Posts Tagged ‘Magna Entertainment’
Wednesday, November 26th, 2008
By Ray Paulick
Halsey Minor thought he would be meeting with MI Developments (MID) chief executive officer Dennis Mills in Baltimore, Md., on Wednesday morning to discuss Minor’s proposed buyout of the company’s $100-million loan to Magna Entertainment (MECA), the financially beleaguered racetrack company that operates Santa Anita Park and Golden Gate Fields in California, Gulfstream Park in Florida, and Pimlico and Laurel Park in Maryland, among other facilities.
When Mills failed to show, Minor called him, only to discover that Mills was still at Magna’s corporate headquarters in Canada putting out a press release outlining new loans from MI Developments to Magna Entertainment, further extensions of existing loans, and a proposed reorganization that could put the racetrack company more firmly under the control of Frank Stronach. The proposed reorganization, subject to MI Developments shareholder approval, is “an egregious attempt to hijack shareholder value and will never pass,” Minor told the Paulick Report.
Minor, a technology entrepreneur who created CNET.com among other Internet companies, is a horse owner and breeder who has also expressed interest in buying and restoring the dormant Hialeah Park in South Florida.
“He stood me up to put out this press release?” Minor said of Mills. “It might have been good to have met with me before the press release, because we have a better offer, by far, that will be far more acceptable to MID shareholders. It was a good faith attempt on my part to sit down with him and see if there was something we could do. Instead they put out this preposterous press release and he stands me up the day before Thanksgiving after I traveled all the way here to meet with him.
“I could have told Mills that what he put out, even though the stock is up a few pennies, has no chance of passing. There is a contingency (among MID shareholders) that is of the mind that says, ‘We’ll do anything to get rid of Frank,’ but this proposal doesn’t really fully get rid of him."
At least two institutional shareholders in MID, Farallon Capital Management and Greenlight Capital, have suggested possible legal action for breach of fiduciary responsibilty by MID’s board of directors over the MECA loans, one of them calling MECA a "financial sinkhole." A previous proposal to hand MECA over to Frank Stronach was voted down by MID shareholders earlier this year.
The proposal calls for a new loan from MID to MECA of $50 million to fund current operations and $75 million to pay for a possible slots license and temporary facility in Maryland, along with extensions of an existing bridge loan and of repayment deadline for another $100-million loan.
A second stage of the proposal, subject to shareholder approval, calls for MID to purchase unsold real estate in Dixon, Calif., and near the Palm Meadows training facility in Florida at what it calls “fair market value.” It also seeks additional extensions on the loans and the option to repay the loans in MECA stock instead of cash. The third and final stage, taking control of MECA away from MID and into the hands of an entity called the “Stronach Group,” is contingent upon MECA retiring its convertible bonds.
Minor insists that even if the proposal somehow gets shareholder approval, MECA will fail. “Frank doesn’t buy the stock until after the $295 million in convertible bonds are paid off,” he said. “If they are not paid, the company goes bankrupt. The slots deal in Maryland is terrible, and most of the big guys have said they are not even going to try to get the license. It’s only 33% (of revenue), versus close to 50% in Pennsylvania and Delaware. He has to spend $250 million to build his slots parlor, then give 60% of his profits to (Joe) DeFrancis (who sold his family’s interests in the Maryland tracks to Magna with a contingency for a share of any future slots revenue). So his own deal, which sucks all this money away from MID shareholders, would itself have a life of a year or two before it went under. This is Stronach’s way of saying, ‘I have this company (MID) hostage. If you want me to go away, you have to pay up.’
“The shareholders fully intend to have their day with Frank.”
Magna Entertainment (MECA) closed at $2.01 on Wednesday, up $.60, a gain of 42.8% on the day. MI Developments (MIM) gained $1.62 to close at $10.05, up 19.2%.
Copyright © 2008, The Paulick Report
Tags: dennis mills, farallon capital management, Frank Stronach, greenlight capital, gulfstream park, Halsey Minor, Magna, Magna Entertainment, Maryland Jockey Club, maryland slots, mec, meca, mi developments, mid, mid shareholders, mim, Paulick Report, Ray Paulick, santa anita, stronach, stronach group
Posted in Halsey Minor, Magna Entertainment | 13 Comments »
Friday, November 14th, 2008
(From Maryland Jockey Club press release)
LAUREL, MD. 11-14-08—The Maryland Jockey Club Friday announced until further notice no horses will be allowed to ship into Laurel Park except those from the Bowie Training Center on a Maryland Jockey Club shuttle. The limitations were instituted after a two-year-old filly in Barn 1 at Laurel tested positive for equine herpesvirus Thursday. In addition horses based at Laurel and Bowie are restricted to the grounds. The Pimlico Race Course stable area is closed for the winter.
“This is a precautionary measure,” said Tom Chuckas, president and chief operating officer of the Maryland Jockey Club. “It is in our best interest to restrict the movement of horses in and out of Laurel until we see the outcome of the tests on the remaining horses in Barn 1.”
On Wednesday afternoon, the Maryland Department of Agriculture (MDA) placed an "Investigational Animal Hold Order" on Barn 1 pending laboratory results after Nin, from trainer King Leatherbury’s stable, showed neurologic signs of the virus. The filly tested presumptive positive for equine herpesvirus, but the blood samples sent to the University of Kentucky were inconclusive so additional samples were taken today.
The Hold Order limits all movement into and out of Barn 1, pending further testing. None of the other 29 horses are showing neurologic signs. Testing will continue in the barn.
Today’s announcement forced 38 horses to be scratched from Friday’s nine-race card and another 29 shippers will not be allowed to race tomorrow. The Maryland Jockey Club racing office attracted 87 entries on the overnight for next Wednesday’s nine-race program, which were taken today.
“Everyone is being affected financially but you can’t keep track of the movement of horses that come off the farm or another training center,” said Maryland Jockey Club racing secretary Georganne Hale. “Entries will be short but we are trying to keep this situation confined.”
The Maryland racing community faced an outbreak of the virus in early 2006 when three horses at Pimlico and another at Laurel were euthanized, while three live racing cards at Laurel Park were cancelled due to lack of horses as racetracks in neighboring states barred horses from running in Maryland.
Equine herpesvirus causes upper respiratory infection and can lead to severe neurological disease. There is currently no known method to reliably prevent the neurologic form of EHV-1 infection. It is recommended to maintain appropriate vaccination procedures in an attempt to reduce the incidence of the respiratory form of EHV-1 infection, which may help prevent the neurologic form. Transmission occurs primarily by direct nose to nose contact or contaminated hands, equipment, feed and water. It can also be spread up to 35 feet by airborn droplets. This virus is not associated with any human health risk.
3:50 pm update:
The Maryland Department of Agriculture reports that testing from the University of Kentucky confirms that the 2-year old filly in Laurel Park’s Barn 1 is positive for EHV-1.
Tags: bowie, ehv, ehv-i, equine herpes virus, equine herpesvirus, equine virus, georganne hale, herpesvirus outbreak, horse disease, Horse Health, infectious disease outbreak, king leatherbury, laurel, laurel park, Magna Entertainment, maryland department of agriculture, Maryland Jockey Club, nin, Paulick Report, Ray Paulick, tom chuckas, university of kentucky
Posted in Horse Health, Horse Welfare, Maryland Jockey Club | No Comments »
Wednesday, November 5th, 2008
MI Developments, the publicly traded real estate concern that is the largest single shareholder in racetrack operator Magna Entertainment, is under fire again from one of its biggest shareholders, this time for ignoring an offer from technology entrepreneur Halsey Minor to buy the outstanding loans Magna Entertainment has been unable to repay to its parent company.
Minor made an offer last month to buy Magna Entertainment’s debt obligation and went public Oct. 17 after failing to get a response from the MI Developments board.
David Einhorn, the president of the Greenlight Capital investment fund that owns 10% of the Class A shares in MI Developments, is demanding that the MI Developments board of directors give serious consideration to Minor’s offer without interference from Frank Stronach, who controls both MI Developments and Magna Entertainment. Einhorn expressed his demands in a letter to the MI Developments board filed with the Securities Exchange Commission on Tuesday. Greenlight has had a longstanding battle with MI Developments and lost an earlier lawsuit against the company alleging shareholders were oppressed by board of director decisions.
The demands from Einhorn come two weeks after a similar letter was written to the MI Developments board by a managing member of the Farallon Capital Management investment fund, threatening legal action and alleging breach of fiduciary responsibility.
Einhorn’s letter accuses the MI Developments board and CEO Dennis Mills of making “false and misleading” promises and says that ignoring Minor’s offer was a “clear violation of the board’s fiduciary duty and duty of care to its shareholders.”
The letter says MI Developments board members “continue to abandon ship,” and accuses Stronach of stacking the board with “cronies” and “childhood friends.”
“The MID board has a long history of ignoring our letters, and those of other large MID shareholders,” Einhorn writes. “The MID board can not continue to stick its head in the sand and ignore the wishes of an overwhelming majority of the MID shareholders.
“Since ignoring the Minor Offer is clearly a violation of the MID board’s duties, we expect, and demand as shareholders of MID, that the MID board immediately take up serious consideration of the Minor Offer without Mr. Stronach’s interference. Any transaction in which MID can be rid of its unlimited and never-ending exposure to MEC must be taken seriously. We minority shareholders rely on you to protect our interests from Mr. Stronach’s uneconomic and self-serving support of MEC and remind you that you will be held accountable if you fail to fulfill your fiduciary duty to the MID shareholders.”
Click here to read the Einhorn letter.
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Tags: david einhorn, dennis mills, farallon, farallon capital management, Frank Stronach, greenlight capital, Halsey Minor, Magna, Magna Entertainment, meca, mi developments, mid
Posted in Halsey Minor, Magna Entertainment | 1 Comment »
Tuesday, November 4th, 2008
By Ray Paulick
UPDATED TUESDAY EVENING:
Stock prices soared Monday in Magna Entertainment, the racetrack company that operates Laurel Park and Pimlico in Maryland, where voters are deciding today on an amendment to allow 15,000 slot machines at five locations in the state.
The share price jumped by 92%, from $1.82 at the opening bell to $3.50 by the day’s close. Magna Entertainment, which also operates Santa Anita Park, Golden Gate Fields, Lone Star Park, and Gulfstream Park, among other tracks, trades on the NASDAQ under the symbol MECA. One-day trading was the heaviest that it’s been since Sept. 30, when the stock plummeted from $4.00 to $1.75. Earlier this year, Magna exercised a 20-for-1 reverse stock split to maintain its position on the NASDAQ.
UPDATE: Tuesday afternoon, Magna Entertainment sent out a press release saying the company "is not aware of any specific developments" connected with the sudden increase in share prices. MECA closed at $3.97 Tuesday afternoon, an increase of another $.47 (13.4%).
Even with Monday’s gains, adjusted share prices are down 95% from what they were when MECA went public in 2000. The company is saddled with hundreds of millions of dollars of debt.
Polls indicate the Maryland constitutional amendment permitting slots will pass, though there is no guarantee that Magna Entertainment will be one of the operators of the slots parlors. Approximately 7% of revenue from the machines will subsidize horse racing purses, with 2.5% going to racetrack renewal.
When Magna Entertainment purchased the two Maryland Jockey Club tracks from the family of Joe and Karin De Francis, the agreement gave the former owners 18% of any future profits MECA earned from slot machines.
The company announced Monday that a previously announced deal fell through to sell excess property near Ocala, Fla., where company chairman Frank Stronach had once hoped to build a racetrack.
Tags: Frank Stronach, gulfstream park, joe de francis, karin de francis, laurel park, Magna, Magna Entertainment, Maryland Jockey Club, meca, pimlico, racino, santa anita, Slot machines, slots, stronach
Posted in Magna Entertainment, Maryland Jockey Club, Slot machines | 1 Comment »
Sunday, November 2nd, 2008
By Ray Paulick
Mountaineer Casino Racetrack and Resort in West Virginia has notified horsemen they will lose stalls and may be excluded from the track if any horses racing at Mountaineer end up at the Sugarcreek auction in Ohio, the Amish-run livestock sale where many horses end up in the hands of killer buyers and headed for slaughter facilities in Canada or Mexico.
The new policy appeared on a Tuesday overnight entry sheet at the Chester, W. Va., track. Suffolk Downs racetrack in East Boston, Mass., was a pioneer in instituting a policy to prevent horses going to slaughter auctions, and Magna Entertainment recently adopted a company-wide policy at its tracks.
Mountaineer also is instituting a ban on toe grabs in excess of two millimeters in height on the front feet. That policy takes effect Dec. 1.
Thanks to the Paulick Report reader who brought this new policy at Mountaineer to our attention.
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Tags: anti-slaughter, Horse Racing, horse slaughter, Horse Welfare, killer auction, killer buyers, Magna Entertainment, mountain casino, mountaineer, mountaineer park, Paulick Report, Ray Paulick, suffolk downs, sugarcreek, sugarcreek auction, toe grabs
Posted in Horse Slaughter, Horse Welfare, Uncategorized | 25 Comments »
Monday, October 20th, 2008
By Ray Paulick
Santa Anita Park will be the focal point of the racing world on Friday and Saturday with the 25th running of the Breeders’ Cup world championships, but that doesn’t mean the rest of the nation’s tracks have gone into hibernation for the week.
Take Suffolk Downs … please! But, seriously, the East Boston racetrack was packed to the gills on Sunday, and it was all for a good cause. Thousands of walkers took to the sandy loam racing surface to help fund scientific research and to increase autism awareness at the eighth annual Greater Boston Walk Now For Autism.
It was the second time the event was held at Suffolk Downs following the successful debut last year when more than $1.3 million was raised and 15,000 turned out to take a couple of laps around the one-mile track. All proceeds from the event benefit Autism Speaks, the nation’s leading autism advocacy organization. A growing health crisis, autism is a complex brain disorder now affecting one in every 150 children by inhibiting their ability to commmunicate and develop social relationshiops, and is often accompanied by extreme behavioral challenges. A child is diagnosed with autism every 20 minutes.
Since becoming principal owner of Suffolk Downs last March, Richard Fields has elevated the profile of the track in both the racing and local communities through his support of events like Walk Now for Autism and the creation of a policy to prevent racehorses that compete at his track from being sent to slaughter. Fields has been a welcome and positive addition to the industry.
IT MIGHT BE A STRETCH TO SAY THAT BELMONT PARK WILL BE JUMPING ON WEDNESDAY, since the term “weekday crowds” there is an oxymoron. But a $1-million pick six carryover is going to put Belmont in the spotlight among the nation’s horseplayers, who figure to pump as much as $3 million more into the pool. That’s what happened back on June 11 during the spring-summer meeting when a $1-million-plus carryover resulted in a final pool of $4.4 million. There were 29 winning tickets that day (each worth $103,754), none of them purchased on-track at Belmont Park.
The good news for the New York Racing Association during Belmont Park’s final week follows the bad news for local horsemen, who learned of 10% purse cuts at the upcoming Aqueduct meeting, and for a number of full-time employees, who were laid off. The carryover is not good news for Breeders’ Cup officials who would rather see horseplayers hold onto their bankrolls until Friday, when the two-day world championships begin at Santa Anita.
A GOOD HORSEKEEPING SEAL OF APPROVAL … is that really all the enforcement strength the National Thoroughbred Racing Association can muster with its Safety and Integrity Alliance? If so, last week’s announcement of proposed wide-ranging reforms by the NTRA only reinforces the need for some form of federal intervention to create national standards for the racing industry.
In a press teleconference that included former Wisconsin Gov. Tommy Thompson, whose Washington law firm has been hired to independently monitor the reform movement’s progress, NTRA president and CEO Alex Waldrop called the Alliance a “voluntary” organization. He suggested tracks that don’t conform to the Alliance’s Code of Conduct may be considered pariahs by horseplayers, who will bet their money at tracks that do comply. Waldrop also failed to substantively answer any questions about how the industry will pay for the reforms, even going so far as to say the NTRA has no idea how much the reforms will cost. Click here to read the teleconference transcripts.
Good work was done by the Alliance and the many people who worked on the sensible and much needed reforms, but the fundamental flaw that has derailed so many prior industry initiatives still remains: the lack of a central authority with real enforcement powers. Oaklawn Park and Tampa Bay Downs, two tracks that did not join the Alliance, can’t be forced into the Alliance, and I seriously doubt their future success or failure will be a byproduct of their membership status.
Structure remains an impediment to serious progress in this industry. Until there is a structure that includes a national office with real enforcement and decision-making capabilities, volunteer organizations are doomed to fail.
HALSEY MINOR IS NOT GIVING UP ON HIALEAH PARK. Just because the technology entrepreneur has shifted his attention to MI Developments, the controlling shareholder of the near-bankrupt racetrack company Magna Entertainment, doesn’t mean he’s taken his eye off Hialeah Park, the dormant South Florida track he wants to buy.
Minor told the Paulick Report he intends to legally challenge the city of Hialeah’s right to turn over the deed for Hialeah Park to John Brunetti four years ago at the end of a 30-year lease agreement between Hialeah and Brunetti. Minor contends that Brunetti failed to live up to the terms of the lease by failing to offer live racing, not holding a pari-mutuel license and falling behind in his payments to the city. Minor thinks the city of Hialeah should enforce an eminent domain claim on the land. If not, he said he has a team of lawyers ready to strike.
BREEDERS’ CUP OFFICIALS COULDN’T FORESEE THE FINANCIAL CRISIS that has many people cutting their discretionary spending, and there is no doubt the troubled economy will lower expectations for business this weekend. But long before the Wall Street meltdown, it was obvious to many people the inflated ticket prices and insistence on a two-day ticket package was a mistake. Now they are scrambling to sell reserved seats for the world championships. A quick check of online ticket brokers shows seats are available for Friday’s program at prices less than half of face value. The Breeders’ Cup should go back to the drawing board on their ticket pricing for 2009. It may the “Super Bowl of Horse Racing,” but it’s not the Super Bowl.
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Tags: autism, belmont park, Breeders' Cup, breeders' cup tickets, Breeders' Cup World Championships, greater boston walk now for autism, Halsey Minor, hialeah, Hialeah Park, Magna Entertainment, mi developments, National Thoroughbred Racing Association, New York Racing Association, NTRA, ntra safety and integrity pledge, oaklawn park, Paulick Report, pick six, pick six carryover, Ray Paulick, richard fields, santa anita, suffolk downs, super bowl, tampa bay downs, wall street meltdown
Posted in Breeders' Cup, Halsey Minor, Hialeah Park, Horse Racing, Horse Slaughter, Industry Reform, National Thoroughbred Racing Association, New York Racing Association, Thoroughbred Business | 1 Comment »
Saturday, October 18th, 2008
By Ray Paulick
A major institutional investor in MI Developments, the Frank Stronach-controlled real estate company that has kept Stronach’s failing racetrack entity Magna Entertainment afloat with bridge loans, has threatened legal action against the MI Developments board of directors, alleging they have “flagrantly breached their fiduciary duties to shareholders.”
Richard Fried, a managing member of the San Francisco-based Farallon Capital Management that owns 8.5% of the Class A shares in MI Developments, protested the board’s most recent extension and expansion of a now $125-million bridge loan and delay of a due date of a separate $100 million loan payment. Fried wrote that Magna Entertainment “has been, is, and will remain a financial sinkhole. Continuing to finance it offers no conceivable benefit to MID’s shareholders.”
“There is no possible justification for the Board to approve loans to a near bankrupt horseracing concern, especially one that is hopelessly entangled with irrational, non-economic, and conflicted parties and has a track record of massive value destruction,” Fried wrote. The letter was filed with the Securities Exchange Commission on Friday, the same day that technology entrepreneur and Thoroughbred owner and breeder Halsey Minor went public with an offer to buy out MI Developments’ loans to Magna Entertainment.
The letter said Farallon concludes that “the (MI Developments) Board is pursuing a value-destroying investment instead of a relatively safe and accretive investment because the Board is ignoring common shareholders’ interests and is only interested in pleasing Frank Stronach, even if his desires conflict with the best interests of MID’s shareholders.”
Farallon also went on record as opposing what it called “an ill-conceived transaction” that would have MI Developments buying out Magna Entertainment, whose stock has lost more than 95% of its equity value. MI Developments already owns a controlling interest in Magna Entertainment, which operates Santa Anita Park (host of the Breeders’ Cup world championships in 2008 and 2009), Gulfstream Park, Lone Star Park, the Maryland Jockey Club tracks Pimlico and Laurel, and Golden Gate Fields.
“We believe the Board’s duties require it to end MID’s support of MEC and focus urgently with management on developing a coherent and fair reorganization plan. You must tell Mr. Stronach that his time for self-serving maneuvers is over. It is time for you to meet your fiduciary duties as directors. If you do not, Farallon will consider all legal tools available to it as a shareholder.”
Magna successfully defended a previous lawsuit by Greenlight Financial alleging that Greenlight and other investors were oppressed by Stronach and the MI Developments board.
Click here for the complete text of the Farallon Capital Management letter.
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Tags: Breeders' Cup, cnet, farallon capital management, farfallon, financial sinkhole, Frank Stronach, gulfstream park, Halsey Minor, Horse Racing, laurel, lone star park, Magna, Magna Entertainment, magna entertainment farfallon capital management, Maryland Jockey Club, meca, mi develoments, mi developments, mid, Paulick Report, pimlico, Ray Paulick, richard fried, santa anita park, stronach
Posted in Halsey Minor, Magna Entertainment | 7 Comments »
Friday, October 17th, 2008
By Ray Paulick
Technology entrepreneur Halsey Minor has gone public with a letter sent to the Special Committee of the Board of Directors of MI Developments (MIM) asking the board to consider his proposal to acquire outstanding loans made by MI Developments to the financially beleaguered racetrack company Magna Entertainment (MECA).
Click here to read the letter.
Both MI Developments and Magna Entertainment are controlled by Frank Stronach, though Stronach owns just 2% of MI Developments.Both companies are offshoots of auto parts giant Magna International (MGA), whose stock price has declined by 67% over the last year.
On Thursday, Magna Entertainment received another extension on more than $250 million in outstanding loans, all but $40 million from MI Developments. The new agreement on a bridge loan from MI Developments added $15 million to the amount Magna Entertainment could borrow.
Minor, the founder of CNET and several other technology firms, said his proposal was made several weeks ago but that he has yet to receive a response from the Special Committee, necessitating the need to make the offer public so it could receive full consideration from shareholders of MI Developments.
“While it is unfortunate that we have to take the unnecessary step of making our proposal public,” Minor said, “we believe that MI Developments’ shareholders deserve to know about the opportunity to relieve the company of what has become an increasingly burdensome debt obligation. Magna Entertainment owns some of the world’s premier racetracks, but many of them have fallen into disrepair and are in desperate need of capital to both improve the facilities and attract fans back to the industry. I have long had a passion for the horse racing industry, and believe strongly that this storied, exciting sport can be revitalized. I want to help rebuild this industry, and initiating discussions with MI Developments to explore ways we can solve Magna Entertainment’s liquidity problem and help provide a better strategic direction to these under-capitalized properties is a winning proposition for MI Developments and the horse racing industry overall. I look forward to a response from MI Developments’ Special Committee.”
Minor, who also has made a bid to buy Hialeah Park in South Florida from John Brunetti, told the Paulick Report he is very concerned over the affect a potential bankruptcy by Magna Entertainment could have on the horse racing industry. “The goal would be to take control of the Magna tracks away from MI Developments and begin the process of rebuilding much of what has been harmed over the previous five years," he said. "Magna Entertainment, as a company, clearly has little chance of survival. The idea is to prevent a bankruptcy which would be disastrous for the industry and to begin to rebuild the company. The goal, first and foremost, is to stop the uncontrolled bankruptcy, which is almost inevitable. You can’t lose $120 million a year in this environment and continue.
“Frank Stronach only owns 2% of MI Development but has been using that company to prop up Magna Entertainment, which has basically been a bankrupt company for three years. It only exists because MI Developments continues to put money into a company whose losses are in excess of $100 million a year.
“We have made a proposal, but the Special Committee of MI Developments hasn’t allowed us to have any access to any of the information, which is really crazy. They are depriving their shareholders of even knowing what our final offer will be. This will let the hedge funds who own the stock realize the company has been offered the opportunity to exit the Magna Entertainment funding business and so far has declined to even talk.”
Members of the Special Committee are Jerry D. Campbell (Chairman), Anthony J. Campbell and William J. Menear.
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Tags: cnet, Frank Stronach, Halsey Minor, Magna, magna bridge loan, Magna Entertainment, magna international, meca, mi developments, mim, Paulick Report, Ray Paulick, stronach
Posted in Halsey Minor, Magna Entertainment | 9 Comments »
Wednesday, October 8th, 2008
By Ray Paulick
(UPDATED OCT. 10 TO REFLECT NEW POLICY FROM MAGNA ENTERTAINMENT)
When the Judiciary Committee in the U.S. House of Representatives held a markup hearing on Sept. 17 to discuss H.B. 6598, the Prevention of Equine Cruelty Act of 2008 that would ban slaughter and criminalize the transportation of horses for the purpose of having them slaughtered for human consumption, a letter from National Thoroughbred Racing Association president and CEO Alex Waldrop said his organization took a neutral position on H.B. 6598 despite supporting previous anti-slaughter legislation.
Waldrop’s position statement, read into the record by Republican Bob Goodlatte of Virginia, outraged a number of prominent Thoroughbred industry participants, including Pin Oak Stud’s Josephine Abercrombie, who wrote a letter signed by more than 40 individuals that was sent to the leadership of the Judiciary Committee stating that the NTRA did not speak for them on the issue. The Judiciary Committee passed the legislation on Sept. 23 and sent it to the full House.
On Oct. 3, however, House Speaker Nancy Pelosi (D-Calif.) referred the Prevention of Equine Cruelty Act to the Agriculture Committee, giving that committee until Jan. 3, 2009, to take action on the bill. Since the 110th Congress has adjourned, the bill will not pass unless it comes up during a lame duck session, which is highly unlikely.
Agriculture Committee chairman Collin Peterson (D-Minn.) and ranking Republican Goodlatte both have been recipients of contributions from the NTRA PAC, most recently receiving $5,000 for their 2008 campaigns. Peterson is a member of the Congressional Horse Caucus and Goodlatte has been a strong ally of the NTRA’s lobbying efforts concerning Internet gambling and tax incentives for breeders. Goodlatte has been an opponent of slaughter legislation. (Abercrombie, incidentally, is a “champion” level NTRA Horse PAC donor, giving $5,000.)
In the wake of the Judiciary Committee’s action on anti-slaughter legislation and the NTRA’s neutral position (the American Horse Council is also neutral), Paulick Report readers suggested we contact other major Thoroughbred industry associations and businesses to see if they have taken a position on the issue of slaughter and on the specific legislation (H.B. 6598).
Listed alphabetically by organization, here is what we learned:
ASSOCIATION OF RACING COMMISSIONERS INTERNATIONAL: According to RCI president/CEO Ed Martin, the RCI “normally does not take positions on pending legislation in Congress and has not been asked by any of its members to address the issue.”
BREEDERS’ CUP: Greg Avioli, president/CEO, said the Breeders’ Cup “has not issued a formal policy statement on the slaughter legislation before Congress. However, it is the strong consensus of our board that slaughter is inhumane and any and all reasonable options other than slaughter should be pursued. In furtherance of this position, proceeds from this year’s Championships will go to multiple retirement organizations.”
CHURCHILL DOWNS INC. Officials did not reply to requests for a position statement. Churchill Downs Inc, created the Greener Pastures program in conjunction with the Thoroughbred Retirement Foundation and supports other retirement and retraining programs.
FASIG-TIPTON: Did not reply to requests for a position statement. Under the leadership of the late John Hettinger, Fasig-Tipton’s majority shareholder, the company created Blue Horse Charities to offer support to various retirement and retraining organizations. Hettinger was the industry’s leading anti-slaughter advocate.
JOCKEY CLUB: Spokesman Bob Curran gave no position on H.B. 6598 but said the official breed registry “is opposed to the slaughter or processing of Thoroughbreds for consumption by humans or animals. This includes the sale and/or transportation of Thoroughbreds for slaughter or processing for consumption by humans or animals.” The Jockey Club is a member of the Unwanted Horse Coalition.
KEENELAND ASSOCIATION: Did not reply to requests for a position statement. Keeneland and its foundation have supported Thoroughbred retirement and retraining organizations, including the Thoroughbred Retirement Foundation and Rerun.
KENTUCKY EQUINE EDUCATION PROJECT: A statement from executive director Patrick Neely said: “It has been a topic of discussion in some of KEEP’s industry working groups but no formal position has been taken at this time.”
KENTUCKY THOROUGHBRED ASSOCIATION: Did not reply to requests for a position statement. KTA lists several Thoroughbred retirement organizations on its Web site.
MAGNA ENTERTAINMENT (owns Santa Anita, Gulfstream, Laurel, Pimlico, Lone Star Park, Remington Park, Golden Gate Fields): Does not have a position statement on slaughter or current anti-slaughter legislation, according to an official with the company. OCT. 10 UPDATE: MAGNA INSTITUTES NEW POLICY. CLICK HERE FOR DETAILS.
NATIONAL HORSEMEN’S BENEVOLENT AND PROTECTIVE ASSOCIATION: CEO Remi Bellocq said he could not provide a yes or no answer to whether the organization supports a ban on slaughter or H.B. 6598 because of the diversity of the 30 HBPA affiliates across North America. “Our horsemen and horsewomen fall across the spectrum on this issue,” Bellocq said. The National HBPA is a member of the Unwanted Horse Coalition. Bellocq said “this shouldn’t be defined necessarily as a ‘slaughter for human consumption’ issue but, rather, an ‘unwanted horses’ issue. To a person, if given a choice, horsemen would much prefer finding a home and/or second career for their horses as opposed to slaughter. Unfortunately, no matter what legislation (state or federal) is passed, the real problem – the number of unwanted horses – will still exist. To stem the number of unwanted horses, education and awareness are a key first step to successfully bring the number down.
“To that end, in 2005 National HBPA was one of the founding members of the Unwanted Horse and we continue working actively within the UHC to better educate horsemen about the options including, should all else fail, humane euthanasia. The UHC has set-up a big tent under which all the wonderful horse rescue programs can work together. If we truly made an industry-wide effort to centralize, for example, an ex-racehorse outplacement / adoption program, I am convinced many could be placed with willing owners. Why not, for instance, establish a national site modeled after Petfinder.com? Already, organizations like the Illinois HBPA have created similar approaches with success (see Illinois HBPA’s Horses Wanted link.”
NEW YORK RACING ASSOCIATION: Did not reply to requests for a position statement. NYRA offers support to the Exceller Fund, which helps place retired horses and has supported the Thoroughbred Retirement Foundation.
THOROUGHBRED HORSEMEN’S ASSOCIATION: CEO Alan Foreman said the organization has not taken a position on the current legislation. “There will be a new Congress in January and we will visit the issue then,” Foreman said.
THOROUGHBRED OWNERS AND BREEDERS ASSOCIATION: Position statement from TOBA president Dan Metzger: “We are categorically opposed to the slaughter of Thoroughbreds, and urge all those involved in the Thoroughbred industry to support rescue and adoption efforts and to work together to find humane means of dealing with the problems presented by Thoroughbreds no longer suitable for racing or breeding.” Metzger did not indicate whether or not TOBA has a position on H.B. 6598. TOBA is a member of the Unwanted Horse Coalition and is affiliated with Thoroughbred Charities of America, which supports numerous horse retirement and retraining operations.
THOROUGHBRED OWNERS OF CALIFORNIA: Did not reply to requests for a position statement. TOC’s Web site offers advice to a horse’s “last owner” and pushed for a first-of-its-kind charitable fund, the Calfornia Retirement Management Account (CARMA), to solicit and distribute purse checkoffs for retirement and retraining programs. Transport for slaughter is illegal in California.
THOROUGHBRED RACING ASSOCIATIONS: Executive vice president Chris Scherf said the organization of North American racetracks has adopted no official position.
Tags: agriculture committee, alex waldrop, anti-slaughter legi, association of racing commissioners international, blue horse charities, bob curran, bob goodlatte, Breeders' Cup, carma, chris scherf, churchill downs, collin peterson, congressional horse caucus, dan metzger, ed martin, fasig-tipton, greener pastures, Greg Avioli, h.b. 6598, hbpa, horse slaughter, Jockey Club, john hettinger, Josephine Abercrombie, judiciary committee, Keeneland, kentucky equine education project, kentucky thoroughbred association, kta, Magna Entertainment, nancy pelosi, national horsemen's benevolent and protective associati, National Thoroughbred Racing Association, New York Racing Association, nhbpa, NTRA, ntra pac, nyra, patrick neely, Paulick Report, prevention of equine cruelty act, Ray Paulick, RCI, remi bellocq, Thoroughbred Owners and Breeders Association, thoroughbred owners of california, thoroughbred racing associations, thoroughbred retirement foundation, TOBA, toc, tra, unwanted horse coalition
Posted in Horse Slaughter, Horse Welfare, Industry Organizations | 21 Comments »
Tuesday, September 30th, 2008
By Ray Paulick
Shares in Magna Entertainment (MECA), the debt-ridden racetrack operating company controlled by Frank Stronach, plunged by 56% in Tuesday’s trading on the NASDAQ exchange. Closing at $1.75 per share (down from $4.00) under extremely heavy trading (more than 30 times higher than the daily average), MECA was NASDAQ’s biggest percentage loser on a day when the Dow and NASDAQ each gained between 5%-6%.
MECA stock has plummeted by 91% in the last 52 weeks, and its market capitalization has shriveled to less than $10 million.
Magna Entertainment has listed debt of $571 million. The company recently announced 30-day extensions on a loan maturity date from a Canadian bank and an $80-million bridge loan from its affiliated real estate company, MI Developments, that will be due Oct. 15 and Oct. 31, respectively, along with a $100-million payment due MI Developments Oct. 31. Major shareholders in MI Developments have fought extensions of the bridge loan and repayment. On Monday, John Barnett resigned from the board of MI Developments. The company’s CEO, John Simonetti, stepped down in August and was replaced by Dennis Mills, a longtime Stronach ally.
The current bank and credit crisis only heightens the gravity of Magna’s poor financial health.
Magna Entertainment operates, among other tracks, Santa Anita Park in Southern California, the site of the 2008 and ’09 Breeders’ Cup world championships. The Oak Tree Racing Association, a separate non-profit entity that leases the Santa Anita racetrack from Magna, is the organization with which Breeders’ Cup has contracted to host the championships. Any financial failings or potential bankruptcy by Magna Entertainment will not affect the Breeders’ Cup, according to Greg Avioli, president and CEO of Breeders’ Cup Ltd.
“Because of Oak Tree’s contractual structure, they are fully protected from any possible Magna bankruptcy in terms of their ability to operate the meet in their standard fashion,” Avioli said. “(Oak Tree Racing Association) is a separate legal entity. They have a lease on the facility, and that lease would be maintained.”
Avioli did say that the Breeders’ Cup developed contingency plans to move the championships to Hollywood Park, but not because of Magna’s financial situation. “We had contingencies in place in the event that there might be problems with the new track,” he said, in reference to the new Pro-Ride synthetic surface recently installed at Santa Anita. According to published reports, horsemen and jockeys generally seem satisfied that the new surface is safe and formful after one week of racing during the Oak Tree meeting.
The pending due dates on loans are not the only question marks concerning Magna Entertainment. A California judge ruled this week that a shopping mall development planned for a section of Santa Anita’s parking lot cannot go forward. In Maryland, where Magna owns Laurel and Pimlico racetracks, a referendum is coming up in November on slot machines.
“The stock only trades on option values,” one market analyst observed, “and the option value is declining because the potential options for the company are quickly disappearing.”
Copyright © 2008, The Paulick Report
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Tags: bank crisis, Breeders' Cup, bridge loan, credit crisis, Frank Stronach, Greg Avioli, Hollywood Park, laurel, Magna, Magna Entertainment, meca, mi developments, oak tree, oak tree racing association, Paulick Report, pimlico, Ray Paulick, santa anita, santa anita park, Slot machines, stronach
Posted in Breeders' Cup, Magna Entertainment, Synthetic surfaces | 7 Comments »
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