Kay: NYRA Out of the Red
For the first time in 13 years, the New York Racing Association will show an operating profit in 2014, the organization’s chief executive officer Christopher Kay told a meeting of the NYRA Board of Directors Wednesday afternoon at the offices of Governor Andrew Cuomo in midtown Manhattan. Pledging to position NYRA as a “well-run, responsible business” and announcing that they are “headed in the right direction,”
Kay told the Board that while projections for 2014 called for an operating profit of a quarter-million dollars, the true figure–based on numbers through the month of October–would be closer to six times that amount.
“As you may recall, we called for an operating surplus of $250,000, exclusive of the VLT funds, for our operating budget when we came to you last December,” Kay stated to the Board. “I’m pleased to be able to report to you that we will do much better than that, perhaps six times better than that, with a projected surplus in the neighborhood of $1.5 million for 2014.”
NYRA Chief Financial Officer Suzanne Stover, who was celebrating her birthday Wednesday, explained that losses over the winter at Aqueduct, owing to poor weather, were offset by an increase in the fees charged for simulcasting, reduced labor expenses and an uptick in revenue from the revamped Belmont Stakes Day, which featured the Triple Crown attempt of California Chrome and several other Grade I events in addition to expanded entertainment offerings.
Kay went on to suggest that based on the 2015 budget, which is to be approved at the Board’s next meeting Dec. 3, operating profits are projected at $2.1 million for next year, while expectations are that the corresponding figure for 2016 could be as high as $3.2 million. Kay also announced that the 2015 budget would be structured on a six-day racing week at Saratoga from July 24 through Sept. 7, 2015, and also that there would be an effort to expand advance deposit wagering beyond the state borders.
Board Chairman David Skorton and member and prominent owner Michael Dubb lauded Kay for leading NYRA into the black. Dubb deemed Kay’s efforts “Herculean,” adding that the state of New York is seeing increased foal crops and the tracks are staging bigger race days, including for horses bred in the Empire State. “If we stay where we are now, we’ll open several lengths on the competition,” Dubb commented. In return, Kay praised the panel, stating, “I appreciate all of the contributions you’ve made, both individually and collectively. Governor Cuomo has elected a talented board.” Not all of the board members were entirely enamored with the financial outlook. My Meadowview Farm’s Leonard Riggio called into question the relatively narrow operating profits, labeling the $1.5 million number “thin ice” relative to the overall budget. Seemingly unconcerned, Kay retorted, “We aren’t a grocery store.”
In the other major piece of news to emerge from the meeting, Kay reported that, after consultation with a variety of industry stakeholders, that the transitional board currently in place would not make any long-term decisions on real estate holdings–that the decision would “be the responsibility of the next board.”
Kay reported on and showed a video of approximately $14 million in renovations other capital improvements made at Aqueduct over the last 18 months.
The first portion of the meeting including a discussion of the legal and governance structure of a new NYRA when it emerges from re-organization. In his comments to the Board, Senior Vice President and General Counsel Joseph Lambert presented the requirements of the applicable statute as well as several thoughts on how NYRA should be structured and governed. This includes a smaller board than the current board which encompasses 17 members, the inclusion of the NYRA CEO to the new Board, consideration of term limits for Board members, in addition to possible frameworks for committees.