12/02/2015 7:36PM

NYRA's profits for 2015 exceed projections


NEW YORK – On Wednesday night, the Christmas tree was lit in Rockefeller Center. Hours earlier and about 12 blocks away, New York Racing Association officials gave a presentation that showed the future of the organization was both merry and bright.

NYRA said it expects to show a profit of $4 million for 2015 – nearly double what it budgeted for – and has budgeted for a profit $2.3 million in 2016. The profit is exclusive of revenue derived from video lottery terminals at the Aqueduct casino.

NYRA officials credited the excitement and interest generated by Triple Crown winner American Pharoah as well as fantastic weather that led to a record-breaking handle at the Saratoga meet as the primary reasons its business exceeded expectations in 2015.

Chris Kay, NYRA president and CEO, also gave credit to his staff for the financial success of the company.

“I think it’s a real testament to what’s been going on over the last couple of years by a lot of people who don’t get a lot of recognition,” Kay said following the meeting.

Kay spoke following a two-hour and 15-minute meeting of the Franchise Oversight Board. The meeting was held in Albany, but Kay and several top-level NYRA executives participated via video conference in Manhattan.

Kay credited Martin Panza, the senior vice-president of racing operations, with improving the quality of racing, and Lynn LaRocca, NYRA’s chief experience officer, with helping to better market NYRA.

“We’ve done a much better job in so many ways with respect to how we market and how we treat our guests,” Kay said.

Kay also mentioned the many capital improvements that NYRA has put in place at its three tracks – Aqueduct, Belmont Park and Saratoga – “that have made a difference in terms of enjoyment that people are having at the tracks.”

NYRA spent $24.3 million in 2015 on capital improvements. NYRA has budgeted $44.1 million in capital expenditures for 2016. The money for those projects comes from revenue from video lottery terminals.

NYRA enjoyed a tremendous Saratoga season, which ended with all-sources handle up more than $70 million from the previous year. NYRA maintained smaller increases at Belmont as well.

In budgeting for 2016, however, NYRA is being more conservative as it is not planning for another go at the Triple Crown at the June 11 Belmont Stakes or the glorious weather that helped Saratoga’s business.

“We don’t expect to have the same kind of handle in 2016 that we had in 2015, but we do hope that a lot of the things we put in place in 2014 and 2015 will pay dividends again in 2016,” Kay said.

In discussing 2016, NYRA officials talked about a number of things they hope to do to increase revenue. First, NYRA plans to pay the shipping costs for horses based at Parx that opt to race at Aqueduct from Dec. 23 through Feb. 13, when Parx is not racing. The idea is to help increase field size at Aqueduct during the winter. That offer may extend to horses based at Laurel Park when that meet takes a break in late February.

NYRA plans to close the Aqueduct backstretch from May 8 through Aug. 30 at a savings of $587,000. NYRA attempted to close the Aqueduct backstretch last year for an extended period, but ultimately only closed it during the Saratoga meet. However, NYRA has increased its stall capacity at Belmont Park by 250 to 300 stalls and will have a new dorm to house more than 90 backstretch workers ready by late December, making the closing of the Aqueduct backstretch feasible.

NYRA may also close the Saratoga backstretch earlier than Nov. 1. NYRA has been required by the oversight board to keep the Saratoga barn area open from April 15 to Nov. 1.

NYRA plans to raise the price of track programs by $1, Kay said. Kay and Susanne Stover , NYRA’s chief financial officer, said that program prices at NYRA haven’t been raised in eight years.

“The cost of everything has gone up,” Kay said.

Stover said that program sales have gone up the last few years and that NYRA will sell approximately 500,000 programs in 2015.

Kay said that NYRA plans to raise the price it charges tracks and offtrack betting facilities to import its signal. Kay said that approximately 60 percent of its contracts with simulcast partners are up for renewal at year’s end.

NYRA gave two presentations to the oversight board, one detailing capital improvements made on the backside – barn renovations, dorm renovations – and projects to enhance jockey and equine safety.

The second presentation dealt with 11 performance standards NYRA was given to meet by the oversight board. The oversight board reviews these standards every four years, and NYRA wanted to give an update on its performance, concluding that it has met each of the 11 guidelines. Those standards involve meeting certain goals with regard to attendance and handle, jockey and equine safety, and maintaining operating expenses.

Regarding equine safety, NYRA is exploring the possibility of utilizing a synthetic surface at one of its tracks. As an experiment, NYRA plans to lay a Tapeta surface down in Barn 29 at Belmont, a barn that can be used by horses for jogging. NYRA will solicit feedback from trainers who utilize that barn.

Glen Kozak, NYRA’s director of racing surfaces, said the Tapeta should be in place in January.