enhancing attendance and handle, as well as attracting new fans, is one of the innovations by NYRA this year.  My view is that 100,000 showed up on Belmont Stakes Day not because there were six Grade I’s, but because California Chrome was going for the Triple Crown.  NYRA’s stated purpose in moving three Grade I’s from Memorial Day was to give Belmont Stakes Day insurance against the Crown not being at issue.  I would hazard a guess that at least half the crowd that day had no idea what a Grade I is. The increased handle, on the other hand, very likely was the result of one of this year’s most enticing race cards.  It undoubtedly came at the expense, however, of what I surmise was a seriously lower handle on Memorial Day.

So NYRA’s theory as espoused by Panza will be put to the test on this year’s Whitney day.  My prediction is that the attendance will be about what it was last year, despite what I anticipate to be a heavy marketing campaign by NYRA.

Speaking of attendance, I was at Belmont on Saturday and Sunday two weekends ago.  Both days were absolutely perfect early summer days.  On Saturday, 6,060 other fans joined me; Sunday’s crowd was 5,414.  By contrast, Monmouth Park attracted 40 percent more people over the weekend.  Even Suffolk Downs, cozily nestled between huge oil storage tanks and train tracks in East Boston, attracted a Saturday crowd that was more than half of Belmont’s.  The Monmouth cards did not come even close to approaching the quality of NYRA’s offerings  –  and we need not go into the “quality” offered by Suffolk, a track that may well be on its last legs.

Even more significantly, this weekend’s heavily touted “Stars and Stripes Day” drew a mere 11,118 for a terrific card of racing featuring two Grade I turf races and the Dwyer and Suburban.  Now I realize that Andy Serling works for NYRA, but when he mentioned the “great crowd” as I was looking at tens of thousands of empty seats, I had to wonder if working for NYRA comes at the expense of any pretense of integrity.

The Belmont numbers are not atypical.  They do, however, point to a significant issue concerning the future direction of racing in New York state.  With the exception of Saratoga and Belmont Stakes Day, attendance at New York’s tracks rarely hits five figures.  New York’s handle, from all sources, nonetheless accounts for 20 per cent of all wagers on thoroughbreds in the country.  It may not matter, then, what on-track attendance is when that amount of handle is being generated.  At the very least, however, it is a conversation worth having, particularly since the closing of NYRA’s other down-state track, Aqueduct, is frequently raised.

It is not the only subject worth discussing about New York’s future.  The Governor’s top racing figures have openly mentioned removing revenues from Video Lottery Terminals that currently go to the thoroughbred purses.  The legislation creating the current state-controlled NYRA expires a little over a year from now, and a recommendation on the future structure of NYRA must be filed in less than 10 months.

In addition, there are industry-wide issues that need to be addressed.  Tom LaMarra recently wrote in BloodHorse.com about the significant drop in both recent foal crops and the number of owners. Yet there is not even a peep from NYRA’s so-called leaders talking about these issues.  Chairman of the Board David Skorton rarely says anything about the future of the racing and breeding industries in New York.  He came to the job almost two years ago with neither a background in racing nor any knowledge of it.  I am not sure he has ever been to a horse race.  His pick for NYRA’s CEO, Chris Kay, similarly has no racing background.  At least he had been to a race, albeit 40 years before his appointment.  While his pre-Saratoga press conference demonstrated his knowledge of the eligibility for a free scoop of ice cream at the Spa’s traditional open house on July 13, the next interesting thing he says about the direction of the racing and breeding industries will be his first.

New York should be a national leader in the racing, particularly given the dramatic decline of Churchill Downs as either a racing venue or voice for the industry.  Neither Skorton nor Kay has demonstrated any aptitude  –  or interest  –  in assuming that role.  The NYRA Board that has 11 government-appointed members out of 16, is as useless an entity as exists in racing.  Its last meeting  –  the only one it will have over a six-month period  –  lasted all of 56 minutes, except for an executive session, even though it is facing these significant issues.

According to The Saratogian, Board member Charles Wait said that the preliminary report on returning NYRA to a non-government controlled entity is expected in August.  It is a report that should be made public in order to encourage a much-needed discussion about the future of NYRA.

If past performances are any indication, however, NYRA will refuse to release it.  It’s not as though a Board consisting entirely of older white men could not use some input that the 30,000 people dependent on the racing and breeding industries might have.  Last time I looked, “older white men” is the only demographic amply represented by racing patrons, a concern that should be paramount to an organization that is purportedly interested in expanding its fan base.

“The best Belmont Stakes ever”

Posted by noonante on June 4, 2014
Posted in: Horse Racing, Political/Social commentary, Politics. Tagged: , , , . Leave a comment

I guess all you need to know about the leadership of the New York Racing Association is that CEO Chris Kay has already declared this year’s event “the best Belmont Stakes ever”  –  three days before a contestant sets hoof on the track.  I foolishly thought that Secretariat had established a pretty high bar.

But to Kay, the race is apparently an afterthought.  He may think that the tens of thousands showing up at Belmont Park are for the NYRA “experience,” but most will be there for one reason only  –  to see if California Chrome can break the thirty-six year drought in accomplishing the Triple Crown.

In opening remarks before the post-position draw for Saturday’s race, Kay listed NYRA’s three goals for the event:  attracting athletes capable of delivering a superior performance;  great entertainment;  and, a “differentiated guest experience”  –  whatever that means.

NYRA has, indeed, created a tremendous card that includes six Grade I events.  As I have written previously, it comes at the expense of stripping its once-signature day of racing on Memorial Day which had three Grade I events.  Making your headliner a Grade III works at Saratoga on a Wednesday afternoon, but for the start of summer?

As for the entertainment, I have never thought people go to the track for musical acts.  That’s why the Times Union Center or Proctors exist.  Is there anyone who is actually going to go to a race track to hear Frank Sinatra, Jr. attempt his father’s version of the iconic “New York, New York?”  I did not even know there was a Frank Sinatra, Jr. until he appeared in an episode of  The Sopranos, playing himself in a poker game  –  and not singing.

And then there is the band that covers the music of the Eagles.  Now we all have our differing tastes in music, but I would not cross the street to see the original group if tickets and the beer were free.

As for the “differentiated guest experience,” I think most fans  –  excuse me, “guests,”  –  particularly women, would be happy to not wait in endless lines for the restroom.

While I think Kay is to be commended for coming up with different approaches to building the fan base  –  and I do not think any idea should be rejected out-of-hand  –  when he declares this the “best Belmont Stakes ever” on Wednesday, he is losing sight of what gets people into this sport  –  the horse.

NYRA Board – a scam or just plain incompetence?

Posted by noonante on June 3, 2014
Posted in: Horse Racing, Political/Social commentary, Politics, Uncategorized. Tagged: , , , . 1 Comment

The Board of Directors of the New York Racing Association held the only meeting it is scheduled to have over a six-month period on Wednesday.  The public portion of the meeting lasted all of 56 minutes.  The meeting’s brevity and lack of any meaningful discussion indicates either that the real discussions are happening behind closed doors in violation of state law, or that there are no meaningful discussions.  I am not sure which is worse.

It is not as though NYRA does not have significant matters on its plate.  It is charged with recommending a reprivatization plan to the Legislature by April 18 next year.  In addition, NYRA continues to operate a deficit in its racing operations, and must decide what, if anything, to do about the VLT revenues that enable it to operate in the black.  Then there is declining attendance, even at its signature Saratoga meet, and the question of whether Aqueduct should remain open.

You would not know from attending the meeting, however, that anything is amiss.  CEO Chris Kay engaged in his typical happy talk.  You have to give him credit, however, for mustering enthusiasm for a Belmont Stakes music line-up that includes Frank Sinatra, Jr. and an Eagles cover band.  Board Chairman David Skorton proclaimed that it was a “very positive year,” that NYRA was “closing in on a balanced budget,” and added that Belmont Stakes Day is a “perfect example of the progress we have made.”

There is no question that June 7 has the potential to be a special day of racing and handicapping with six Grade I events.  But the hopefully outstanding card was achieved by eviscerating Belmont’s Memorial Day, an event that had featured the Met Mile and two other Grade I’s.  This year the feature was a Grade III that lured a less-than-robust 6,946 patrons through its turnstiles.

But in terms of the “progress” claimed by Skorton, it is not clear what he means.  NYRA ended the first quarter with a loss of $10.2 million from racing operations even though handle from all sources increased compared with the same three months last year.  Even after including the revenues from VLT”s, the deficit was, as Chris Kay reported, “only” $1.5 million.  Attendance at Aqueduct was down six per cent from last year despite three more racing days.  (Yes, I know it was an unpleasant winter, but I believe the facility has heat.)

I fear that Skorton’s notion of progress has nothing to do with improvements for fans or the horsemen, but rather just the fact that they are not the old and discredited NYRA.  (Many of the improvements at tracks were actually initiated by the former group.)  Neither NYRA’s leaders nor other high-level state officials miss an opportunity to boast about their running racing in an open and transparent manner.  The reality, however, is that NYRA does neither.

NYRA is required to follow New York laws governing access to public records and public meetings.  I have detailed previously NYRA’s blatant disregard for the public records law.  The NYRA Board misrepresented the financial terms of CEO Chris Kay’s contract and then attempted to cover up the distortion.  This latest meeting of the Reorganization Board indicates they may be taking a similarly cavalier approach to the open meeting law.

At his first meeting as Chairman, David Skorton stated that all meetings of both the full Board and its committees would be public.  The Executive Committee, chaired by Skorton, has never had an open meeting;  the Finance Committee has never held one;  the Long-Term Planning Committee has never held one.

The full Board does conduct a public meeting, but it is so devoid of content and serious discussion that it is legitimate to question whether it is just a sham to feign compliance with the law.  If it is indeed a sham, it raises the possibility that meaningful discussions on the future of New York racing are taking place in secret.

The other possibility, of course, is that no such discussions are taking place, even behind closed doors.  It was at last August’s Board meeting that Chairman Skorton stated that NYRA should start operating as if the VLT revenues are no longer there.  His proposal was greeted with significant dissent, an unusual occurrence for this Board.  Since then, there has been almost no mention of this crucial matter.  Nor has there been an actual discussion of what is being considered for the reprivatization report that is due in a little over ten months.

The bottom line is that it is now almost two years since the Governor rammed through a somnolent Legislature, with the approval of a flaccid NYRA Board, a takeover of the organization running Saratoga, Belmont and Aqueduct.  While they did a great deal of chest-thumping on how New York’s tracks would now witness substantial improvements with a competent and open leadership, I am hard-pressed to identify a single significant difference.

 

 

 

 

NYRA’s CEO has a sweet deal

Posted by noonante on May 5, 2014
Posted in: Horse Racing, Political/Social commentary, Politics. Tagged: , , , , . 5 Comments

The New York Racing Association finally provided me its contract with Christopher Kay, its CEO since July, 2013.  I now understand why they fought tooth and nail to deny my access. Among the interesting provisions of the agreement are:

  • The bonus Kay for which Kay is eligible can be higher than the $250,000 NYRA has publicly stated on several occasions;
  • Kay’s “generous” automobile allowance effectively increases his base salary beyond $300,000, again an amount publicly stated on several occasions;
  • An unusual severance agreement would pay Kay $550,000 even if the contract expires at the end of its term;
  • The “Reorganization” Board can extend Kay’s contract beyond its own legally-mandated expiration;
  • Kay is permitted to sell his “concept for an on-line lottery game;”
  • While probably the result of sloppy legal work, Kay has the sole power to amend or terminate the contract.

I first requested the contract with Kay and his performance goals shortly after he was hired by the NYRA Reorganization Board.  NYRA denied my efforts to obtain the contract and Kay’s performance goals.  They even stated they did not have to abide by a decision of the state agency charged with overseeing the public records law.

When NYRA began its search for a new CEO in early 2013, the Board of Directors did not want the unfavorable publicity that would result from paying the new CEO more than the $470,000 reportedly paid the prior one.  The Board was particularly leery because they are now a state agency, with 12 of the 17 members being appointed by government officials, including eight by the Governor.  So they came up with a compensation structure that would consist of a base salary of $300,000 and a bonus of $250,000 attached to achieving performance goals.

While some might say that looks like a public relations move to increase the CEO’s pay by a healthy 17 per cent, David Skorton, the Governor’s appointee to chair the Board, assured us there would be meaningful goals and that he wanted to be “very public” about the process of determining eligibility for the bonus.

In every public comment about the bonus, including a NYRA press release, the bonus amount the CEO would be eligible for was always stated as $250,000.  The contract with Kay, however, identifies this not as the maximum, but as the “target.”  According to the contract terms, NYRA “may at its discretion” pay Kay a bonus “greater than the target.”

When the bonus concept was discussed at the February, 2013 Board meeting, Chairman Skorton assured us this was “not just a sneaky way to give more money.”  He said there would be “actual milestones to be reached,” and that he was a “hard grader.”  The chair of NYRA’s Audit Committee stressed the need to “define very specifically the parameters for the incentive comp to make sure there is no gray area.”

But as I discussed in this earlier post, there are no specifics in the statement of Kay’s performance goals.  It is nothing more than a listing of general categories that could be used to develop milestones against which performance could be measured.  The document is so useless that the one item that Skorton identified as being a milestone  –  the reprivatization of NYRA  –  is not even mentioned.

Then there is the automobile allowance of $1,650 per month.  It is a set amount and not dependent on actual expenses.  I realize that the New York City area is expensive, but yesterday’s Times had an ad for a lease on a 2014 Jaguar F-Type for only $739 per month.  So Kay can get two and still have some pocket money left over. Kay’s salary has been consistently identified by NYRA officials as $300,000, so the excessive automobile allowance should be viewed  –  as Chairman Skorton would say  –  as “just a sneaky way to give more money.”

NYRA’s generosity with its CEO doesn’t end there, however, for there is a somewhat unusual severance agreement. While one would expect a severance provision in the event that NYRA decides to end prematurely their agreement with Kay, this contract provides severance if NYRA and Kay do not reach an agreement to extend the contract beyond its end date of October 17, 2015.  Kind of like the way a baseball teams pays severance to a player who reaches the end of a contract without a new agreement.

A person with whom I consulted who has experience in negotiating employment contracts with executives for a non-profit was dumbstruck by this notion.  If NYRA and Kay are not able to reach agreement on a new contract, Kay would get both the base payment of $300,000 and the full amount of his performance-based bonus less than four months into the year.  It’s nice to start negotiations with a half-million already in your pocket.

Speaking of negotiating a new contract, why is NYRA committing to negotiating a new contract since  –  by law  –  the NYRA Reorganization Board ceases to exist on October 17, 2015?  A successor to this NYRA would then be liable for paying Kay $550,000 even if they decide to hire a new CEO.  And this is a Board that talks about putting NYRA in a solvent position, a goal not advanced by saddling its successor with potentially a half-million dollar loss right off the bat.

In another interesting provision of the contract, NYRA has agreed that Kay can profit from a “concept for an on-line lottery game” that he has developed, apparently even during the term of his contract.  It is not clear how allowing its CEO to profit from licensing competition to horse racing is in the best interests of the sport.

Finally, and I stress that this is probably the result of sloppy legal drafting, the contract can only be amended or terminated by Kay.  It provides that, “No amendment … [or] termination … shall be effective unless the same is signed by” NYRA’s “President” and the “Employee.”  NYRA’s President is Chris Kay and the referenced “Employee” is Chris Kay.

NYRA releases CEO’s performance goals

Posted by noonante on April 15, 2014
Posted in: Horse Racing, Political/Social commentary, Politics. Tagged: , , , , , . 1 Comment

The New York Racing Association has finally released to me the “performance metrics” that will be used to determine whether Chris Kay, NYRA’s CEO, will be paid a $250,000 bonus.

When NYRA began its search for a new CEO in early 2013, the Board of Directors did not want the unfavorable publicity that would result from paying the new CEO more than the $470,000 reportedly paid the prior one.  The Board was particularly leery because they are now a state agency, with 12 of the 17 members being appointed by government officials, including eight by the Governor.

So they came up with a compensation structure that would consist of a base salary of $300,000 and a bonus of $250,000 attached to achieving performance goals.  While some might say that looks like a public relations move to increase the CEO’s pay by a healthy 17 per cent, David Skorton, the Governor’s appointee to chair the Board assured us this were meaningful goals and that he was a “hard grader.”  He further guaranteed us that he wanted to be “very public” about the process of determining eligibility for the bonus.

That supposed desire to be “very public” apparently did not extend to releasing public documents without a prolonged fight.  I first requested the performance goals and Kay’s contract last August.  After NYRA refused my request and then denied my appeal, I obtained an opinion from the state agency charged with monitoring the public records law that NYRA was violating the law.  While NYRA has now released the performance goals, they continue to refuse to provide the contract.

Here is what is in the document identified as the “CEO Performance Metrics:”

“The CEO’s performance will be reviewed annually against the goals set by the NYRA Board.  Examples of items on the balanced scorecard are:

  • Financial:  Revenue, Operating Results versus Prior Year, Management of Capital Expenditures, New Revenue Initiatives
  • Quality:  Return on Marketing Initiatives, On Track Customer Experience, Development and Implementation of New Technologies, Leadership (e.g., Develop strong management team and relationships with external constituencies), Improvements in Equine and Jockey Safety”

One does not need an MBA to realize that these are not exactly measurable standards of the sort that would prevent a perhaps skeptical public from thinking that the fix is in on Kay’s bonus.  The NYRA Board has not set goals against which Kay’s performance may be measured.  That is, unless they did so in a secret meeting which, of course, would violate Skorton’s promise to be “very public.”

There are, however, actual measurable metrics to assess how Kay is doing in meeting these overly broad objectives.  The following is based on data from either NYRA’s web site or that of the New York Gaming Commission, another state agency.

Equine fatalities while training have increased by almost fifty per cent during the first nine months of Kay’s tenure.  Since Kay started in July, 2012,  2013, 31 horses have suffered a catastrophic breakdown while training, compared with 21 in the preceding nine months.  While NYRA has made a big deal about the decline in racing fatalities  –  and they have unquestionably made progress  –  it is interesting that the 18 racing fatalities since Kay started are equal to the number in the previous nine months.

What is particularly troubling about the numbers while training is that the head of NYRA’s Safety Committee frequently says NYRA has accomplished everything recommended by the 2012 Task Force on Race Horse Safety that is within its control.  Yet, I have not heard a word at any Board meeting of a potentially significant problem.  Since horse fatalities were one of the supposed reasons Governor Cuomo took over NYRA in 2012, it will be interesting to how this factors into Kay’s bonus.

Attendance at NYRA’s tracks is down almost five percent in the first six months of Kay’s administration compared with the same six months in 2012.  I assume the phrase “On Track Customer Experience” in the performance metrics means improving it.  The last time I heard Kay talk about an actual metric for measuring customer satisfaction, it was the increase in food and souvenir purchases.  Maybe it’s just me, but fewer people coming to your business is rarely seen as a good sign.  All sources handle, incidentally, is up by about one per cent over the comparable six-month periods.

For the return on marketing initiatives, we have to wait and see if Churchill Downs gets added business from its sponsorship of the Wood Memorial.  It is beyond me why NYRA would allow Churchill’s advance deposit wagering platform to sponsor NYRA’s signature race of the spring.  Yes, I know it is more tasteful than “The Kentucky Derby Presented by Yum!,” but is not NYRA competing ADW Rewards an important vehicle for increasing revenue and fan interest in the its product?

At least there is progress on increasing revenue.  I am not sure that jacking up admission  and ticket prices should have been the go-to option, but this metric will be realized provided there is not a further decline in attendance because of it.  It does, however, run counter to what Kay likes to refer to as the “guest experience,” even if it will help him get the bonus.

The reprivatization effort is not one of Kay’s goals?  It has been almost two years since Governor Cuomo took control of NYRA, supposedly as a temporary step to come up with a plan to return the racing franchise to private control.  The plan to do that is due a year from now.  Yet there has been almost no public discussion of this crucial matter at NYRA’s Board meetings, let alone any sense of specific ideas.

While the above metrics would suggest that Chris Kay needs to show substantial progress in order to achieve his $250,000 bonus, I am not sure a betting person would wager against NYRA’s Board doing a complete whitewash of his performance and awarding it.  There is a reason they refuse to provide his contract.  Their rationale for doing so is contrary to all relevant court decisions and a directive from New York’s Committee on Open Government, and it must be assumed there are some very embarrassing details in it.

Clarification:  This post has been updated to reflect that training fatalities occurred during training hours, not necessarily on separate training tracks.