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Wednesday, February 13, 2008

The Money Shot

As a condition of franchise acceptance, the franchised corporation and its predecessor shall irrevocably relinquish any present or future rights that it might have, or might claim, with respect to thoroughbred racing facilities and associated assets located in Queens County, Saratoga County and jointly located in Nassau and Queens Counties whereat running races, steeplechases or race meetings and pari-mutuel betting on the outcome of the same have been conducted, including (a) all the land underlying the racetracks, (b) all improvements thereon and all physical assets thereon, and (c) all assets associated with the franchise and the operation of the racetracks, including, without limitation all rights to intellectual property and simulcasting now existing or hereafter created, and any and all franchise rights or interests in such assets including but not limited to leasehold improvements and interests. The franchised corporation shall take all appropriate action as soon as possible, but in no event later than one hundred eighty days following an order of confirmation by the bankruptcy court to ensure that the state is vested with unencumbered ownership in the real estate for the three racetracks, including all improvements thereon.

19 Comments:

ljk said...

So, the wringing of hands and gnashing of teeth ends.

I feel like Bruno has been tortured pretty good here and other places (especially on Paul Moran’s blog). Doesn’t the final deal seem better than the original MOU?

Restructuring of the NYRA board
More oversight including measurables and regular auditing
Higher VLT revenues for all sectors of the sport
Restructuring of NYRA’s not for profit model

Bruno also supports a couple of additional (IMO) positives that are at least still on the table.

Resolving the dysfunctional OTB model
Additional VLTs at Belmont

A little love for Saratoga’s Senator?

Ernie said...

Talk to us, Alan! In your opinion, what're the plusses and minuses of both sides.

jk said...

From the DRF...Someone is in outer space regarding slot machine revenue.


"Estimates for the revenue from the slot machines vary, but if each machine generates $300 in revenue a day - a conservative estimate for a casino in one of the country's largest metropolitan areas - total annual revenue would be $500 million. Many casino analysts predict that each machine will generate $500 a day."

Anonymous said...

Well, the managed to balance Spitzer's budget.

Have not read it yet, but if indeed the land transfer is immediate you can expect continued inteference from Albany throughout this term in an attempt to undermine the new NYRC so as to get that land into the hands of the Port Authority ASAP.

Constant battle.

Anonymous said...

OK, lets have a little contest.

The reports all indicate a casino operator will be selected within 30 days.

I make the over/under for selection at 150 days, assuming they will want to announce the big news no later than right before the SPA meet begins while gathering as many legal bribes as possible in the interim.

This is legislative heaven, a huge profitable enterprise open for bid with no apparent rules. Let the lobbying begin!!!!!

Over or Under?

Anonymous said...

I can't seem to find the measurables and regular auditing. The measurables are a strict "do be developed later", so who knows what they'll consist of.

The auditing functions seems weakened, not strengthened.

The old 208(4) used to require the Office of the State Comptroller to audit no less than once a year; the new 209, found in section 14, reduces their audit to "from time to time" as requested by the Franchise Oversight Board.

In section 49, the private auditor used by NYRA was charged with reporting on material weakness in accounting, internal controls, and business and management practices. The new auditor is restricted to reporting on these problems only if discovered in the ordinary course of preparing such audited financial statements.

That's a major step backward.

alan said...

>>This is legislative heaven, a huge profitable enterprise open for bid with no apparent rules. Let the lobbying begin!!!!!

Joe had high praise for Capital Play at the press conference. He said something about them helping to turn around racing in Australia, which I believe is completely false.

Anonymous said...

Come on Alan answer ljk.

"I feel like Bruno has been tortured pretty good here and other places (especially on Paul Moran’s blog). Doesn’t the final deal seem better than the original MOU"?

Anonymous said...

Alan, Capital Play is clearly Joe's choice at this moment in time, but you can bet your last dollar that all these guys will be receptive to the right "offer", including old Joe.

He may eventually side with his kid's employer Capital Play but is certainly worldly enough to play the field for as long as he and the others can possibly drag this out.

As for the audit, a standard audit is far more thorough than the limited audit performed under the old agreement. It includes an assessment of internal controls etc.

The Firm can not issue an unqualified opinion without being comfortable with the internal controls in place.

Getnick's alleged role is to implement those controls and serve as internal auditors and general complaint board, a job that could have been done more efficiently and much less costly by hiring a team of five qualified auditors and five former law enforcement officials from the private sector, but hey, politicians have needs too.

alan said...

>>Come on Alan answer ljk.

Heh heh.

Well, I'd have to say that I have no disagreement with ljk here. Don't really know how much he really gained on the board (14 of 25 for NYRA vs 13 of 19 in the MOU). But the horsemen did better, and I certainly have no problem with the additional oversight (as vague as it seems to be). Don't know if he gets credit for the higher VLT revenues for the harness guys. But all in all, he did what he could against a very tough hand and didn't cause any major harm that I can see.

Michael said...

Alan,

I hope this doesn't get lost in the shuffle, but has NYRA fixed or addressed the budget problems that led to the hundreds of millions of dollars in debt?

I mean, after a bailout, if you don't fix your ways, don't you just end up back in debt again?

jk said...

None of the budget problems have been fixed but everyone is counting on the slot revenue as a cure all.

Anonymous said...

Right, Alan, we should all rest easier now that the state has ownership of the three tracks? Or, do you see it as I do, as the state's primary goal in all of this? It will do nothing for NY racing but make it easier for the disgruntled pols in future to finally pull the plug on racing whenever they decide NYRA doesn't live up to the operating agreement. All of this after the state made it impossible for NYRA to turn a profit to begin with. No, I see transfer of ownership to the state as perhaps the worst part of this whole deal but as we all know it just follows the Golden Rule, i.e., he who has the gold rules. In any event, what we all wish to see in the end is for NY racing to maintain and enhance it's leadership position in the industry. Only time will tell. /S/Green Mtn Punter

El Angelo said...

I fail to see a single thing here that will improve things for the fan and/or the bettor. This stinks. Thanks for nothing, New York State.

Anonymous said...

el angelo, I have to agree with you, this is all about the status quo for the customer, no guarantee of improvement.

All we can do is is hope some of the new found money trickles down to improve our everyday gambling experience.

I truly believe that Heyward and Duncher love the game and have improvements in mind, and hope they are enacted. But there are no guarantees.

In fact, while I like having some folks around to add to the ambience, the addition of VLT players will detract from my enjoyment at the Big A.

Anonymous said...

In NYRA's projections, released last November, it called for a break even year in 2008. However, this was based on the gain of approx $15M from the sale of some land at The Big A. Since NYRA's deal calls for them to release all claims to the land they no longer are entitled to the proceeds from the sale(unless it was listed somewhere in that 190 page bill?). Thus NYRA's updated projections should call for a loss of $15M for 2008. If so, when is the date of the 2nd bankruptcy filing? Do the NY Taxpayers know what they are funding?

theiman

alan said...

theiman - I haven't seen anything in the bill that indicates they can sell that land and keep the proceeds. You raise an excellent question about how they're going to get by until the racino opens. And I don't see how they're planning to break even for 2008, even if they were getting that money.

Anonymous said...

208. 4-a (part of §14 of the bill) provides that “As a condition of franchise acceptance, the franchised corporation shall ... convey the parcel near the aqueduct racetrack that includes blocks 11558 and 11560 of lot 1 in queens county to the new york city public school construction authority should such authority desire and commit to purchase such parcel at fair market value.”

This would seem to permit NYRA to retain that property for the purposes of sale. I guess they can retain the proceeds as they do not seem to be directed anywhere. NYRA can use the other properties, subject to a thirty day relinquishment when the Franchise Oversight Board decides they want them back. (part of §206.1)

alan said...

>>208. 4-a (part of §14 of the bill) provides that “As a condition of franchise acceptance, the franchised corporation shall ... convey the parcel near the aqueduct racetrack that includes blocks 11558 and 11560 of lot 1 in queens county to the new york city public school construction authority should such authority desire and commit to purchase such parcel at fair market value."

Nice catch.