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Is a buyout the problem or the solution?

Posted by on January 25, 2013

Today’s Albany Times Union has a story about former and current NYRA executives looking for a buyout of their employment contracts as well as payment for legal fees relating to an investigation into ethical violations during 2012.

Charles Hayward, the former President and Chief Executive Officer of the New York Racing Association (NYRA) and Patrick Kehoe, the former general counsel and Senior Vice President were dismissed last May subsequent to an investigation about discrepancies in the monies being taken out for the state. They are seeking money for back pay, as well as a buyout from their contracts. Not being privy to their employment contracts,  I cannot state whether they are contractually entitled to a buy out, however if NYRA had cause to terminate both men then these payments are unnecessary.

According to the Times Union the racing and wagering board is investigating how NYRA overcharged bettors by nearly $8 million until state auditors caught the misdeed in December 2011. The report determined that Hayward and other NYRA personnel knew the association was keeping more from “exotic” bets than is permissible under racing law. Should this finding come back and implicate Hayward and Kehoe, the termination should be upheld without any recourse for a severance because their termination would be for cause base on their actions. Nonetheless, if it shown that either Mr. Kehoe or Mr. Hayward are blameless in this, then there can be an argument for monies to be paid. The article states that the final determination is on hold until the New York Inspector General makes his

The article continues to state that Ellen McClain, the acting CEO and CFO during the period when the takeout was not properly removed, is also seeking a buyout of her contract.  Thoroughbred Trainer Gary Contessa  accurately surmises that someone cannot be completely focused on their present job when they are seeking a buyout and looking elsewhere for a paycheck.

NYRA needs an executive now who’s eye is on NYRA and not their own pocket or the next job. There are significant issues facing NYRA, the least of which is the new board and creating stability for New York Racing. NYRA is facing challenging times as there are issues before it regarding the potential for casino gaming. Additionally there are issues with respect to the lease of Aqueduct and the failure of Genting to provide the necessary cleaning and upkeep for the old Aqueduct. The new dormitories for Saratoga backstretch employees need to be redone and we need help reinvigorating our fan base, just for starters. We definitely need a person who is running NYRA who has NYRA’s, the horsemen, the owners and the fan’s best interests at heart, with the pronouncement that she is looking for a job, it’s clear Ellen McClain is not that person anymore.

New York Racing is in need of someone who can guide the ship. Someone who can stand up to Governor Cuomo and fight for our industry. New Yor racing needs someone who will understand the complexities that running three tracks in three distinct communities along with an ADW facility has and be able to make sure that the product put on the track is deserving of the reputation New York has maintained. It is a hard job with little reward as the owners, trainers and fans all can be difficult to please. It is a job that must be done, however, and one that needs new leadership.

So, is Ellen McClain’s buyout the solution? I hope it is.

 

Todd Engel

 

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