NYRA Board Meets in Saratoga

Chris Kay | Mike Kane

By

There was mostly good news delivered Wednesday during the meeting of the New York Racing Association's Re-Organization in Saratoga Springs. N.Y.:
Business was been remarkably strong during the opening two weeks of the 40-day Saratoga meet.

The Belmont Stakes and Stars and Stripes programs NYRA exceeded budget expectations and produced positive results for the second quarter.

However, NYRA's racing operations lost $6.1 million for the first half of the year. It is $1.2 million more than was lost during the same period in 2014. Harsh winter weather which forced 12 closings was blamed for the losses.

NYRA President and CEO Chris Kay said that he expects that the association will finish in the black for the second consecutive year.

The board's compensation committee announced that NYRA's administrative staff will receive three percent pay increases for 2015 and that Kay had qualified for his $250,000 bonus. The three-percent raise pushes Kay's base salary to $318,270 and his total income from NYRA to $568,270.

NYRA announced recently that it would cap attendance at 50,000 for the Travers on Aug. 29, regardless of whether Triple Crown winner American Pharoah competes in the track's signature event. All reserved seating is sold out and Kay said that at noon Wednesday, 5,867 of the approximately 25,000 general admission tickets were still available. Kay estimated that all tickets will be sold by the end of the week.

Trainer Rick Violette, president of the New York Thoroughbred Horsemen's Association and an ex officio member of the board, said that the actual number of people at Belmont Park on Belmont Stakes day was approximately 12,000 below the announced sell-out crowd of 90,000.

The trustees met at Holiday Inn on what was another beautiful, sunny summer day in upstate New York. Michael J. Del Giudice, vice-chairman of the board, ran the meeting. Kay reported on increases in year-over-year handle numbers at the Belmont Spring meet and quickly turned to Saratoga.

“We have hit the ground running at the Spa,” Kay said, and reported that through the first 15 days of the season on Sunday, the on-track handle was up 18.7 percent, all-sources handle was up 19.8 percent, food and beverage revenue climed 25.6 percent and merchandise sales were up 27.4 percent.

Kay said that paid attendance was 423,126. That figure includes the approximately 8,400 season tickets sold that NYRA counts every day, a total of about 126,000.

“The success of this year's meet to date is due to a number of factors, including world-class quality horse racing, large fields and outstanding weather,” Kay said. “We know the weather can and generally does create certain days when we need to take races off the turf courses, with the corresponding decreases in the field size and wagering on those days. We anticipate that we will have such days during the remainder of the meet.”

Kay noted that field sizes typically drop during the middle of the meet and that business can be expected to soften later in the meet because it closes on the latest possible date for Labor Day, Sept. 7.

“As a result, it is entirely possible that the current double-digit rate of increase in our handle will trend more toward our budget projections, which were purposely conservative,” he said. “All kinds of things can and often happen in horse racing, but at this point in time we feel that we will perform equal to or better than budgeted for the meet. Certainly the start of the meet has been very strong in every respect.”

Kay said that through Sunday, handle was running 17.8 percent ahead of the budgeted handle figure of $612 million.

Board member Len Riggio applauded the strong early business but said that it is important to remember that numbers can be misleading because of the way the meet falls on the calender. In 2014, the Saratoga meet started on the earliest day possible, a full seven days ahead of this year.

“We should all know that the budget for the entirety is one or two percent, not 17,” Riggio said. “The chances are that we'll be giving all of that back because of the misalignment of the weeks. The misalignment is causing us to look a lot better. I don't want people to think that we're hitting a double-digit home run because we're not. Hopefully we'll keep a lot of the increase.”

Riggio said he was concerned that NYRA will face pressure in September from Parx, the suburban Philadelphia track that has scheduled a racing festival featuring large purses.

“I'm simply saying that we're not out of the woods,” Riggio said. “When you look at 17 percent…”

Del Guidice said: “All we're doing is just reporting the figures as they are now. Obviously, we have to keep focused on what we have to do. The point is to keep racing going and do it the right way.”

Saratoga's handle and attendance are spectacular, Del Guidice agreed.

“Hopefully, it will continue at a pace that makes some good sense,” he said, “We're not over-promising or under-promising. We're just stating the facts. The point is that whatever the numbers are is what the numbers are going to be. Our job is to the best possible things to get the fans to the track and present the best possible racing. Period. That's all we're trying to do.”

American Pharoah's run to the Triple Crown provided NYRA with a huge Belmont Stakes day. It has partnered with the New York Thoroughbred Horsemen's Association (NYTHA) to raise the purse from $1.2 million to $1.6 million if the colt starts in the track's signature race, the GI Travers S. Aug. 29. Trainer Bob Baffert has not committed to where the Zayat Stables' colt will run next.

“We should know very soon whether American Pharoah will be racing at our historic Saratoga Race Course,” Kay said.

Andrew Rosen was welcomed to his first meeting as a member of the board, succeeding Charles Wait of Saratoga Spring, who resigned. Del Guidice said that Chris Mara has been selected to join the board. Mara is a senior vice-president of the NFL's New York Giants and a partner in Starlight Racing.

Kay reported that the on-track handle for the 59-day Belmont spring meet of $88.3 million was up 4.3 percent and the all-sources handle of $636.6 million climbed 7.5 percent over 2014. Strong business during the Belmont Stakes festival and the Stars and Stripes Day on July 4 were important components of those increases.

NYTHA President Rick Violette, an a ex-officio member of the board, said that although NYRA officials announced that the Belmont Stakes was a sellout at 90,000, the on-track crowd did not reach that figure.

“I think we had 78,000 or 79,000 who were there at the racetrack,” he said. “Is there a way that we close that gap so where we actually get closer to the target number? Essentially there is a 25% difference from last year to this year when you go from 102,000 to 78,000.”

Kay shook his head as Violette was asking the question.

“I don't believe the 77,000 number is accurate,” he said. “I'd be glad to show you off-line how we do do this. As far as the 50,000 cap is concerned. We're doing the 50,000 on the assumption that almost all of those people who bought season passes will be here that day.”

Violette said the difference in the figures at the Belmont Stakes goes well beyond ticket sales.

“We want them to bet, buy some food and have a good day,” he said. “That 10,000 can be critical.”

Kay responded that the handle figures were the second-highest in history–trailing only the 2014 totals– but Violette countered that if NYRA is going to stay with caps for attendance it needs to do better to get to the target number.

In the second quarter, NYRA's net income of $10.6 million was up 7.2% over the budget figure for those three months and up 9.2% from 2014. The total handle of $691 million was 1.6% above the budgeted number, but down $7.7 million or 1.1% from last year. The net revenue from racing operations of $45.3 million was 2.3% above the budget figure and 2.8% over the same period last year.

On Belmont Stakes day, featuring American Pharoah's quest, NYRA earned $11.2 million of operating income from racing operations. This was $2.3 million higher than budget and $1.4 million higher than last year. The total handle of $138 million was up 31% from the budgeted number, but down $15.5 million, 10.1% from 2014, due at least in some part to NYRA's decision to cap on-track attedance. NYRA CFO Susanne Stover said that NYRA's bottom line was improved by higher interstate simulcast host fees and revenue from increases in parking, admissions, seating and hospitality.

For the first six months of the year, NYRA lost $6.1 million from racing operations. That was $1.1 million better than the budgeted figure but $1.2 million greater, 25.5 percent than last year. The first half figures were adversely affected by the dozen weather-related cancellations. Its net income of $10.4 million for the first six months of the year – which includes revenue from the VLT casino at Aqueduct – was up 30 percent, $2.4 million, from the budget and 16.7 percent from last year.

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