By NICK KLING
The Saratogian
The New York Racing Association (NYRA) faced a cash flow shortfall which culminated in May.
It was brought on by the on-going recession nationwide, a failure of state leaders to solve the question of who would run a video-gaming Racino at Aqueduct and the bankruptcy of New York City (NYC) OTB, which currently owes NYRA approximately $20 million.
After a period of what appeared to be inaction in Albany, NYRA received a line of credit from New York State to quell the crisis.
Recently I put a series of questions to NYRA President and CEO Charles Hayward. Hayward graciously sat down for an extended interview last week and provided answers. Some of these queries were covered during the NYRA press conference June 28, and they are included here as well.
Kling: NYRA has gotten a $25 million 'loan' from New York State. Does that mean the Saratoga season, and the rest of the 2010 racing year, are safe?
Charlie Hayward: "We're safe through Saratoga, into Belmont. I am making some assumptions that we're going to solve some portion of (the NYC OTB) problem. If we do, we'll easily get through the year."
NK: NYRA has a franchise agreement with New York State which guaranteed you VLT (Video Lottery Terminal) revenue or a loan if VLT revenue was not available. Why was it so hard to secure this loan?
CH: "(During the week of Nov. 17 through 20, 2009,) we went to meet with the Budget Director, representatives of the Governor, and staff members of Assembly Speaker Silver and Senator (Eric) Adams, head of the racing committee. We brought the franchise agreement ... (and) gave them cash flow, which showed we were going to run out in the May-July (2010) time frame.
"The Budget Director was one of the first people who (recognized) our May to July problem. He said 'I have a December (2009) problem, so I wish I had your problem.' No one (in State government) ever said, 'We don't have this obligation.'
"As is often the case, things come down to being addressed at the last minute. There were a lot of moving parts, and in the end it got done, I think, in the right way."
NK: A follow up — why was the press and public opinion so anti-NYRA on this issue? Why was the loan frequently called a "bail-out" instead of an obligation owed by New York State?
CH: "Most of the people who cover racing are political reporters. I think their reporting constantly referred to the bailout, the bailout, the bailout. The truth is, whether you like horse racing or not, you really want to get VLTs (video lottery terminals) up and operating at Aqueduct because that is $300 million a year to the state. It was frustrating to us."
NK: Will Monmouth's 'Million Dollar a Day' meet hurt Saratoga? Will owners and trainers forget the prestige of racing and winning at the Spa?
CH: "(Monmouth has) been open since the third week in May. I look at their overnights very carefully. I look at their PPs (past performances) very carefully. I look at every horse — where did he race last.
"Very few horses at Monmouth are running out of Belmont, few horses are running out of Saratoga. Through (June 27) our average field size (at Belmont) has gone down ... about six and one-half tenths (0.65) of a horse.
"Our overall (wagering) handle is down 3.49 percent ... but if you take out the $15 million (decline on Belmont Stakes day 2010) we're actually year-on-year (even with 2009) on average daily handle.
"Saratoga is really three things. It is two-year-olds, it's turf racing, and it's stakes racing. (Monmouth) put no money in their stakes program, virtually. And they've had a hard time filling those races.
"It's not a scientific analysis, but from looking at the results of their racing, looking at who's running down there, looking at the overnights when they come out and the PPs ... (the impact hasn't been significant yet)."
NK: Will NYRA have trouble filling races at Saratoga and revert to lower-class events and restricted claimers?
CH: "There is a real horse shortage in the country right now, which is a reflection of what is going on in the economy. We had 150 trainers file 3,000 stall applications (for 1,800 available stalls). Nevertheless, I think we are going to see more claiming races at Saratoga than we've seen in the past."
"I think the statistic which perhaps underscores this best is this: (Trainer) Gary Contessa has had the most horses entered (to race) at NYRA over the last three or four years (than anyone else). Last year at this time Gary had 120 horses. Gary Contessa today has 55 horses.
"But having said that, we're going to move on and have a great meet."
NK: Recently there was an incident where a thoroughbred formerly trained and raced at NYRA was rescued from an apparent 'kill' auction. Did NYRA withhold pertinent information about the investigation ... because the trainer involved is the brother of a NYRA executive?
CH: "We conduct investigations all the time on issues of house rules. We have investigated other issues associated with horses going to slaughter. All of that information is kept internal.
"We do probably 50 to 60 investigations a year on house rules, with about a half-dozen being in-depth like this one. We (don't) publish (these reports) because we just don't do that.
"These guys (in the most recent investigation) never sold the horse. They didn't get a nickel. We felt they weren't in violation of the rule (prohibiting involvement in horse slaughter)."
In a future column we will address other questions which we did not get to today.
Nick Kling is a handicapper and columnists for The Saratogian. His column appears on Tuesday, Friday and Sunday.
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