In a sign that the honeymoon with the Reorganization Board of the New York Racing Association is over, we have seen recent media attention paid to a fiscal issue between NYRA and the Thoroughbred Breeding and Development Fund. The Fund is a public benefit corporation that distributes incentives to promote “breeding, raising, and racing of quality thoroughbred horses in New York State.” It derives its revenues not from taxes, but from New York’s thoroughbred tracks as well as a growing portion from Video Lottery Terminal revenues generated by the state’s racinos. NYRA is the entity now controlled by state government that runs New York’s quality horse racing programs at Saratoga, Belmont and Aqueduct. NYRA paid more than its correct share to the Fund between 2008 and 2012 to the tune of $1.2 million and is now seeking repayment.
Local media, including Albany’s Time Union newspaper and the NPR affiliate WAMC have paid attention to the story but, as typical of their other forays into New York’s racing, have shed considerably more heat than light on the issue. The TU “broke” the story on May 13, but “broke” is a relative term since the issue is one that has been publicly known for some time. According to The Saratogian, NYRA demanded a repayment on March 15. The Saratogian also quoted a member of NYRA’s Board as saying it was a matter that “had not come up in our board room,” even though he was present at the April 11 meeting when it was raised as an outstanding matter, and it was also reported in the minutes for the meeting. The manner in which it was raised at the meeting also made it clear that it had been an outstanding issue known to the Board members. WAMC’s contribution to the fog was a discussion on their daily Roundtable program where they described NYRA as seeking reimbursement of the over payment from the state. The Times Union published an editorial Sunday in which they decried the “tiresome games” played by NYRA’s Reorganization Board in distinguishing between the “new” NYRA and the “old” NYRA, adding, “[s]o it’s the new NYRA when it has its hand out for money from the state.”
Both WAMC and the Times Union also conveniently conflated moneys owed by NYRA to New York State that were discharged in a bankruptcy proceeding with what they each describe as a new demand for money “from the state.” I have always operated under the assumption that bankruptcy proceedings are designed to both protect creditors and allow an entity to get back on its feet, and debts that are discharged – and must be approved by a federal court – are, you know, “discharged.” It doesn’t mean that the bankrupt entity continues to owe an obligation. More significantly, however, is the Thoroughbred Breeding and Development Fund may be a state-created entity, but it is not the “state” in the sense that the taxpayers are responsible for its obligations. While that is not exactly a subtle point, it is one that both the capital’s “paper-of-record” and NPR station are willing to overlook in order to keep going what they see as a controversial story.
(Not so incidentally, the Thoroughbred Breeding and Development Fund has been twice cited by New York’s Comptroller, most recently on November 14, 2012, for failing to perform tests to prove they were getting the proper commissions. The Comptroller’s report said they were getting the proper commissions, but it is not clear that was a result of the Comptroller actually doing his own testing.)
This is not intended to excuse NYRA for making improper payments, but I see this as more of an accounting issue than a significant matter warranting the attention being paid to it by influential media outlets. I think NYRA deserves considerable scrutiny, particularly since it is now controlled by state government. But what I found so disturbing about Governor Cuomo’s seizure of New York’s racing a year ago remains true today. We are being poorly served by a media that seems more intent on the cheap sound bite than actually doing even a minimum level of actual reporting and digging to ascertain what is truly going on. The Times Union also pulled out the tired trope that NYRA “was in the headlines too often for its corrupt behavior.” They do not specify what that “corrupt” behavior was, but are instead apparently relying on a public willing to accept it on faith. Of course, if they did any actual reporting on these issues there could be an informed discussion on the good and bad of NYRA.
Always a good read, as usual very informative. As usual the press does not investigate the facts, prints what it wants.