NYRA Projects Surplus; Budget Deferred
The New York Racing Association is projecting a surplus next year, its first since 2000, despite an estimated drop in handle at its three racetracks brought on by the economic downturn.
But regulators Dec. 22 were unconvinced about some of the optimistic forecasts, and deferred approving NYRA’s 2009 budget.
“Given the overall state of the economy and the condition that we find ourselves in, I am a little concerned about the revenue and expenditure assumptions that are contained in the budget,’’ Racing Oversight Board chairwoman Laura Anglin told NYRA officials in a meeting of the panel.
“These assumptions are of significance not only due to the external economic factors that we’re facing that may impact NYRA’s financial performance, but are also important to furthering this board’s understanding of how NYRA is manging its finances on behalf of the state and the entire racing industry,’’ added Anglin, who also serves as state budget director for Gov. David Paterson.
The government board, which has vast say over NYRA’s finances and operations, will not approve NYRA’s 2009 budget until it gets more information about the racing group’s personnel expenses, including a salary structure for its employees, and non-personnel costs for the coming year. The board also wants to start receiving monthly financial reports from NYRA.
Irene Posio, NYRA’s chief financial officer, told the board that NYRA expects $283 million in gross revenues next year and a profit of $2.5 million – its first time in black ink since 2000. Figures for 2008 are not yet available, she said, adding it has been “a very difficult year.’’
Posio projected a 5.5% decline in handle, which she attributed to the nation’s sour economy. She said the figure is below the double-digit fall-off by some of NYRA’s competitors. She said handle for 2008 is going to be off from 2007, partly because last summer’s Saratoga meet was down significantly from a record-setting 2006 meet.
“We believe Saratoga will go back to 2006 levels…but not as good as 2007 levels,’’ she said of projections for next summer.
The financial forecast – a copy of which NYRA, citing competitive reasons, would not provide – shows NYRA not counting on a Triple Crown run in 2009 that could spike their performance. “To be conservative, we have not budgeted for that,’’ Posio said.
If NYRA’s performance comes in worse than projected, Posio said purses would be affected along with operations at the racing group. Steve Newman, a racing oversight board member, raised questions about a sharp increase in NYRA retirement costs – which Posio blamed on health insurance expenses – and a fall-off in its cash flow for 2009. NYRA officials also said they will continue not charging for parking or admission to Aqueduct, an effort begun last fall, because they found it is cheaper than having to provide staff to collect the money.
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