06/22/2011 3:15PM

NYRA asked to disclose finances


The head of a New York regulatory agency has asked the New York Racing Association to provide detailed financial and budgetary records, including executive salaries, under threat of revocation of its franchise agreement to operate Aqueduct, Belmont, and Saratoga Racecourse.

Robert Megna, the chairman of the Franchise Oversight Board and the budget director for New York Gov. Anthony Cuomo, made the request in a letter to NYRA’s chief executive, Charles Hayward, after the oversight board met on Monday. Cuomo’s office publicly distributed copies of the letter.

The letter cites sections of the racing law requiring NYRA to make available all of its financial documents to the board, which has the power to recommend that the association’s franchise be revoked. At the Monday meeting – which Hayward did not attend – NYRA officials declined to disclose the salaries of the organization’s executives.

NYRA officials said on Wednesday that they would not comment on the letter.

The dispute is nearly identical to one last year in which NYRA at first refused to release the salaries of its executives at the oversight board’s request. NYRA eventually relented, distributing the salary information along with data showing how those salaries were lower than the salaries paid to other executives of racing companies with similar operations.

Since then, NYRA officials acknowledged in December that they awarded 5.5 percent raises to their 10 highest paid officials, along with 3 percent raises to all non-union administrative employees. The salary information distributed last year showed that Hayward was paid $460,000, which would make his compensation $485,300 this year, and it also showed that the company’s second highest-paid executive, chief operating officer Hal Handel, received compensation of $440,000, making his salary $462,200 this year.

Following disclosure of the salaries last year, state officials criticized NYRA for paying excessive compensation. Even after the disclosure, NYRA officials defended their decision not to release the information, citing their need to keep the data confidential in order to retain and recruit employees.

In the letter, Megna said that he had “substantial concerns” about NYRA’s ability to turn a long-term profit, citing information NYRA provided showing an anticipated 1.4-percent drop in betting handle this year and increased expenses of 7.9 percent.

After a decade of delays, NYRA is set to begin receiving subsidies from a casino at Aqueduct after it opens later this year. Under the operating agreement approved by the state, NYRA will receive 4 percent of the revenue from the casino for operating expenses and another 3 percent for capital improvements. The subsidies are expected to total at least $25 million annually.

Megna’s letter acknowledged that the casino will likely have a positive impact on the association’s bottom line, but he said that without detailed knowledge of the association’s revenues and expenses, the board could not come to any conclusions.

“Even with [slot machine] revenue continuing to flow, it is not clear after extrapolating current trends that racing operations are sustainable without significant restructuring,” the letter said.