UPDATE: State meets obligation to NYRA; Legislature OK's advance

[parsixfarms]

Originally Posted by Cannon Shell

Are school districts and health care facilities really comparable to the situation that we are talking about?

You asked for entities that get money from the state while the state simultaneously regulates them. Hospitals certainly fall into that category (get Medicaid $$ while regulated by DOH); schools, subject to audit by the Comptroller, are probably a less perfect analogy.

[Cannon Shell]

Originally Posted by parsixfarms

You asked for entities that get money from the state while the state simultaneously regulates them. Hospitals certainly fall into that category (get Medicaid $$ while regulated by DOH); schools, subject to audit by the Comptroller, are probably a less perfect analogy.

Is what NYRA asking for considered "state aid"?

NYRA officials argue that the state--because it now owns NYCOTB--is on the hook for the money owed NYRA by the OTB giant. NYCOTB, in its Chapter 9 bankruptcy filing, acknowledges a $15 million debt to NYRA; officials at NYRA have said that amount has since grown to $17 million.

"NYRA has a good case for the money," Pretlow said. "OTB is the state and OTB owes NYRA, ergo, the state owes NYRA."

[parsixfarms]

Originally Posted by Cannon Shell

Is what NYRA asking for considered "state aid"?

It doesn't matter what it is called. Yes, NYS is contractually obliged to pay NYRA the racino "continuation" payments (and it's probably also on the hook for NYCOTB), but just because you have a contractual right to something doesn't mean you are going to get it. NYS also has contracts with the government employee unions. The governor just tried to unilaterally impose furloughs in a manner that a federal court judge concluded was in violation of those contracts. So it's not like NYRA is the only party in whom the state may be in default on its obligations.

The simple fact is, that given the tarring that it has endured in recent years, NYRA is not viewed in a particularly sympathetic light by a general public that doesn't think the state should be in the gambling business, especially when they perceive it to be losing money. At a time when hospitals are closing and teachers are being laid off, many people (I'm not one of them) believe that giving money to NYRA is a misplaced priority. Just read the many blogs on the newspaper websites, including the Times-Union and Saratogian, to get a sense of this sentiment. This is why what should be a simple thing to do contractually is proving problematic from a legislative perspective.

[Cannon Shell]

Originally Posted by parsixfarms

It doesn't matter what it is called. Yes, NYS is contractually obliged to pay NYRA the racino "continuation" payments (and it's probably also on the hook for NYCOTB), but just because you have a contractual right to something doesn't mean you are going to get it. NYS also has contracts with the government employee unions. The governor just tried to unilaterally impose furloughs in a manner that a federal court judge concluded was in violation of those contracts. So it's not like NYRA is the only party in whom the state may be in default on its obligations.

The simple fact is, that given the tarring that it has endured in recent years, NYRA is not viewed in a particularly sympathetic light by a general public that doesn't think the state should be in the gambling business, especially when they perceive it to be losing money. At a time when hospitals are closing and teachers are being laid off, many people (I'm not one of them) believe that giving money to NYRA is a misplaced priority. Just read the many blogs on the newspaper websites, including the Times-Union and Saratogian, to get a sense of this sentiment. This is why what should be a simple thing to do contractually is proving problematic from a legislative perspective.

Well let me ask you a question. If all this is true (and I do believe it to be that) then what chance does NYRA or any other racing entity for that matter, have if the state which owns the OTB, controls a great deal of what NYRA/franchise holder does and is broke, can simply opt out of its financial obligations because of poor public perception of racing, the vast majority of which was falsely created by the state? Seriously, if the state can simply turn up the bad news meter everytime they don't want to pay NYRA monies owed to them ask yourself the question that you originally posed. Why would any of the board of directors (or anyone for that matter) loan money to NYRA under those circumstances?

[parsixfarms]

Originally Posted by Cannon Shell

Well let me ask you a question. If all this is true (and I do believe it to be that) then what chance does NYRA or any other racing entity for that matter, have if the state which owns the OTB, controls a great deal of what NYRA/franchise holder does and is broke, can simply opt out of its financial obligations because of poor public perception of racing, the vast majority of which was falsely created by the state? Seriously, if the state can simply turn up the bad news meter everytime they don't want to pay NYRA monies owed to them ask yourself the question that you originally posed. Why would any of the board of directors (or anyone for that matter) loan money to NYRA under those circumstances?

That's a very fair question; one that I really don't have an answer for.

However, having fought hard for the franchise and for a change in its corporate status, I'd like to think NYRA had other alternatives to only pinning its hopes for continuing racing on getting legislative relief (whether it's owed that money contractually or morally is really besides the point when dealing with Albany pols). And as I said earlier, against the NYCOTB back-drop, I think NYRA has painted itself into such a corner that, if some alternative did exist aside from legislative action for a loan or some other funding stream, NYRA probably couldn't exercise it. Because this should have been an easy lift and it hasn't been accomplished so far, I get a bad feeling about it. Patterson saying that something will get done is just BS; it's the legislature that needs to agree, and when Shelly Silver is involved, there's always a price to pay.

[pointman]

Originally Posted by parsixfarms

That's a very fair question; one that I really don't have an answer for.

However, having fought hard for the franchise and for a change in its corporate status, I'd like to think NYRA had other alternatives to only pinning its hopes for continuing racing on getting legislative relief (whether it's owed that money contractually or morally is really besides the point when dealing with Albany pols). And as I said earlier, against the NYCOTB back-drop, I think NYRA has painted itself into such a corner that, if some alternative did exist aside from legislative action for a loan or some other funding stream, NYRA probably couldn't exercise it. Because this should have been an easy lift and it hasn't been accomplished so far, I get a bad feeling about it. Patterson saying that something will get done is just BS; it's the legislature that needs to agree, and when Shelly Silver is involved, there's always a price to pay.

What is it that you suggest NYRA should do instead of what they are being forced to do? Don't you think cashflow is seriously hurt when you are owed $17 million by someone who refuses to pay and you know you are not getting it anytime soon?

[parsixfarms]

Originally Posted by pointman

What is it that you suggest NYRA should do instead of what they are being forced to do? Don't you think cashflow is seriously hurt when you are owed $17 million by someone who refuses to pay and you know you are not getting it anytime soon?

Absolutely, cash flow is hurt when NYCOTB doesn't pay, but speaking to people whose living is in the racing industry, this problem is partly NYRA's doing, as it has been very late to the belt-tightening table. It eliminated 12 positions only this past spring, and it still has executives on the payroll whose value (v. salary) is questioned on the backstretch. It could have eliminated the detention barn and closed training at Aqueduct and saved about $600K per month according to public reports, and it chose not to.

[Cannon Shell]

Originally Posted by parsixfarms

That's a very fair question; one that I really don't have an answer for.

However, having fought hard for the franchise and for a change in its corporate status, I'd like to think NYRA had other alternatives to only pinning its hopes for continuing racing on getting legislative relief (whether it's owed that money contractually or morally is really besides the point when dealing with Albany pols). And as I said earlier, against the NYCOTB back-drop, I think NYRA has painted itself into such a corner that, if some alternative did exist aside from legislative action for a loan or some other funding stream, NYRA probably couldn't exercise it. Because this should have been an easy lift and it hasn't been accomplished so far, I get a bad feeling about it. Patterson saying that something will get done is just BS; it's the legislature that needs to agree, and when Shelly Silver is involved, there's always a price to pay.

I am hardly an expert on NYRA's business and the complexities of the contracts between the various entities that it deals with. But what alternatives do they have if the largest business partner that thay have (and have no choice to end the relationship) has the ability to not fulfill its obligations? The alternative that would have given them the ability to carry on has been screwed up by the state for 9 years. Again, in theory, what would have been the realistic alternatives?

[freddymo]

Originally Posted by Cannon Shell

I am hardly an expert on NYRA's business and the complexities of the contracts between the various entities that it deals with. But what alternatives do they have if the largest business partner that thay have (and have no choice to end the relationship) has the ability to not fulfill its obligations? The alternative that would have given them the ability to carry on has been screwed up by the state for 9 years. Again, in theory, what would have been the realistic alternatives?

NOBODY suggests NYRA isnt 100% correct in there demands of the State ...The State is in financial turmoil do you understand that or you figure they are printing money like Obama?