NJ Sports Authority still $830 million in debt
TRENTON, N.J. –
Despite an $830 million debt and a $38 million deficit, the New Jersey Sports and Exposition Authority serves an important purpose, the president of the public agency that oversees sports and entertainment venues told lawmakers Wednesday.
“I do think there is a long-term future for the NJSEA,” said Sports Authority President Dennis Robinson.
Created in 1971, the Sports Authority operates the Meadowlands, which includes the stalled Xanadu retail and entertainment project, and also oversees the new Giants and Jets football stadium, the nearby Izod Center, the Monmouth Park Racetrack in Oceanport, and the new and historic Atlantic City Convention Centers.
But the agency has been steadily losing money for years and new governor Chris Christie created a commission to recommend how and whether the commission should be fixed or if it should be disbanded. Senate Majority Leader Barbara Buono also ordered a review of the agency by the Legislative Oversight Committee, which she chairs.
A report by Christie’s transition team showed that the NJSEA had a $38 million deficit for 2010 – much of it attributed to a projected $22 million loss by the horse racing industry and continual decline in revenue at Atlantic City casinos.
On Wednesday, legislative budget officers told lawmakers that the Sports Authority was carrying about the same debt load it has had for two decades.
Buono, D-Edison, questioned the deals the Authority has made over the years, including the privately financed new football stadium for the Jets and Giants, which will bring in far less revenue to the state each year.
“Whose interest are we serving?” she asked.
Buono was also critical of the NJSEA’s accounting methods, calling them “incomprehensible.”
“It seems like you randomly allocate expenditures and revenues,” she said, questioning why the most recent audits weren’t available to the public.
The agency has been slower to release its annual audits with each passing year even though the same accounting firm, Deloitte & Touche, has been performing them.
From 2004 prior, the audits were released in March of the following year. The 2005 audit was released in April of the next year; the 2007 audit was released in the November following.
The audit of 2008 was just posted in February – nearly a year later than in previous years.
Authority spokesman John Samerjan said only that the audit of 2009 would be released “soon.”
According to the most recent audit available, even as the Sport Authority was losing money in 2008, it continued to spend nearly $2 million over the previous year on legal costs, filling vacant positions and other “fringe increases.” Robinson told lawmakers Wednesday that the Sports Authority had reduced total labor costs over the last seven years and reduced full-time staff by 37 percent since 2002.
He also told the committee that a new deal to move the New Jersey Nets from the Izod Center to Newark’s Prudential Center for two years while a new arena is being built in Brooklyn may actually benefit the Sports Authority’s bottom line. He said the Izod Center can start to book concerts and family shows, which are more lucrative.
“There’s not a lot of money to being a landlord to a professional sports team,” Robinson said. “We made very little actual net income on the Nets. I think you’ll see better returns in the short-term.”
Whether that is true is unclear. The Sports Authority has refused to release detailed copies of concert contracts and is currently being sued by The Star-Ledger of Newark over the issue.
In 2008, Sports Authority chairman Carl Goldberg said he’d like to offer the Nets a stake in the Izod Center to keep it there long-term – a proposal that seems unlikely if the team were making far less than concerts at the facility were.
The Authority contends that while most public contracts are open for immediate inspection, the records are exempt from disclosure because releasing them could put the Authority at a competitive disadvantage since competing venues could offer acts at better prices.
Meanwhile, Robinson said the Izod Center “squeaked out” a $500,000 profit last year. But after investing about $1 million worth of upgrades into the facility, it was still in the red.
Copyright 2009 Associated Press. All rights reserved. This material may not be published broadcast, rewritten, or redistributed
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