The New York Racing Association's projected $2.1 million surplus for 2015 will be driven by attempts to increase field size by possibly reducing the number of race dates and cutting expenses, including closing barns at Aqueduct Racetrack for five months when the track is not racing.
NYRA president Christopher Kay believes any problems over shuttered stall space will be alleviated by the addition of 250 new stalls at Belmont Park by the end of August 2015. Officials told a state oversight panel that the Aqueduct barn space was closed for six weeks in 2014 as part of a budget-cutting exercise.
Without offering specifics, Kay also told the Franchise Oversight Board Dec. 1 that field size declines are pushing NYRA officials, like track executives elsewhere in the country, to look at reducing the number of races or race dates to maintain or boost the number of starters per race. NYRA chief financial officer Susanne Stover said field size is "one of the most defining metrics of our business,'' when it comes to the impact on handle.
The presentation by NYRA officials to the state panel came a couple days before Kay and his team are scheduled to brief the NYRA board on the 2015 budget for the racing corporation, which until the end of next year is operating under the control of a board dominated by New York state government appointees.
Stover said NYRA also is looking to boost prices for group sales and parking and launching additional, unspecified improvements to enhance ADW operations and sponsorships.
NYRA projects net income in 2015 of $25.3 million and plans to budget $36.2 million in various capital expenses for improvements at the tracks.
NYRA officials said they are not including in the 2015 budget any financial impact from new commercial casino expansion in upstate New York. The state on Dec. 17 is expected to select up to four locations for the new full-blown casinos with slot machines and table games. "We don't know when they will be operating," Kay said of the casinos.
Kay said NYRA has had productive conversations with state officials about the need to reduce the statutory number of days NYRA must annually race at its three tracks. He did not offer a specific proposal, but said the field size is declining chiefly because of declining foal counts and, at times, bad weather.
"It's a challenge," Kay said of overall declining field sizes. He said there have been talks with trainers and owners, as well as state Gaming Commission officials, about reducing the number of race dates at Aqueduct, a move he said would be prudent in the face of smaller field sizes. Any reduction would need the approval of the state Legislature, and Kay said formal talks with lawmakers have not begun.
Franchise Oversight Board chairman Robert Williams told Kay that NYRA officials the past two years have blamed declining field sizes chiefly on different equine drug rules in New York compared with competing states.
Compared to previous Franchise Oversight Board meetings, the Dec. 1 session by the state panel with NYRA was almost cozy. Steven Newman, who has sharply criticized NYRA operations in the past, smiled often during the meeting and praised NYRA officials after Stover presented the corporation's third quarter financial results that showed operating income during the period of $16.5 million, up $5.4 million compared with the same period a year ago.
"Lots of progress was made and one can see it in the financial results,'' Newman said.
"Thank you for the compliment,'' Kay responded.
Later, Newman praised NYRA for providing him with written information he sought last summer regarding a $250,000 bonus given to Kay. "I appreciate receiving it and I thought it was very thoughtful on the part of the (NYRA) board and the CEO,'' Newman said. Later, Kay praised Newman's line of questions, and said the process is underway for NYRA and the state oversight board to be working together."
And another problem Newman raised in the past: the failure by KPMG, NYRA's outside auditor, to appear before the franchise oversight board, disappeared at the end of the meeting when Williams said the company will meet with board members about NYRA's finances.
Kay also said NYRA is considering a modest increase in season passes at Saratoga Race Course for grandstand and clubhouse seating. Asked by a franchise oversight board member about introducing some sort of tiered stall charge for barn space at Aqueduct, Kay called it a great suggestion that will be examined by NYRA. Neither the board member or Kay were specific about any sort of potential pricing plan.
Four years after the New York City Off-Track Betting Corp. was shut down, Williams also used the Dec. 1 meeting to ask how NYRA is trying to access the New York City market to make up for that betting giant's closure. Kay said NYRA officials have been busy on a number of fronts, including devising a plan to emerge next year from its three-year state control period, and that he hopes the New York City market issue will be addressed again in the first quarter of next year. "It's a work in progress,'' he said of efforts to have NYRA pick up business opportunities lost when NYCOTB closed in December 2010.