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Tuesday, May 04, 2010

D-Day Approaching

You may have noticed amidst all of the Derby hoopla this past weekend that Tom Precious posted a story on regarding the seriousness of NYRA's cash flow situation. In short, the doomsday scenario that was presented to the NYRA board last week is that the association will run out of cash (considered as such when it has less than $5 million on hand) by late June should the state legislature fail to pass a bill, introduced by Governor Paterson, which would provide NYRA with $17 million, to be provided from the $250 bond issue for the racino construction, and to be repaid to the eventual VLT operator. This scenario also assumes that NYC OTB will suspend or defer payments from non-NYRA races (which totaled some $8.8 million to NYRA in 2009) as Sandy Frucher said it would do when he announced OTB's sudden and miraculous recovery from the brink. OTB was to provide the State Racing and Wagering Board with its latest restructuring plan last Friday.

I got an update from Charles Hayward at Belmont on Derby morning, and he pointed out that NYC OTB pays the out-of-state tracks promptly in 30 days by contract. So it's the in-state tracks that OTB has sucked the life out of all these years which will bear the pain. That's a joke to be sure, but NYRA's current status is no joke at all. Hayward expressed confidence that the bill providing the $17 million loan will indeed pass. But it's certainly not very comforting to know that the fate of the state's thoroughbred racing industry is in the hands of the New York State Legislature.

The DC-37 union representing the rank-and-file workers at OTB, which helped kill the OTB bailout bill when the legislature would not approve severance and pay raises promised by management, has informed the legislature that they will oppose any NYRA bill which doesn't address those issues, even though the bill doesn't directly involve OTB. I guess they figure that any leverage they retain is helpful, though this union doesn't seem to consider the downside to their members in the case of their tactics leading only to stalemate. And while the measure was introduced in the Senate by Sen Eric Adams, it has yet to be taken up by the Assembly. "They are awaiting some tax opinions on exactly how the $17 million could be used by NYRA to be certain that the bill works for NYRA. I think that we will have clarification on that in the next few days," Hayward said.

As I've steadily maintained, I just don't believe that the legislature will allow NYRA to cease operations. In the NY State Racing and Wagering Board's 2008 Annual Report, it was estimated that, should NYRA close, close to $40 million paid annually in tax payments to the state directly from NYRA and from all of the OTBs' handle on its races would cease; that in addition to over $45 million in payments to thoroughbred and harness breeders, and to local governments. Add up the numbers; it just doesn't make sense, even in an institution which doesn't have much, and even if OTB wagering on other races would partially compensate, to allow that kind of money to stop. Plus, Saratoga is looming, and that is very much a bipartisan issue.

And besides, and once again because it bears repeating: the state has a written obligation to provide funding as per Section 2.8 of the Franchise Agreement:

New NYRA and the State agree that, in the event that VLT Operations are not scheduled to commence at Aqueduct on or prior to March 31, 2009, the State and New NYRA shall negotiate in good faith to provide New NYRA with payments necessary to support racing operations and satisfaction of New NYRA operating expenses, including, without limitation, the payment of New NYRA's pension plan obligations, until the commencement of VLT Operations at Aqueduct.
- Well, looks like I was wrong about the TV ratings for the Derby.
Attendance for the Derby was 155,804, according to Churchill, the fifth-largest crowd of all time, while the overnight television rating for a two-hour broadcast of the Derby on NBC rose 1 percent, to the highest figure since 1992, continuing five years of strong growth in the rating figure. [DRF]


El Angelo said...

Does Charles Hayward do anything besides whine and make excuses? I mean, has there been any improvement or advancement for NYRA patrons under his tutelage?

Anonymous said...

El Angelo: Charlie has had much to whine about thanks to those lying, rats jumping ship, a/k/a Albany pols. Charlie Hayward was smart enough to put Chas Waite, Adirondack Trust Big, back on the NYRA Board, according to The Saratogian. There is no way that Saratoga's Mr Big Banker is going to let NYRA go down the tubes prior to the Spa Meet. Expect to see the $17mm, or whatever it is they need to stay open, in the pot soon. /S/greenmtnpunter

Anonymous said...

Alan, if you're going to allow the likes of El Angelo to make comments on your fine blog, could you please provide an ignore function for your readers?

El Angelo said...

Tough words from an anonymous commenter. GMP, I agree that it's unlikely that NYRA goes down the tubes before Labor Day for a variety of reasons, but my second question still stands.

Anonymous said...

Al An, the answer is yes.

Just check the web site, they have done quite well from a new media perspective. Plenty of features not available on other sites.

NYRA Rewards is a pretty good perk for their major customers.

They finally got entries uncoupled this week after fighting for ages with NYSRWB on this issue.

I love the late PP on Fridays.

I personally believe detention barns are the future model for the industry although many horsemen hate them, provides me with some confidence and makes the shippers earn their money.

I believe he has done quite well considering the financial restrictions and there are many improvements in the pipeline if the upstate crooks posing as politicians would just get things moving.

And btw, you do your share of whining on here, instead of NYRA bashing how about providing a suggestion or two since Charlie or others from NYRA obviously follow this blog.

If you have something you would like to see, put it in writing.

Anonymous said...

btw, the immediately preceeding anon comment @ El An was not from the prior El An critic. No one should be ignored or banned.

alan said...

Not quite for the uncoupled entries, but they should be coming after a comment period which ends June 7. Unless El Angelo objects! :-D

NYRA estimates that it will net $7 million annually from that change, which it has been requesting since 2006; plus $5 million for purses. Now, perhaps it can get the legislature to finally allow it to stream its races in conjunction with its online wagering platform.

El Angelo said...

Anon who doesn't want me banned/sent to Guantanamo: thanks for the answer. I don't disagree with your points, my point, more specifically, is that the NYRA brass is supposed to make these kinds of changes happen by using their clout, intelligence and political influence. The uncoupled entries bit is a perfect example: why did this take 5 years? I understand that negotiating with Albany is akin to banging your head against the wall repeatedly, but to me, getting the simple things changed would show real leadership.

You know, you're right--I probably do kvetch too much about NYRA. I will back it up with something in writing on my own blog later this week/month.

Anonymous said...

El angelo, and I probably defend NYRA and Charlie way too much, there are things that could be done right now without much capital outlay.

But Charlie does have to spend way too much time fighting with Albany and NYC OTB, it has to effect managements ability to operate.

Could they do better, yes, I just took issue with your statement that Charlie has done nothing.

Anonymous said...

Another reason to ignore El Angelo,

If instead of making lame and uninformed comments you even bothered to look into the well reported FACTS, you would know that NYRA, Charlie Hayward's NYRA, has been asking the NYS Racing and Wagering board to uncouple entries for, at least, several years.

The bottom line is you know nothing of what you write, and that is why you deserve to be ignored. Whine all YOU want, but the truth is in your pudding.