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Thursday, December 27, 2007

Latest on the Franchise

- Sorry for more lousy picks at Aqueduct yesterday, and I'm done picking ponies for the rest of this year. My aides are currently in negotiations with Spitzer, Bruno, and Silver as to whether I continue any handicapping at all in 2008. Matt Hegarty reports in the Form that the three will meet today to discuss the franchise, but I'm not clear as to whether that refers to their staffs, or if the three of them will actually be together in the same room. Introductions may be in order if the latter is the case. Negotiations on a temporary extension are said to be "ongoing."

With no legislation on the MOU planned, NYRA's bankruptcy hearing has been postponed to January. Since the reorganization plan is based on the MOU being passed into law, there seems little point in proceeding at this time.

"We've been having very positive discussions with the folks in Albany to try and help break the logjam that may exist . . ." NYRA's bankruptcy attorney, Brian Rosen, said yesterday. "We didn't want to in any way impose ourselves [on today's meeting] by going forward in the bankruptcy court. [NY Post]
The motion by unsecured creditors - the IRS and the Pension Benefit Guaranty Corp. (PBGC) - for the court to reject the reorganization is based on their stated belief that the MOU will never be passed in a form that will allow the plan to move forward. NYRA's creditors shouldn't be "forced to live with a confirmed plan that can never be implemented," the filing said. The PBGC's motion includes a request to end the plans, which, it says, are 66% funded. This is actually an effort to protect the pensioners.
According to PBGC estimates, the plans have $137.3 million in assets to cover about $208.8 million in benefit promises. If the PBGC becomes statutory trustee of the plans, it expects to be responsible for $59.7 million of the $71.5 million shortfall. [PBGC Press Release] [Forbes Magazine]
However, the company notes that its actions are based on "the likelihood that [NYRA's] racing franchise will not be renewed by the end of the year." Though that may literally be the case, it's more likely that some kind of agreement will be in place by Dec 31, for a temporary, if not permanent extension. I think. [And I should add here that the reorganization plan calls for the pensions to be 100% funded.]

Another creditor, Plainfield Special Situations Master Fund Ltd, is also dissing the plan, but keep in mind that the investment firm is a partner of Capital Play Ltd. It purchased $500,000 worth of NYRA debt in order to get their two cents in, and it's quite likely that it was among the 3% which voted against the reorganization plan.


Anonymous said...

On the face of it seems approximately 5% of the Pension Benefits are at risk, and only if NYRA ceases to exist and the new entity fails to fund the shortfall, highly doubtful propositions as it will surely be a prerequisite of any franchise granted.

Alan, you sell yourself short, any public handicapper would be braggin about 33.3% success rate yesterday with a break even ROI.

John said...

I hope you continue to provide us with your picks, although you might consider putting some kind of warning label on them like "WARNING: ALAN MANN'S SELECTIONS CAN BE HAZARDOUS TO YOUR WALLET.

steve in nc said...

I too have put handicapping on the shelf til next year and perhaps beyond (played conservative and withdrew almost everything from my NYRA account just in case).

But, I'm a little excited about a race at SA this Saturday: Spring Awakening runs in the 7th and I've got a relative in the Tony Award-winning B'way show of the same name. The filly (not my relative) is owned by one of the producers, and she looks like a chalk I don't want to try to beat this weekend. Of course, before you bet her at a short price, remember that one of the musical's big numbers is a song called "Totally F(*&ed."

Have a great new year's everyone, and here's hoping for thoroughbred racing in NY south of Finger Lakes in 2008.

Teresa said...

Just to play the six degrees game with Steve: the guy who sits in the row behind me at the Garden for Rangers' games is one of the producers of Spring Awakening (the musical, not the filly), though I'm pretty sure he doesn't own any horses.

Anonymous said...

Posted on Thu, Dec 27, 2007 9:31 p.m.
NYRA, state agree to extension
Officials say racing won’t be interrupted
SARATOGA SPRINGS — New York Racing Association has agreed to a temporary extension that would keep racetracks operating through

Jan. 23, Oversight Board Chairman Steve Newman said Thursday.

NYRA’s current franchise expires Monday, but state leaders still haven’t reached agreement on the next contract.

The temporary extension was agreed to Thursday between NYRA, the state and a five-member state Oversight Board. Meanwhile, staff for Gov. Eliot Spitzer and legislative leaders continued working feverishly in Albany toward a final franchise decision.