New York City Off-Track Betting Corporation will develop a comprehensive restructuring plan over the next 30 days that will likely include proposed cuts in the amount of money that the state's racing industries receive from the company's betting revenue, according to the corporation's new chief executive, Greg Rayburn.
Rayburn, a reorganization specialist who was installed as New York City OTB's chief executive last week by Gov. David Paterson, said on Friday that the various constituencies that receive a piece of New York City OTB's revenue will be expected to "compromise" on changes to the formulas governing the distribution of the money. Since New York City OTB filed for bankruptcy earlier this year, both the Thoroughbred and Standardbred racing industries in the state have steadfastly resisted any efforts to dip into their shares of the wagering revenue, which, on the Thoroughbred side, reaches $100 million a year.
"It's pretty hard for me to imagine a process . . . not involving some level of compromise from each constituent," Rayburn said. He said that the statutorily set formulas would need to be reset in order to generate enough cash flow to make New York City OTB "fundamentally viable, with some sort of capital reserve."
In the week that Rayburn has been at New York City OTB, he has sought to identify areas in which the company can immediately cut costs, he said, including firing a handful of top executives. An official in Paterson's office confirmed Friday that those executives included Ira Block, the company's
longtime chief counsel; Robert Garry, the chief financial officer; Ron Ceisler, the vice president of marketing; and Robert Unger, the company's facilities manager. Rayburn also severed the company's relationship with a public-relations firm, the Edelman Group, that was hired by former chief executive Sandy Frucher after New York City OTB filed for bankruptcy earlier this year, according to the officials.
The effort to restructure New York City OTB will have significant repercussions on the New York racing industry, and officials of the New York Racing Association have made attempts to convince legislators and the governor to support proposals that would transfer some of OTB's operations to the association, including the OTB company's account-wagering operation. A transfer could form a bargaining chip that the industry may use if forced to accept a lower cut of OTB's betting revenues.
Rayburn said that he had considered "collapsing some pieces [of OTB's operations] into other pieces," including transfers to NYRA, but he said that those plans were not specific. Rayburn is scheduled to meet with the New York City OTB's creditors' committee on Wednesday to discuss a reorganization plan, and Rayburn said that "everything is on the table" for consideration.
"It will probably be one in which everyone is equally unhappy," Rayburn said.