TRENTON — Faced with growing and continuing losses, the New Jersey Sports and Exposition Authority will need a state bailout to remain in business, the state auditor said in a report released today. "In fact, increased appropriations are likely," Stephen Eells said in the report to legislators. He did not provide any projections. Previous coverage: • N.J. sports authority...
A Star-Ledger file photo of Monmouth Park Racetrack in Oceanport.
TRENTON — Faced with growing and continuing losses, the New Jersey Sports and Exposition Authority will need a state bailout to remain in business, the state auditor said in a report released today.
"In fact, increased appropriations are likely," Stephen Eells said in the report to legislators. He did not provide any projections.
The new audit was short on financial analysis, but cited millions in annual losses at the state’s racetracks as one of the major factors behind the authority’s money woes. At the same time, the shutdown of Giants Stadium has further undercut the bottom line. Stadium operations had generated $20 million in annual revenue, but the authority will receive just $6.3 million in lease payments from the Jets and Giants next season when the teams move to a new, privately operated stadium.
Several of the sports teams that have called the Meadowlands home have also left. The New Jersey Nets departed from the Izod Center this season and will play the next two years at the Prudential Center in Newark before leaving for Brooklyn to play in an arena that has yet to be built. The Red Bulls moved to a new soccer stadium in Harrison.
While acknowledging the authority does generate income for the state from additional taxes while providing entertainment opportunities, Eells said his audit did not look at those issues.
The authority, once a cash cow for the state, would have operated at a deficit this year without a $15 million infusion in advance rent payments from the stalled Xanadu entertainment project. However, that money has now run out. At the same time, a $30 million subsidy from the Atlantic City casino industry that supplements the purses for horse racing will also run dry by the end of the calendar year and is unlikely to be extended from a gaming industry with its own financial woes.
In a response letter to the auditor, sports authority officials took no issue with the findings, other than to note they will be required to provide some level of support services to the New Meadowlands Stadium, and that some income under the new stadium lease will be applied to payments in lieu of taxes paid to East Rutherford.
The authority has said it is working to cut its operations costs and has slahed its payroll by $1.3 million since October.
Treasury spokesman Andy Pratt said today the department had been holding up release of the sports authority budget until Eells’ staff had finished its review.
Statehouse bureau reporter Claire Heininger contributed to this report.