Magna Files For Bankruptcy; Tracks Face Uncertain Future

FOR SALE SIGN: In Baltimore, Hanah Cho notes the Chapter 11 filing “was expected after the company defaulted on a bank loan" tied to Pimlico Race Course, Laurel Park and the Maryland Jockey Club while it also faced a $40M loan payment due Thursday. Still, the “looming auction process for [MEC’s] assets heightens concerns about the future of thoroughbred racing in Maryland and about the Preakness,” as the company “essentially put all of its racetracks up for sale.” MEC Chair & CEO Frank Stronach said he would sell Pimlico, Laurel or Santa Anita Park “if the price is right” (Baltimore SUN, 3/6). MI Developments CEO Dennis Mills said that “all of MEC’s assets are on the block, but there will … not be a fire sale.” The GLOBE & MAIL's Greg Keenan reports if any bids for those assets are “insufficient, MI will hang on to them, which means [Stronach] may end up remaining in the racing game at the end of the restructuring, through his control of that company” (GLOBE & MAIL, 3/6).

TRACKING CHANGES: The DAILY RACING FORM’s Matt Hegarty wrote the sales agreement with MI Developments, if approved by the bankruptcy court, will leave MEC a “shell of its former self.” The only assets not covered by the agreement include Santa Anita, Laurel, and Pimlico, and two other companies, TV network HRTV and simulcast marketing partnership TrackNet Media Group, both co-owned with Churchill Downs Inc. Account-wagering company XpressBet and Lone Star Park were not included in the Chapter 11 filing, and both assets “have potential to buyers -- XpressBet has tens of thousands of customers, and Lone Star, which is profitable, has an outside chance of getting legislative or voter approval to operate slot machines within the next several years” (DRF.com, 3/5). Track officials said that Lone Star’s upcoming thoroughbred racing season starting April 9 “will continue as scheduled” (DALLAS MORNING NEWS, 3/6).

MEC's Chapter 11 Filing Leaves Santa Anita Dangling On Open Market

WORKING TOGETHER: In New Jersey, Justo Bautista reports New Jersey Gov. Jon Corzine Thursday signed an executive order creating the Governor’s Commission on the Horse Racing Industry, a 15-member panel charged with finding “long-term funding solutions for the state’s horse racing industry.” Corzine said that he “wants the commission’s recommendations by July 1, 2010.” Corzine named reps from the casino business and horse racing industry to the commission, and he said that it is “essential that the two work together so that both thrive.” Atlantic City’s casinos have been “subsidizing the racetracks for the past five years,” allowing the tracks to “remain competitive with tracks in neighboring states.” However, Corzine said that that arrangement “expires in 2011” (Bergen RECORD, 3/6).

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