NYRA Budget for 2014 Calls for Hike in Fees
The New York Racing Association is finalizing a "fresh look" budget for 2014 that will hike fees imposed on simulcast partners and raise prices for racetrack admission and parking while cutting a number of expenses, including money saved by ending training at Aqueduct Racetrack during non-racing periods at the facility.
"We're doing our best to try to perform on a break-even basis," NYRA president Christopher Kay told a group of state regulators Dec. 2 meeting.
Kay did not immediately reveal the amounts to be raised by hiking fees imposed on those taking NYRA's simulcast signal. "They may not like it. I'm sure there will be some opposition," Kay said.
Kay said NYRA's 2014 budget, expected to be approved by its board the week of Dec. 2, will raise general admission prices at Saratoga Race Course and Belmont Park from $3 to $5 and clubhouse admission from $5 to $8, levels he said are comparable to other major tracks in the country. He said entry prices, which do not affect free admission at Aqueduct, have not been raised at Saratoga and Belmont since 2005.
Robert Williams, chairman of the Franchise Oversight Board, which monitors NYRA's finances, questioned Kay about raising prices after NYRA saw a drop in attendance at Saratoga this past summer despite major expenditures on marketing for the track's 150th anniversary.
Kay said NYRA will be making a number of improvements at the tracks to enhance the experience of patrons, including a new facility at Saratoga and improved technology to view races. He called the admission fee increase "modest."
Kay said the 2014 budget envisions an operating profit of $250,000, separate from money NYRA will receive from video lottery terminal revenue at Aqueduct.
"We need to use those (VLT) monies to grow our business" and not just as a subsidy to make up for red ink budgets, he said.
Kay also said NYRA now plans to keep Aqueduct open, answering a question posed by Williams about NYRA looking at the possibility of constructing a synthetic track at Belmont that could be seen by some in the industry as an initial move to making it winter-ready. But, Kay said, NYRA does "need to be prepared" if closing Aqueduct is ever an option.
A NYRA spokeman later said there is no plan to install a synthetic surface at Belmont in 2014 or any other time.
Kay said the budget envisions experiments that, if successful, NYRA will keep in place when it hopes in 2015 to return to a private operation and out from under the authority of a state-imposed board of directors. Susanne Stover, NYRA's chief financial officer, called 2014 "an important year" for NYRA during the last scheduled year of the state running Aqueduct, Belmont, and Saratoga.
While Kay had been hoping to use the VLT revenue to grow NYRA's long-term business, the racing entity is facing two major expenses–pension costs and a federal income tax liability–that will eat up that revenue in 2014.
NYRA plans to close Aqueduct for training for two to four months a year.
"Maybe shorter, maybe longer," Kay said. He said NYRA will talk with the New York Thoroughbred Horsemen's Association about the plan; the organization has raised concerns that closing for training could hurt pari-mutuel handle.
"We'd have to generate $44.6 million in handle to get those funds," said Kay, who noted that additional barns are set to be built in 2014 at Belmont to handle horses now kept at Aqueduct when that facility is dark.
On a year-to-date basis through three quarters in 2013, NYRA's net revenue totaled $122 million, down 1% from the same period in 2012. NYRA officials attributed the drop primarily to fewer race dates.
On-track attendance was off 9%, due, in part to declines at the Saratoga summer meet and for the Belmont Stakes (gr. I). Operating expenses were up 4%.
NYRA said it generated 21% of the nation's Thoroughbred racing handle. Aqueduct's VLT casino, meanwhile, had a daily win per machine of $433, up from $371 during the first three quarters of 2012.
Williams, the state regulator, called it "a little odd" that Saratoga saw an attendance drop when NYRA had a major marketing campaign associated with the track's 150th anniversary. Kay said NYRA next year is planning to broaden the marketing outreach, which he said this year was heavily tilted to attracting local patrons, to an area between Boston and Washington, D.C.
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