- Yesterday, I was standing at Aqueduct in shorts. Today, it's freezing, and I'm at work anyway. Yes, the life of a freelancer is no holiday on the holidays. Need to earn some money to churn through those windows.
Thursday's daily update from the Albany Law School's Racing and Gaming Today contained an attachment regarding NYRA; specifically, the gruesome financial details of the association's 12 Months of Bankruptcy. This ain't pretty. According to the report, over the period from November of last year through this past October, NYRA has lost $29,298,000.
During the six months that NYRA raced principally at Aqueduct, (November – April) NYRA lost approximately $32 million. When NYRA raced principally at Belmont (May – July and September – October), NYRA lost nearly $12 million.(Please email me privately if you are interested in seeing the entire document.) No matter how you spin it, and whether you blame NYRA, OTB, Albany, or Dick Cheney, this is just grim. And the most depressing part of it, to me, is this: Even if tomorrow, Eliot Spitzer and Joe Bruno appear together (!) to make a triumphant announcement of a franchise deal, complete with smiles and back slaps, with Bruno going "Yeah, Eliot's not such a bad guy" and Spitzer declaring that he was just kidding about the f------ steamroller stuff and promising that he'll be on hand this Wednesday for a ceremonial ribbon-cutting for the inner track season, without any changes to the state's business model for racing, what is possibly going to change? Slots are still at least a year away - and, by the way, Spitzer hasn't even named a slots operator yet, as he was supposed to do a month ago - on-track attendance and wagering will still be dismal, and NYRA will probably lose another $30 million in 2008. Will the state's bailout be able to pay for that, in addition to covering all of the existing debts? The question of consolidating OTB with the track operator has still only been addressed peripherally, mostly due to Mayor Bloomberg's statements about NYCOTB last week.
Yet, during the month of August when NYRA raced at Saratoga, NYRA’s earnings were $14.659 million.....In short and oversimplifying somewhat, Saratoga makes $20 million, and the rest of the operation loses $50 million.
Now as bad as the financial picture looks, there should be little doubt that it has been made worse by the existing bankruptcy litigation. The costs of the bankruptcy litigation and the associated costs of reorganization have to be increasing NYRA’s loss by at least several million dollars. (This would likely mean that the Saratoga season makes in excess of $20 million.) This, of course, places the State of New York, in an especially awkward position. It is making up the costs of NYRA’s losses, it is NYRA’s largest creditor, and it is the defendant in NYRA’s litigation in bankruptcy against Governor Pataki. So the State is financing all sides in NYRA’s bankruptcy litigation.
If one of the other, for-profit bidders were to be awarded the franchise, then the state would be off the hook as far as covering losses - in theory anyway. However, the fact is that the operator would still be losing money on racing, and, for-profit companies focused strictly on the bottom line as they are, we'll end up paying for that eventually anyway, whether in the form of increased takeout, or appeals for regulatory relief in the form of less slots money being earmarked for purses, infrastructure, or taxes meant for education. The fact is that none of the bidders have ever really suggested any sensible ideas as to how to improve the racing business, Capital Play's silly concepts of giant signs, beautiful fences, and on-track singles bars notwithstanding. The only real help will come from Albany in the form of allowing the operator to retain more of the vast sums that are wagered in the state off track. Unfortunately, our elected officials, particularly the Republicans, are currently engaged in petty politics and retribution and too busy to attend to important issues, of which racing is of course only one.