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Friday, February 20, 2009

Watching Nothing

Thanks as always to the Watchful Horseman, keeping his watchful horseman's eye on the nothing happening with the still-mythical racino at the Big A.

And here's the link to Jerry Bossert's item in the NY Daily News today. As noted by Mr./Ms. Anonymous and by Steve Zorn, Senator Eric Adams, the newly appointed Chairman of the Senate Racing, Wagering and Gaming Committee, has no experience in racing that we know of, and his statement does indeed sound straight out of the governor's PR machine. And one could say that the senator reveals his ignorance of the subject when he cites the "partnership between NYRA and Delaware North" that he's so excited about. In fact, there is no actual partnership between the two other than the percentage of revenues that Delaware North will be statutorily obligated to turn over to NYRA when and if the facility is up and running. The company was selected by the governor, and any negotiations which may or may not be currently going on are between Delaware North and the state. Makes one wonder if the Chairman, who, as mentioned, has recently been in the news on other matters, has even a basic understanding of the proposed arrangement.

- New all-time lows today for the stock of Magna Entertainment in the wake of the collapse of the complicated spin-off plan that would have spared the company from having to repay its massive debt to controlling shareholder MI Developments next month. I tried to decipher the plan in this post last year. Matt Hegarty of the Form sums up the mountain of red ink.

Magna's most recent balance sheet lists $265 million in accounts payable, $71.9 million in short-term debt, $379.3 million in long-term debt, and $112 million in "other liabilities." It has lost $500 million over the past five years, and efforts by the company to raise money by selling tracks and structuring partnerships in its marquee tracks have failed.

Magna officials did not return phone calls Thursday.
Maybe their phones were turned off. The National Post of Canada ran the headline Magna Entertainment's race may be run.
That plan disintegrated this week after MID said new debt financing for the deal was "unlikely" to be found, given "current global economic conditions [and] the continued disruptions in the financial markets."

As a result, US$274-million in outstanding loans that MEC owes MID will be called in next month, potentially triggering a feeding frenzy among MEC's other creditors.

If it is unable to repay that sum alongside an outstanding balance on a US$40-million credit facility to an unnamed Canadian chartered bank, "substantially all of its other current and long-term debt will also become due on demand," the company said.
MEC, the largest owner of horse racetracks in North America including Santa Anita in California, said negotiations with MID are continuing, which may include an extension on the repayment date of Mar. 20. [National Post]
Maybe Frank should put a call in to John Malone of Liberty Media, who, having rescued Sirius XM from a looming deadline for debt repayment, could also throw a lifeline to Frank and finally put HRTV on his DirectTV so we can FINALLY WATCH SOME DECENT RACING AROUND HERE instead of watching NOTHING on TVG!!!


Anonymous said...

I wonder if Delaware North is in line behind Ratner who was recently turned down in his attempt to use federal stimulus money for his stalled project with MTA at Atlantic Yards.

I can hear the cries of DelNorth; Credit markets seized up on us, we'll put thousands to work on this shovel ready project, and the state will get rich once the gaming hall is up and running." So will Delaware North if it doesn't have to fork over the $370million that it agreed to pay the state! Queens community groups should stand up against money going to a private project that allegedly had funds committed for the agreed upon highest upfront fees that were the primary reason DelNorth won the bid. Why DelNorth doesn't just get broomed aside I'll never understand. Standing by a non-performing New York based company has gone way to far.

Anonymous said...

So if BetFair paid $50M USD for TVG, which assumed no debt was much larger in market penetration, revenue and profits then HRTV is by a significant amount on each point, does that mean Magna's half-stake is worth at best $10 - $15M or one Green Monkey?

If only the NTRA was interested in moving towards having true marketing control and had the cash.

Anonymous said...

Too bad the DeFrancis hook into Laurel Park slots profits queried any real bid by Magna in MD.

There are some real fine horse folk in MD getting sold down the river if Magna fails as a racing company as it will be at least 2012until any slots revenue helps the purses, even if coming from places other than Laurel Park.

Anonymous said...

Even the Whitney's Are Broke!!!

SARATOGA SPRINGS — The Whitney Gala, a sure sign of the racing season each August, won’t be held this year.

“We felt we need to be sensitive to what’s going on with the economy,” John Hendrickson, the husband of Marylou Whitney, said Wednesday. “In light of the downturn we thought it would be in poor taste to do an extravagant party.”

Instead, he said, they would continue their focus on improving the lives of the backstretch workers. Last summer they were involved in a program that provided more than 6,000 Sunday dinners for the workers and their families. “That really made us feel great,” Hendrickson said from their Saratoga Springs home.

The invitation-only Whitney Gala has been a local tradition since 1959, which Marylou and then-husband, the late Cornelius Vanderbilt Whitney, originally held at Siro’s restaurant near Saratoga Race Course, on the eve of the Whitney Stakes. For decades the party has been in the Canfield Casino in downtown’s Congress Park, where onlookers gather for Marylou Whitney’s grand entrance, based each year on a different theme, and to watch as guests arrive.


Anonymous said...

"And one could say that the senator reveals his ignorance of the subject when he cites the "partnership between NYRA and Delaware North.."

Does anyone besides me think that the Senator actually committed a great Freudian slip? Some of the erudite commenters here have alluded many times to the behind-closed-doors insider deals that might have been struck, eliminating the transparency of a fair RFP process for the franchise in the first place. W

Anonymous said...

No, I think the Senator was simply unaware of the perception problem when he honestly mentioned what he knows or has been told, and that is a "partnership between NYRA and Delaware North." As mentioned, all erudite (great word!) commenters, have linked the NYRA and DelNorth together as a team for some time now, even before the racing part of the franchise was finalized. DelNorth left Empire Racing after promises made in some dark room that it would be the favored bidder of the NYRA for the gaming portion of the franchise at Aqueduct. Recall the language in the original Spizer MOU, giving the NYRA as much influence when selecting a gaming operator as the State.

The whole deal stinks! Maybe investigators are having another look at the entire franchise award process and that's why nobody can committ to anything?

Anonymous said...

Can anyone confirm if the rumor is true that Stronach is close to a deal to sell Santa Anita Park to a group of foreign investors? The only thing I have seen is reference to Frank being in California last weekend with a bunch of attorneys.

Anonymous said...

Watchful Horseman

Yes, agree, this bears more monitoring.

Is Adams hinting that, The Governor is going to designate Aqueduct as a "shovel ready" project under The Federal Stimulus Program, just signed by President Obama ??

Is this the way, they will proceed with Delaware North?

Thereby using Federal money and waiving the requirement for the $370 million up-front Aqueduct payment.

The Governor stated clearly, that he chose, Delaware North, because of their (enormous),
'Up-Front' payment.

One side of me says, after years of related sagas, who cares, just get monies through to NY racing sector & Queens community, but another says, obviously, lawsuits would then have to fly, from the other bidders -
but if this happens…then, no-one gets anything, until prolonged court hassles again, run this project.

Must also admit, not really ethical, giving DelNorth monies, as they're our damm well, TAX MONIES & DN haven't paid, anything upfront.

Be different, if they requested, band-aid, short term monies, had previously paid their promised upfront payment & were already, fully operational.

Delaware North Developer, Don Peebles, (who is based in Florida & has unfortunately, never completed a project in New York), was all over TV this week, promoting, The Obama Housing Stimulus Program.

Peebles is known to be a very large fundraiser, for President Obama and other African American politicians.

A comparison maybe tendered, with Developer, Bruce Ratner / Atlantic Yards Project -
he still has yet to pay, the $100 Million, he owes to the MTA, for purchasing the land.

Yet has lobbied hard for allocated federal stimulus funds, fortunately just turned down by the MTA.

BUT, he still has a good shot, at obtaining some of the federal pork, directly through Gov. Paterson.
A Paterson spokeswoman said the governor is still examining whether this project warrants stimulus funds, adding there's a lot of competition.

A comment states, could it be possible that Paterson will also bail out Ratner, but not our Queens hospitals?

Alan - the queenscap comments on this, make LATG comments, seem Saintly.

Anonymous said...

Watchful Horseman

In answer to 8:41 AM Anonymous said... "And one could say that the senator reveals his ignorance of the subject when he cites the "partnership between NYRA and Delaware North.."
Does anyone besides me think that the Senator actually committed a great Freudian slip?

Yes - seems to me that the new 'boy', on the racing block Senator Adams, is combing DelNorth & NYRA, as a confirmed package, only trouble with this is.

If/when, DelNorth goes down, they will now take NYRA, in it's existing format, with them, if this pact is confirmed.

Then, the Franchise Oversight Board, can deem NYRA in default.

To my knowledge, no actual worthwhile Aqueduct agreements, have been set in stone.

I would like someone from NYRA, to clarify this confirmed DN pact, as I would be more than surprised, if they concur to Senator's Adams, public proclamation

Anonymous said...

The Watchful Horseman has been busy. Intriguing posts! Speaking of the NYRA, what was the result of that meeting held December 22nd with the Franchise Oversight Board run by Laura Anglin, and Posio and Kehoe from NYRA? Shortly thereafter, NYRA CFO Posio just sort of disappeared with no confirmation of her being fired or resigning. The FOB asked for monthly operating statements from the NYRA and a line by line description of the 2009 proposed budget that was not satisfactory to the FOB. The FOB hasn't even met, at least publicly announced, since the December meeting to follow-up. Maybe State Comptroller DiNappoli is having a look at the organization's post bankruptcy balance sheet as he is permitted to do so at any time for any reason? Hayward, Duncker and the NYRA have gone pretty quiet in the last couple of months, leaving breeders and horsemen with some real uneasy feelings.

Alan Mann said...

Ms. Posio did leave NYRA under unclear circumstances. No meetings of the Oversight Board since then that I know of.

Anonymous said...

seems there may be two explanations for Ms. Posio's going away; either she was not a very good CFO and her math skills were poor so she got fired, or she was being instructed by other more senior executives or teh board to put numbers to paper that didn't reflect reality, so she hightailed it out of there and is cooperating with interested parties.

If for any other reason, i think we would have heard.

Anonymous said...

Watchful Horseman

24 Feb'09 - various reports coming throu'

Gov Paterson's office, announcing, Belmont a goer.
And Delaware North, now publicly stating, they want Belmont Legislation passed, to alter the VLT rates changed before the 31 March, this year ! or they don't pony up their invisible Aqueduct dosh.

Perhaps a face saving way, for Delaware North, to withdraw from Aqueduct, through the backdoor, from whence they came, for if such legislation is passed, other bidders will/must have lay-down mazure to sue…
& everyone goes back to court, nothing happens at Aqueduct in the short/medium term..
prthaps also, a face saving exercise, for Gov Paterson, until electionssss, which seem to be already, higher on his agenda

Assembly Speaker Sheldon Silver (him, of many 'chit's), somehow, will suddenly now agree, to this legislation, especially before the 31st of March - THIS YEAR??
It will be fitting, April Fools Day, the following day..

Anonymous said...

Watchful Horseman

The NY Times, 21st Feb - Charles J. O’Byrne, the former top aide to Gov. David A. Paterson whose resignation amid a tax scandal last year destabilized the administration, will return to help oversee the governor’s 2010 re-election campaign, the governor’s Paterson's office said on Saturday.

The person, who spoke on the condition of anonymity in order to discuss decisions that the administration had not revealed publicly, said it was possible that more top positions in the governor’s cabinet could change hands in the coming days and weeks.

Anonymous said...

Even if DelNorth thinks it is entitled to "franchise protections" any increase in percentages for them at Aqueduct should not occur until Belmont Park is up and running VLT's. Until such time, DelNorth should put up the $370 million as committed and if in 2015 Belmont has VLT's, their percentages at Aqueduct change then. Anything else would be a poke in the eye to the other bidders that played by the rules of engagement, spending millions and millions, perhaps with no chance of ever winning if this thing was "fixed" from the get go.