Posts Tagged ‘keith chamblin’

By Ray Paulick
While Thursday’s Chapter 11 bankruptcy filing by Magna Entertainment (MEC) leaves a multitude of unanswered questions about the future of the racetracks the Frank Stronach-controlled company owns, there was a positive reaction from the investment community concerning MI Developments — another Stronach company spun off from the auto parts mothership Magna International – which is the majority shareholder in MEC.

Shortly after news of the bankruptcy filing was released in the afternoon, the share price of MI Developments (MIM) shot upward, jumping over $1 from 3.50 to 4.55 on heavy trading. Thursday’s closing price remained relatively steady after the market opened Friday morning.

Nevertheless, MIM is far off its 52-week high of 30.26. Like many stocks, it began a steep descent in mid-September when the global financial crisis first hit, but MIM has underperformed against the markets. Institutional shareholders Greenlight Capital and Farallon Capital Management have protested moves by the company to keep Magna Entertainment out of bankruptcy by extending loan deadlines and infusing cash into the company’s operational budget. Its principals have not publicly weighed in on the bankruptcy filing.

It’s too early to tell how MIM’s move to bid on some of the Magna racetrack properties (Golden Gate Fields, Gulfstream Park and the surrounding shopping mall, Palm Meadows training Center, Lone Star Park, and AmTote) will play out. The "stalking horse bid" of $195 million includes $44 million in cash, $15 million in an assumed capital lease, and $136 million in existing debt) may be topped by other interested parties. The other properties, including Santa Anita Park, Pimlico and Laurel, Thistledown, Remington Park have purportedly been on the market for some time now, but there have been complaints from shareholders and some interested outside parties that Stronach and his key executives have not been earnest in their efforts to sell.

Who might be interested in some of the properties that Stronach bought in Magna’s name in a buying frenzy from 1998-2002? Halsey Minor, the internet entrepreneur who previously attempted to buy Hialeah Park from John Brunetti and offered to pucrhase one of the loans MIM extended to Magna Entertainment, could still be a player. So might Churchill Downs, the publicly traded company that has little debt and a strong balance sheet. However, Churchill already exited the California market in 2005 when it sold Hollywood Park to a real estate development company, so it’s questionable whether or not it would have any interest in Santa Anita or Golden Gate. There have been reports in Florida that Churchill-owned Calder race course could be the site of either a baseball stadium or convention center at some point, although that seems less likely now that the track is being converted to a racetrack/slots casino. So its interest in Gulfstream Park is in doubt.

It is not inconceivable that some wealthy individuals involved in owning racehorses – among them Dubai’s Sheikh Mohammed — could step forward to make a bid, either individually or in partnership, particularly on Santa Anita, which many see as a critical lifeline for horse racing in California. It’s expected that Hollywood Park will be closed for development in the next few years, as it is owned by the same company that shut down Bay Meadows with the intention of developing it (though development of the property is said to be at a standstill).

In the meantime, there have been assurances that all of the Magna tracks will continue to operate, just as United Airlines planes continued to fly after that company filed for bankruptcy protection in 2002. In the case of United, there were serious cuts made in operations and employee benefits. The company emerged from bankruptcy a little more than three years after originally filing.

And Stronach has not indicated that he wants to get out of the business of owning and operating racetracks. He may do everything within his power to retain the tracks under one of the Magna umbrellas.

“The fact that MEC’s day-to-day operations will continue uninterrupted throughout the Chapter 11 process is good news to industry participants, including thousands of horsemen and employees, as well as customers," said Alex Waldrop, president and CEO of the National Thoroughbred Racing Association.

Magna and its tracks remain members of the NTRA, though it isn’t known if or when their $400,000 in annual dues (which are billed quarterly) will be paid. The NTRA went through a similar situation when the New York Racing Association filed for Chapter 11 bankruptcy protection in 2006. NTRA senior vice president Keith Chamblin said NYRA made good on all of its dues when it emerged from bankruptcy.

Greg Avioli, president and CEO of the Breeders’ Cup, said the filing by Magna should have no bearing on plans to return to Santa Anita this fall with the two-day championships, which are being hosted by the Oak Tree Racing Association. Oak Tree, which hosted the 2008 championships, leases the facility and staff from Santa Anita for its fall meeting.

“Our agreement is with Oak Tree, so at this time based on the information available to us, we fully expect to have the event there,” Avioli said. In the meantime, the Breeders’ Cup has retained the same bankruptcy counsel used when NYRA’s looming bankruptcy threatened the 2005 Breeders’ Cup at Belmont Park. It is expected that Churchill Downs would serve as a potential backup site if developments threaten Santa Anita or Oak Tree.

Perhaps Avioli’s key phrase is "based on the information available." No one really knows how this bankruptcy will proceed at this stage — not even Stronach.. We’ll learn more when the legal proceedings begin.

Copyright © 2009, The Paulick Report

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By Ray Paulick
The National Turf Writers Association has released its list of how individual members of the organization voted in 2008 Eclipse Award balloting, helping solve such mysteries as who voted against 2-year-old filly champion Stardom Bound or 3-year-old male champion Big Brown. The NTWA is the only one of the three voting organizations that discloses how its members vote, the other groups being editorial and handicapping staff members of Daily Racing Form and the National Thoroughbred Racing Association. Racing secretaries at member tracks and Equibase chartcallers make up the NTRA vote.

Three individuals voted against Stardom Bound: Bill Doolittle voted for Rachel Alexandra, Paula Rodenas chose Sky Diva, and Rick Snider voted for Springside. In the 3-year-old male category, there were eight votes against Big Brown.

Click here to see the list of NTWA voters.

Steven Crist, publisher of Daily Racing Form, said in an email to the Paulick Report he doesn’t see any benefit to disclosing how individuals vote. “I think all of our people take the process seriously,” he said, “and publishing their votes would not serve any particular purpose, though our writers are free to (and often do, as do I) choose to do so in columns and notebooks.

“As for publication making people accountable,” Crist added, “that hardly seems to work, given the incomprehensible published votes of NTWA members who voted for Sky Diva or Tale of Ekati as Eclipse champs.”

Crist said when he was part of the group that bought the Form about 10 years ago, there were over 100 voters at the publication, including secretaries and advertising sales people. “We immediately cut the number of our voters in half and now only give ballots to people actively engaged in writing, editing and handicapping,” he said.

“Personally, I think the NTWA has way too many voting members, some of them admitted with very skimpy credentials,” Crist said. “When I suggested this to the organization more than a decade ago, I was denounced as an elitist if not a eugenecist.”

Keith Chamblin, senior vice president of NTRA, said he intends to poll NTRA voters to “gain an understanding of their views on making their votes public.”

“Generally, I am in favor of transparency and we do expect racing secretaries to take their vote seriously,” he said. “We will not disclose the votes from this past year due to the fact that we did not inform voters in advance that their ballots would be made public.”

Copyright © 2009, The Paulick Report

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By Ray Paulick

People are making and cancelling bets on horses after races have begun. Let me repeat that: PEOPLE ARE MAKING AND CANCELLING BETS ON HORSES AFTER RACES HAVE BEGUN. Does anyone have a problem with that?

Copyright © 2008, The Paulick Report

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