(Originally published in the May 29, 2010 issue of The
Blood-Horse magazine. Feel free to share your own thoughts and
opinions at
the bottom of the column.)
You have to give Frank Stronach points for consistency. Since he embarked on his supermarket sweep of North American racetracks a dozen years ago, his mantra has remained the same. You can wind him up on any given day and get “Free market. Less regulation. Untie our hands. Let everyone run as many dates as they want and the market will decide.”
Stronach’s right about Thoroughbred racing being over-regulated. He shouldn’t be shocked, however, that since gambling is occurring in these establishments, government gets involved. Stronach has purchased a dozen racetracks and properties he wanted to develop as racetracks, in the ensuing years, and subsequently sold many of them. Like the Roto-Rooter man, he has caused his shareholders’ accounts to drain quickly. Through a gaggle of financial and legal calisthenics, he’s managed to emerge from the bankruptcy proceedings of his Magna Entertainment Corp. still owning a handful of tracks.
The question, given the current mess at Santa Anita Park, is why?
In California, where Stronach owns Santa Anita and Golden Gate Fields, there will be no economic relief from slot machines. The Indian tribes, with their mountains of casino cash, have bought the political process. So Stronach’s MI Developments, which assumed the assets of MEC April 30, decided to get off on the wrong foot by trying to boot the Oak Tree Racing Association, which has raced autumn dates at Santa Anita since 1969, off the premises.
It’s all legal. Under bankruptcy law, a new owner is not required to honor existing leases, so MID voided the lease with Oak Tree, which dictated that Oak Tree give 75% of its profits, or about $4 million per meeting, to Santa Anita. It made Oak Tree a new offer it could, and did, refuse—the $4 million, plus a $10 million loan with no principal payments for two years, plus paying 25% of all racing capital improvements at the track, plus forgoing an extra $1 million during years when it hosts Breeders’ Cup.
Oak Tree, a not-for-profit (Magna, unintentionally, has that in common with it) organization, has given away more than $20 million to charitable causes in its 40 years, and its leaders, men such as Dr. Jack Robbins, Clement Hirsch, and Sherwood Chillingworth, have been universally respected. If MID thought the California Horse Racing Board would automatically assign it Oak Tree’s racing dates, it badly miscalculated.
Instead, at the CHRB’s May 20 meeting, MID CEO Dennis Mills (don’t get too used to him; Stronach goes through second bananas by the bunch) got punted around by commissioner after commissioner.
The real fireworks, however, figure to commence when Stronach is scheduled to address the CHRB at its June 24 meeting. His call for more racing dates won’t come at the expense of Oak Tree, which will race at Hollywood Park or Del Mar if it can’t reach an agreement with MID. Stronach, though, figures to be sitting pretty once Hollywood Park cedes to the wrecking ball; if Santa Anita cops those dates, it can run 10 months a year.
If that’s not good enough, or doesn’t happen quickly enough, some believe Stronach will attempt to shutter Santa Anita for as long as it takes to get favorable terms from the CHRB.
If it comes to that, we wonder why Stronach fought so hard to hold on to Santa Anita. The Thoroughbred Racing Association of California, a group led by California horsemen formed a non-profit and was poised to purchase the Great Race Place when MEC went into bankruptcy. Stronach would have obtained a fair price, and the owners, reportedly aided financially by Keeneland, Fasig-Tipton, and Breeders’ Cup, could have forged a successful operation based on the Oak Tree model. The two sales companies would have helped ensure a stable racing enterprise on the West Coast, whose trainers are major shoppers at auctions in the Midwest and East, and Breeders’ Cup would have the permanent fair-weather site it craves.
While we have always gotten a kick out of Stronach’s rebellious nature, we hope he hasn’t chosen this time, and this racetrack, to overplay his hand. If he doesn’t wish to make a go of Santa Anita, TRAC would be more than happy to own and/or operate the historic venue.
Lenny Shulman, Features Editor
