by Karen M. Johnson
In a financial statement released by the New York Racing Association March 28, the non-profit organization reported total net operating losses of $34.28 million in 2007. That figure is nearly double from 2006, when total net losses reached $17.83 million.
The total net loss amount includes reorganization items connected to NYRA’s bankruptcy ($7 million) and a one-time tax settlement ($9.3 million). The statement went through the year ending Dec. 31, 2007.
Two significant 2007 expenses – interest on NYRA’s debtor-in-possession and loans from the state’s Capital Improvement Fund ($4.48 million) – will not carry over to NYRA’s new 25-year franchise. Nor will the real-estate taxes that amounted to $17 million in 2007. As part of the agreement with the state to grant NYRA its latest franchise, NYRA has relinquished the land and titles to each of its tracks, Aqueduct, Belmont Park, and Saratoga.
NYRA filed for bankruptcy in November 2006. A hearing is scheduled for April 11 in U.S. Bankruptcy Court to review a reorganization plan filed by NYRA to emerge from bankruptcy.
NYRA’s president and CEO Charles Hayward said he is “optimistic” that 2009, NYRA’s first full year out of bankruptcy and operating under the new 25-year franchise, will be profitable.
“Despite showing a significant deficit again this year, we are optimistic that in 2009 we will turn an operating profit for the first time since 2001," Hayward said in a statement. “NYRA faces significant challenges in maintaining and improving our facilities and operations due to the lack of resources over the last decade, and will continue to be cash constrained until distribution of VLT revenues begins.”
Video Lottery Terminals were legalized at Aqueduct seven years ago, but the operation of the VLTs never got off the ground. New York Gov. David Paterson, who replaced Eliot Spitzer following his resignation earlier this month, must first select a VLT operator before they are put in use.