While such public companies as Churchill Downs Inc. (CHDN) and Magna Entertainment Corp. (MECA), sit on the sidelines drooling, the New York Racing Association (NYRA) places itself in further jeopardy this week with a planned auction of some of its high-priced artwork.
The auction on Friday at Sotheby’s places the operators of New York’s three major thoroughbred tracks completely at odds with regulators who insist the paintings that have adorned the walls of the track’s inner sanctum technically don’t belong to the racing association. Therefore, they can’t be sold without permission of the N.Y. Racing and Wagering Board.
NYRA’s top officials, however, can’t wait. They are so desperate for cash that they expect to go broke before the end of the calendar year. And, besides, they said, the paintings were either purchased by the association or were gifts from racing benefactors.
At one end of the dispute is Michael Hoblock, chairman of the racing board, and on the other, Charles Hayward, the former chairman of the Daily Racing Form who became CEO of NYRA earlier this year.
Hoblock insists the sale of "state" property is unauthorized and that it could warrant legal action.
Hayward points out that in past sales of machinery and equipment by NYRA nobody objected.
The NYRA franchise to operate the three tracks, including what will eventually become a racino at Aqueduct, expires at the end of 2007 but because of a number of legal and operating problems that have plagued the operators some politicians have suggested that the franchise be terminated immediately.
Bidding for the right to operate the tracks are the country’s two major track owners, Churchill and Magna Entertainment. A franchise termination would benefit either one or both.