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Odds-On
08-17-2016, 04:44 PM
NYRA Defends Financial Report at Meeting

The head of the New York Racing Association tangled with a state financial oversight board member Aug. 16 in a seemingly annual dispute over how the racing corporation reports on its financial performance.

"Stop," said Steve Newman, a member of the New York state Franchise Oversight Board, who interrupted a NYRA executive who was presenting an otherwise pro forma report on NYRA's second-quarter financial results.

READ THE REST HERE:

http://www.bloodhorse.com/horse-racing/articles/214290/nyra-defends-financial-report-at-meeting

dilanesp
08-17-2016, 05:29 PM
Glad to see someone challenging NYRA on their BS.

To be fair, though, the NYRA guy is right that Saratoga brings in a lot of money.

Cratos
08-17-2016, 06:06 PM
NYRA should be an independent stand alone private business entity who pays taxes and fees to New York State without the state's oversight.

the little guy
08-17-2016, 06:57 PM
Glad to see someone challenging NYRA on their BS.

To be fair, though, the NYRA guy is right that Saratoga brings in a lot of money.


What BS is that exactly?

classhandicapper
08-17-2016, 08:43 PM
Without actually seeing the books we are all speculating, but most public companies provide both consolidated and segment data so analysts and shareholders can decide for themselves how the company is performing. NYRA (even though it's not a publicly traded company) should probably present both also. Perhaps that info is there.

dilanesp
08-17-2016, 10:41 PM
What BS is that exactly?

Did you read the OP?

the little guy
08-17-2016, 10:42 PM
Without actually seeing the books we are all speculating, but most public companies provide both consolidated and segment data so analysts and shareholders can decide for themselves how the company is performing. NYRA (even though it's not a publicly traded company) should probably present both also. Perhaps that info is there.

Funny stuff.

thaskalos
08-17-2016, 10:56 PM
If the NYRA ran funeral homes...the people would stop dying.

the little guy
08-17-2016, 10:59 PM
Did you read the OP?

This is an act....right?

the little guy
08-17-2016, 11:00 PM
If the NYRA ran funeral homes...the people would stop dying.

No, dilanesp would accuse them of killing people to stay in business.....and Classhandicapper would agree with him.

JustRalph
08-17-2016, 11:30 PM
Is there any race track in America that also has a casino, that is profitable without the casino?

SuperPickle
08-18-2016, 12:55 AM
No, dilanesp would accuse them of killing people to stay in business.....and Classhandicapper would agree with him.

Andy's right if NYRA isn't truly turning a profit I got a bridge in Brooklyn to sell you.

In politics this is called the USPS argument. All the time you see politicians talk about how the post office is broke. Yet it makes no logical sense because with the growth of E-Commerce and Amazon the Post Office ships more items than ever. The answer is simple. After Congress and the Senate get their chance to cut into the Post Office revenue and than you factor in long ago agreed upon pensions and financial obligations on paper there's a deficit. However the deficit is in no way a reflection on the work of the people who actually run the USPS.

Same deal here. NYRA makes money. But after Albany takes what they want of the money and NYRA has to pay for financial obligations and debts that pre-date the current operators the number comes out negative. But its silly to than use this as some example that the people running NYRA are doing a poor job or that change needs to happen.

To sum it up its like a mugger calling you financially irresponsible after he takes your wallet.

classhandicapper
08-18-2016, 09:15 AM
No, dilanesp would accuse them of killing people to stay in business.....and Classhandicapper would agree with him.

Just one time in my life I'd like to understand WTF you are thinking or talking about, but I doubt that will ever be the case. Your problem is that you take every comment about NYRA as a personal attack without even trying to understand what people are actually saying (or asking them if it's not clear,). You go in assuming the worst and then see the worst even when it's not there. Not one word of anything I said above about NYRA was negative. The fact is, I'm on your side dude! I want you and NYRA to do well. That's where I often play. That's where I often hang out. That's where I run horses I own a piece of. I'd be an idiot if I wasn't on your side.

I know you were in the financial business at one time. So you've probably read some annual reports, 10Ks, or listened to various company conference calls. Most analysts and shareholders like details on the business segments broken out to go along with the consolidated numbers. It gives you a better feel for which areas of the business are growing, which are shrinking, which are profitable, and which are not. I know I do when I am a shareholder.

I specifically said that the information may be available in whatever financial statements have been presented, but I haven't seen them. So I don't know what is actually going on.

The only point I was making is that both sides may have a point in the debate about the casino money and any associated expenses.

Consolidated numbers matter because the money NYRA receives from the casino is part of their business. However, to fully understand the operations, it does make sense to break the numbers out so people can see how the operations are doing without the casino money given that there are people in government that would like to get their hands on it for other uses.

It's all moot other than what the numbers actually are and if NYRA's opponents can get their hands on it (which would not be good for me as an owner).

the little guy
08-18-2016, 10:43 AM
If there is a cliff notes version of the above post I might take a look at it.

classhandicapper
08-18-2016, 10:57 AM
If there is a cliff notes version of the above post I might take a look at it.

You have a problem assuming the worst when NYRA is discussed. You would be better served asking what people mean when it's not clear. Then maybe I could keep my follow up comments brief and not use up your precious time reading them. Then again, since you never read them, that explains a lot.

Saratoga_Mike
08-18-2016, 11:06 AM
If there is a cliff notes version of the above post I might take a look at it.

"VLT and operating support" revenues are broken out below the line (i.e., below the operating income section of the income statement). In addition, management addresses the racing vs. VLT issue in the MD&A section of the financials. I understand CH's point, but the information is available in the financial statements. I do not understand the "BS comment" from the Cali gentleman, as he did not elaborate. Finally, NYRA's financials are audited by KPMG.

classhandicapper
08-18-2016, 11:44 AM
"VLT and operating support" revenues are broken out below the line (i.e., below the operating income section of the income statement). In addition, management addresses the racing vs. VLT issue in the MD&A section of the financials.

That's the standard and what investors (or in this case other interested parties) should want.

After that it gets into politics.

If you are NYRA you may trumpet the results in their most favorable light by pointing to the numbers that include VLT revenue and if you are anti-NYRA you may trumpet numbers without VLT revenue (like this Newman guy).

Pro and Con can both make their case and neutral people can decide for themselves. That's why both are important.

The real issue is that those VLT revenues are an attractive target for the government. That's why we are having this conversation.

elhelmete
08-18-2016, 02:11 PM
That's the standard and what investors (or in this case other interested parties) should want.

After that it gets into politics.

If you are NYRA you may trumpet the results in their most favorable light by pointing to the numbers that include VLT revenue and if you are anti-NYRA you may trumpet numbers without VLT revenue (like this Newman guy).

Pro and Con can both make their case and neutral people can decide for themselves. That's why both are important.

The real issue is that those VLT revenues are an attractive target for the government. That's why we are having this conversation.

Wholeheartedly agree on the bolded/lined above.

This is true in every jurisdiction everywhere. Anyone who thinks a state government isn't eyeing casino $ and trying to figure out any way to vacuum it up is in denial. It's too much $ for a state to ignore, agreements be damned.

classhandicapper
08-18-2016, 02:29 PM
Wholeheartedly agree on the bolded/lined above.

This is true in every jurisdiction everywhere. Anyone who thinks a state government isn't eyeing casino $ and trying to figure out any way to vacuum it up is in denial. It's too much $ for a state to ignore, agreements be damned.

Years back when the VLT debates were raging I was one of the few people that thought it was a bad idea. In the short term my position was idiotic. Who in their right mind is going to turn down desperately needed money at tracks that were struggling? But you didn't have to be Nostradamus to see that state governments were eventually going to start wondering why they were using money from casinos to subsidize racing (especially a handful of owners) when they are often strapped themselves providing basic services for voters. It made no economic or political sense.

When NYRA started talking about trying to get profitable without the casino money I thought they were definitely on the right track. If you could get VLT money, you had to take it. But you also had to plan around the long term possibility/probability of it eventually being gone.

dilanesp
08-18-2016, 02:34 PM
"VLT and operating support" revenues are broken out below the line (i.e., below the operating income section of the income statement). In addition, management addresses the racing vs. VLT issue in the MD&A section of the financials. I understand CH's point, but the information is available in the financial statements. I do not understand the "BS comment" from the Cali gentleman, as he did not elaborate. Finally, NYRA's financials are audited by KPMG.

A member of NYRA's oversight board said NYRA was obfuscating its finances. I thought it was pretty clear in the OP.

Cratos
08-18-2016, 05:42 PM
That's the standard and what investors (or in this case other interested parties) should want.

After that it gets into politics.

If you are NYRA you may trumpet the results in their most favorable light by pointing to the numbers that include VLT revenue and if you are anti-NYRA you may trumpet numbers without VLT revenue (like this Newman guy).

Pro and Con can both make their case and neutral people can decide for themselves. That's why both are important.

The real issue is that those VLT revenues are an attractive target for the government. That's why we are having this conversation.
I am conservative and I am always skeptical about government intervention in in the private sector. I have no problem with government regulations and the enforcement of those regulations, but when government becomes “big brother” we get the fiasco as we see between New York State and NYRA.

NYRA in my opinion should be a licensed standalone private business whom New York State collects taxes and fees.

Their books should be open only to owners or shareholders and they should “sink or swim” based on how well they operate as a “for profit” private business.

You have yet to present why New York State should be an "oversight" to NYRA.

dilanesp
08-18-2016, 05:53 PM
I am conservative and I am always skeptical about government intervention in in the private sector. I have no problem with government regulations and the enforcement of those regulations, but when government becomes “big brother” we get the fiasco as we see between New York State and NYRA.

NYRA in my opinion should be a licensed standalone private business whom New York State collects taxes and fees.

Their books should be open only to owners or shareholders and they should “sink or swim” based on how well they operate as a “for profit” private business.

You have yet to present why New York State should be an "oversight" to NYRA.

I'm not a conservative but a version of this has always been my view. Private ownership of racetracks, subject to state regulation, works fine in the rest of the country.

There's a variety of historical reasons why NYRA has been able to hold onto the franchise, some of which (such as NYRA's extortionate and unfounded claim to land title, which was only finally settled a couple of years ago) were really underhanded. But the best thing New York state could do is simply privatize the operation and as you said, let it sink or swim.

the little guy
08-18-2016, 06:38 PM
I'm not a conservative but a version of this has always been my view. Private ownership of racetracks, subject to state regulation, works fine in the rest of the country.

There's a variety of historical reasons why NYRA has been able to hold onto the franchise, some of which (such as NYRA's extortionate and unfounded claim to land title, which was only finally settled a couple of years ago) were really underhanded. But the best thing New York state could do is simply privatize the operation and as you said, let it sink or swim.

This is so wrong that it's actually even funnier than your usual posts.

The actual facts are that NYRA was a huge favorite to win the land claim, whether immediate or eventually, and taking the issue to court could have forced the closure of the racetracks in NY for a significant period of time, which likely would have had the direct effect of bankrupting much of the industry.

You honestly know nothing about this issue, and should stick to muddying up CA racing issues, where at least you have slightly less ignorance. Or, you can keep supplying us with laughs. Whatever works for you.

dilanesp
08-18-2016, 07:20 PM
This is so wrong that it's actually even funnier than your usual posts.

The actual facts are that NYRA was a huge favorite to win the land claim, whether immediate or eventually, and taking the issue to court could have forced the closure of the racetracks in NY for a significant period of time, which likely would have had the direct effect of bankrupting much of the industry.

You honestly know nothing about this issue, and should stick to muddying up CA racing issues, where at least you have slightly less ignorance. Or, you can keep supplying us with laughs. Whatever works for you.

Oh wow, the little guy.

NYRA was NOT a huge favorite to win the land claim. It was close to frivolous. But I'm not going to bore you all with a legal brief on that. That would derail the thread.

But worse than that, it was bad for racing. As you indicated, the threat behind it was to shut down New York racing if the State dared to oust NYRA in favor of a different racetrack operator.

In other words, NYRA basically strapped a bomb to New York racing and forced the State to continue doing business with them.

I will never, ever forgive NYRA for this. People who care about the sport don't do this crap. That was a mafia tactic.

classhandicapper
08-18-2016, 07:27 PM
I am conservative and I am always skeptical about government intervention in in the private sector. I have no problem with government regulations and the enforcement of those regulations, but when government becomes “big brother” we get the fiasco as we see between New York State and NYRA.

NYRA in my opinion should be a licensed standalone private business whom New York State collects taxes and fees.

Their books should be open only to owners or shareholders and they should “sink or swim” based on how well they operate as a “for profit” private business.

You have yet to present why New York State should be an "oversight" to NYRA.


I was simply commenting on how public shareholders typically like to see financial reports. Given that NYRA has a relationship with the state, I understood both sides of that reporting dispute. At this point, I think the whole thing is nonsense. The reports are audited and it was suggested earlier in this thread that they are presented in a way that makes things clear. If anti NYRA forces think they are misleading, then that's because they don't know how to read them.

the little guy
08-18-2016, 07:27 PM
Oh wow, the little guy.

NYRA was NOT a huge favorite to win the land claim. It was close to frivolous. But I'm not going to bore you all with a legal brief on that. That would derail the thread.

But worse than that, it was bad for racing. As you indicated, the threat behind it was to shut down New York racing if the State dared to oust NYRA in favor of a different racetrack operator.

In other words, NYRA basically strapped a bomb to New York racing and forced the State to continue doing business with them.

I will never, ever forgive NYRA for this. People who care about the sport don't do this crap. That was a mafia tactic.


You're over your head.

Saratoga_Mike
08-19-2016, 11:34 AM
A member of NYRA's oversight board said NYRA was obfuscating its finances. I thought it was pretty clear in the OP.

Is that assertion self-evident? I think not. Have you read the financials? Have you read the MD&A section of the financials?

classhandicapper
08-19-2016, 11:45 AM
Is that assertion self-evident? I think not. Have you read the financials? Have you read the MD&A section of the financials?

Where did you find the recent financials?

Saratoga_Mike
08-19-2016, 11:52 AM
https://www.nyra.com/belmont/assets/4/7/NYRA_Q1_2016_Financials.PDF

classhandicapper
08-19-2016, 12:33 PM
https://www.nyra.com/belmont/assets/4/7/NYRA_Q1_2016_Financials.PDF

Thanks. I didn't even realize they posted them there. The couple of times I looked for them I found them via a link from an article. But they were usually out of date.

Saratoga_Mike
08-19-2016, 12:59 PM
If you want the 2Q numbers (currently in board-presentation format), just go to the Saratoga section of the NYRA site.

Cratos
08-19-2016, 02:25 PM
I was simply commenting on how public shareholders typically like to see financial reports. Given that NYRA has a relationship with the state, I understood both sides of that reporting dispute. At this point, I think the whole thing is nonsense. The reports are audited and it was suggested earlier in this thread that they are presented in a way that makes things clear. If anti NYRA forces think they are misleading, then that's because they don't know how to read them.
Your statement: “I was simply commenting on how public shareholders typically like to see financial reports” has little to do the NY State-NYRA financials because NYRA is a government (State of NY) regulated business entity.

To better understand this, a private held company in most cases is owned by the company's founders, management, or a group of private investors whereas a public company (your inference), is a company that has sold a portion of itself to the public via an initial public offering of some of its stock, meaning shareholders have claim to part of the company's assets and profits.

Again, NYRA is neither.

Saratoga_Mike
08-19-2016, 02:41 PM
Cratos - I believe you missed CH's post #5. He was not confused, just merely asking (for)/suggesting more disclosure.

classhandicapper
08-19-2016, 02:52 PM
Cratos - I believe you missed CH's post #5. He was not confused, just merely asking (for)/suggesting more disclosure.

Exactly.

Cratos,

If there are two informed guys in a room debating about the profitability of a company's operations and disclosure, that means the financial statements may not be clear enough or that there are multiple ways of looking at it.

I was merely relaying my experience looking at publicly traded company financial statements and from listening to analyst conference calls. The more you break out the segments, the clearer it is to everyone what is going on.

I wasn't suggesting anything else.

Cratos
08-19-2016, 03:47 PM
Exactly.

Cratos,

If there are two informed guys in a room debating about the profitability of a company's operations and disclosure, that means the financial statements may not be clear enough or that there are multiple ways of looking at it.

I was merely relaying my experience looking at publicly traded company financial statements and from listening to analyst conference calls. The more you break out the segments, the clearer it is to everyone what is going on.

I wasn't suggesting anything else.
What you stated is “finance 101” or just clarity in correspondence, but that is not the issue, it is the control given up when a business entity becomes a government regulated business entity; the public feels that they deserve to see “whatever”; that is why I advocate that NYRA become a private for profit enterprise.

classhandicapper
08-19-2016, 04:21 PM
What you stated is “finance 101” or just clarity in correspondence, but that is not the issue, it is the control given up when a business entity becomes a government regulated business entity; the public feels that they deserve to see “whatever”; that is why I advocate that NYRA become a private for profit enterprise.

I'm not sure what you talking about. A major point of the OP's article was how the financials were communicated in NYRA's current form.

I have no insight into what's eventually going to happen with NYRA, but I have a tough time imagining NYRA becoming a private for profit enterprise without a guarantee on the VLT revenue and I have a tough time imaging a guarantee being given.

VeryOldMan
08-19-2016, 04:27 PM
If there are two informed guys in a room debating about the profitability of a company's operations and disclosure, that means the financial statements may not be clear enough or that there are multiple ways of looking at it.

I was merely relaying my experience looking at publicly traded company financial statements and from listening to analyst conference calls. The more you break out the segments, the clearer it is to everyone what is going on.

+1

In my view class has received some undeserved snark in this thread, including from tlg. Simply commenting about NYRA needing to be more transparent about its finances isn't some sort of full-on attack. And, yes, I too look at financial statements on a daily basis.

Cratos
08-19-2016, 05:59 PM
I'm not sure what you talking about. A major point of the OP's article was how the financials were communicated in NYRA's current form.

I have no insight into what's eventually going to happen with NYRA, but I have a tough time imagining NYRA becoming a private for profit enterprise without a guarantee on the VLT revenue and I have a tough time imaging a guarantee being given.
I understand your argument and it is specious at best because what I am saying is that if NYRA was private and you or the OP wasn't a shareholder would either of you be as interest in their financials?

Since you have such insight and interest in the financials of NYRA, simply explain why is the state involved at all except for regulatory purposes?

dilanesp
08-19-2016, 06:01 PM
You're over your head.

NYRA was created decades ago to serve the public interest and allow the state to manage the asset of horse racing in New York.

We can argue about whether it was a good idea to do it that way rather than just have private racetrack operators, but that's the way they set it up.

For what was basically a quasi-governmental agency, set up to serve the public interest, to say, after there was extensive showings of corruption and malfeasance, "either you deal with us or we will file litigation and basically attempt to stop ANY horse racing in New York" is unconscionable. I can't imagine any organization in a similar situation doing anything like this. The analogy would be something like the following: Congress looks into allowing veterans to get their care from private insurance companies instead of the VA after extensive showings that the VA was corrupt, and the VA saying that if they go through with it, we will sue and make it impossible for the veterans to get the care anywhere and let them die on the street.

The only reason there is a NYRA in the first place is because it is supposed to serve the public interest in a way that private for profit track operators like Stronach don't have to. But NYRA turned around and acted like the mafia when it looked like their corruption was going to cost them the franchise.

As I said, this was unforgiveable.

classhandicapper
08-19-2016, 08:02 PM
I understand your argument and it is specious at best because what I am saying is that if NYRA was private and you or the OP wasn't a shareholder would either of you be as interest in their financials?

Since you have such insight and interest in the financials of NYRA, simply explain why is the state involved at all except for regulatory purposes?

I understand what you think a more ideal situation might be, but that's not what it is now. If you want to discuss that feel free to. I just have no interest in that discussion because I don't think it's likely.

My interest is NYRA's financials now is an owner with a small percentage of a few horses. Purses are high now because of the VLT revenue. I might be more or less inclined to buy an interest in other horses long term depending on where VLT revenues and purses go in NY and elsewhere. I'm not really in it for the money. I'm in it for the fun. But I'd be a fool to not at least consider it. I'd be interested in that no matter who was running it and how it was organized.

the little guy
08-19-2016, 08:09 PM
It's like a tag team of people that like to read their own endless posts.

Hey Classhandicapper, why don't you tell everyone how much your beloved NYC-OTB stiffed NYRA for when they declared bankruptcy.

I'll give you a hint....it was $2_,000,000.

Audit that.

alhattab
08-20-2016, 08:36 AM
https://www.nyra.com/belmont/assets/4/7/NYRA_Q1_2016_Financials.PDF

Thanks for that link Mike. I would urge thread participants to read and understand it to continue an informed discussion. There is as much transparency as you could ask for I believe. The Comptrollers report criticized NYRA for not reporting pension and benefits costs correctly. KPMG's quarterly report clearly states that NYRA's accounting in this regard is not GAAP. There was some debate on this topic when the Comptroller issued his report, but in my view there is no debate.

Conversely, NYRA's use of a "Non-GAAP" measure to effectively net purses paid from VLT's against the same revenue in order to arrive at seems appropriate. Users would seem better served by having the revenue in the operating section or the expenses in the non operating section.

classhandicapper
08-20-2016, 10:59 AM
It's like a tag team of people that like to read their own endless posts.

Hey Classhandicapper, why don't you tell everyone how much your beloved NYC-OTB stiffed NYRA for when they declared bankruptcy.

I'll give you a hint....it was $2_,000,000.

Audit that.

I don't recall the exact amount that was owed at the end. I'll trust you on that. I actually thought it was more. I primarily recall that the reporting on the situation was ridiculously biased, often inaccurate, and some people with influence were actively campaigning to destroy it with spin, bias, and worse.

Take the time to read this. It could even be relevant for you some day.

The primary reason OTB went down the tubes was long term promises to the employees for pensions and healthcare benefits. Governments (and I suppose agencies that are related to them) are notoriously poor at providing accurate accounting for things like that. They only worry about cash in and cash out today.

The problem is that governments and companies often make large promises in the future that don't cost nearly as much today (think social security and medicare). Then when the bills come due they suddenly find themselves without the required cash to make good on the promises...and kaboom!

I have a lot of friends that got screwed out of pension and healthcare promises in that bankruptcy. A few lives were pretty much destroyed.

I have sympathy for the fact that OTB screwed NYRA.

I just have no sympathy for the people that were lying about what was going on and trying to destroy it when it might have been salvaged with a new union deal. A lot of innocent people got F'd. (not me) It pays to know if the company that employs you will be able to make good on its promises.

lamboguy
08-20-2016, 12:02 PM
http://www.thoroughbreddailynews.com/nyra-placing-judges-fined-500-for-51717-error/

for some reason NYRA always tries real hard but they are snake bitten with stuff like this. they really deserve a good break one of these days.

classhandicapper
08-20-2016, 12:20 PM
I'll give you a hint....it was $2_,000,000.

Audit that.

If it will make you feel any better, the OTB branch business was dying a slow death. Some were becoming more like bank branches collecting deposits for the phone business. However, the phone business was still booming. When OTB closed, I'm sure a huge number of OTB phone customers shifted to NYRA where you collect a higher percentage of each dollar bet. To some extent that was also true of the branch business. For example, most of the people that used to bet at the Crossbay & Richmond Hill branches started going to Aqueduct & people from eastern Queens started going to Belmont Cafe. So even though NYRA took a large 1 time hit to the balance sheet from getting stiffed, you more or less got a new and growing revenue stream from NYCOTB that generated more per dollar. One a net basis maybe NYRA even made out better in terms of the long term value of that business.

In the end though I think the industry as a whole took a hit. Even though NYRA may have done fine from a bottom line perspective, some of that revenue was lost forever. I know loads of people that used to play regularly at branches for the social aspects of it that quit the game.

classhandicapper
08-20-2016, 02:54 PM
Thanks for that link Mike. I would urge thread participants to read and understand it to continue an informed discussion. There is as much transparency as you could ask for I believe. The Comptrollers report criticized NYRA for not reporting pension and benefits costs correctly. KPMG's quarterly report clearly states that NYRA's accounting in this regard is not GAAP. There was some debate on this topic when the Comptroller issued his report, but in my view there is no debate.

Conversely, NYRA's use of a "Non-GAAP" measure to effectively net purses paid from VLT's against the same revenue in order to arrive at seems appropriate. Users would seem better served by having the revenue in the operating section or the expenses in the non operating section.

The 2016 Q2 link is better because you can see the numbers mentioned in the OPs article (5 million profit rounded from 4.968).

In the notes you can see the breakdown of VLT revenues and what they were used for.

There is also a section on the non operating expenses that breaks down what was not included in that 5m amount.

It's all very clear to me now.

https://www.nyra.com/uploads/wysiwyg/assets/uploads/2016-08-10-Board-of-Directors-Meeting-Materials.pdf