MEC '07 losses total $113,000,000
 

http://www.drf.com/news/article/92634.html

DRF's Matt Hegarty lays out Magna's financials announced this a.m.

'Cannot continue without turnaround' according to MEC auditor... Lost $43MM in 4th quarter alone.

That's pocket change sprinkled with a little lint for Frank.

Agreed. Frank is a multi-billionaire. At 5% intrest his money makes that much money. He needs to get his head out of his ass and stop dreaming up fake slot machines for non-horseplayers. He gets what he deserves. Bad management, bad ideas, and lack of understanding about the industry andn his "real" customers = losing money.

Whatever anyone may think of Stronach, this is very troubling news for the entire Thoroughbred industry, and could have serious repercussions in the future.

The REALLY scary part is that MEC believes that Gulfstream is having trouble (declining attendance, handle, etc) because people have to walk too far from the parking lots due to constructions. What about being a track that is no longer conducive to getting a horse to the Kentucky Derby via a "traditional" stretch out in distances of races (1 mile - 1 1/16 miles, 1 1/8 miles). Not to mention a lame condition book being written due to the lack of funds to support a good purse structure.

Does anyone at MEC know what it takes to run a race track, or has Mr. Stronach "excused" nearly all of the capable individuals because their opinions differed from his.

OK I'll step down from the soap box now.

Absolutely! How enticing is a potential transaction after reading those numbers?? The salvation may be that it becomes a real estate play....But then the acquirer may not give a sh%t about the actual business...They may just be looking for a short term "flip." Very scary.....

well losing a few days at sa didnt help..but maybee an increase in purses would help at gs..go out with a bang.. the energy drink was a bust..he needs to get somebody with a brain..to fire him..

Don't let Phil hear you say that. He's probably still working off the caffeine high from Donn weekend.

I don't buy the part about Stronach ruining things by building a 9F track. What's gone now? A few n1 and n2x Allowances and one Graded race at 8.5F? I'd much rather see racing on a 1 1/8 track any day over a 1 mile track. And there is realy no comparing grass racing over a 1 mile track vs a 7/8.

It's also not as if GP is now irrelevant as far as prepping goes. Barbaro did ok prepping there. And last year, Street Sense didn't run at 3 until mid-March so the FL Derby was certainly not going to be on his schedule.

Also, it will be interesting to see how GPs 3 yo race in April draws.

As far as the construction, it is unbelieveably ridiculous. If you park on the west side of the track, you can either walk 1/3 mile or take a shuttle which is pretty nuts on days when there are 2,000 people there.

And you can't deny $113,000,000 isn't a lot of money. That buys a lot of strudel or cheescake.

live from the m.e.c boardroom
http://www.youtube.com/watch?v=5dbhNzOIfqU

not sure who is frank

I think they have lost over $300 million in the last 3 years.

I have always maintained that when Frankie boy passes the Board will move quickly to liquidate all the assets of ME and dissolve the company. Maybe it will get tied up for a few years but I dont have much faith that his tracks will survive as racetracks.

get rid of woodbine for starters

He doesnt own Woodbine. It makes money...

You would have to think that his son is involved in owning this tracks in the future, no?

I don't know if he is the kid from Caddyshack or the next Einstein but he seems to have the same passion as Frank

golden gate..

His kid is a charter member of the lucky sperm club. The kid from Caddyshack is insulted by the inference and Einstein the horse would have a better shot of warding off the board members.

Woodbine is also a great place. Best buffet at a racetrack in North America.

This industry is like the airline industry.
Only its fractured into all these pieces
seemingly trying destroy each other,
not that many people want to fly,
and federal government is giving little support.

So I guess its much tougher to run a track
than an airline.

I really thought the sport might thrive when the
internet crept in a while back. But for many
complex reasons it
seems that this has not worked out.

Tough business.
Too much cooperation among
competitors required I guess.

Someone shoould introduce Stonarch to Mr Cella.

I agree. Woodbine is a very good place to watch a race at.

Food is important.

Why do you say this? Santa Anita will not continue to be a racetrack if it does not make money. There is no alternate form of revenue so who would step forward to buy it? If Magna entertainment gets out of the racetrack business who will buy it as a racetrack? And with the development on the property what racing entity could afford to purchase GP and keep it running? The board of Magna Int has already tried to shutdown ME in court but who stops them if Frank isnt around? His wife? I doubt she will go to the trouble.

Worst track buffet in N. America? Calder Turf Club. Complete swill....and the wait staff and hotesses stepped right out of a time machine from 1976.

have they looked under the couch cushions yet--some loose change may have fallen down there.

every sperm is sacred....

From todays Bloodhorse article
MEC has classified Remington Park, Thistledown, Great Lakes Downs, and Portland Meadows as discontinued operations as of Dec. 31, 2007. All four tracks are for sale, as are former proposed racetrack properties in Dixon, Calif., and Ocala, Fla., among others

Santa Anita has been there for a long time (since 1935, and its earlier incarnation, from before 1900.) It is unlikely to be tossed onto the scrapheap without a fight, unlike minor tracks like GLD. And who says that SA is losing money? As indicated, MEC includes lots of smaller venues and ancillary businesses. But the biggest problem is poor management decisions, like the Sunshine Millions - all that money, diverted from other, open stakes races, to reward inferior horses? It is possible to run a racetrack profitably; buying a major MEC track at a discount because the previous management were idiots would be a smart move for, say, Churchill Downs' conglomerate.

I may be wrong about this, but aren't their serious legal obstacles to making Santa Anita anything other than a racetrack? I believe this came up when Magna bought the track initially.

Not necessarily wide legal obstacles, but certainly some local zoning and land use issues... As usual, Stronach ran afoul of such immediately upon taking over at Arcadia.

From The Conservancy's fine website.. ( http://www.laconservancy.org/index.php4 )

"" The Los Angeles Conservancy has worked to preserve the historic Santa Anita Racetrack since 1999, when owner Frank Stronach erected large elevator towers that dramatically altered the racetrack’s façade, as well as a new restaurant in the historic grandstand, without submitting the project for appropriate public review. Most recently, the Conservancy responded to a Draft Environmental Impact Report (DEIR) on developer Rick Caruso’s proposed retail/entertainment project at the property’s south parking lot.

In addition to its architectural significance, shaped by noted architect Gordon Kaufmann, and its associations with racing history, Santa Anita was the largest Assembly Center for the Japanese-American internment in World War II. About 20,000 Japanese-Americans lived at the racetrack during 1942, in temporary housing in the stable area and in barracks constructed on the site’s parking lot. The racetrack was determined eligible for listing in the National Register of Historic Places in 2006.

In April 2007, the Arcadia City Council approved a plan to develop a 830,000-square-foot commercial, retail, and office project on the south parking lot of the racetrack. The Conservancy is particularly concerned about the potential demolition of the property’s 1938 Saddling Barn and South Ticket Gate. The Conservancy has asked developer Caruso to examine alternatives to this plan, as well as ways to reverse the inappropriate 1999 elevator tower additions. ""

http://www.laconservancy.org/issues/...ist.php4#santa

some excerpts from a story at washington post:


"..... and reported in its financial statement that its "ability to continue as a going concern is in substantial doubt "


Magna, which also lost $288.3 million between 2004 and 2006, is carrying long-term debt of $879.9 million with $209.4 million of that debt due this year. (my bold)


Maryland Racing Commission Chairman John Franzone has called on Magna to detail its finances at the commission's upcoming meeting March 18.


Magna's stock fell 9 cents yesterday, with a closing value of 79 cents per share. On Feb. 14, NASDAQ warned the company its stock would be delisted if the share value didn't rise above $1 by this summer.

Every quarter, [Magna says,] 'We're going to sell assets and reduce debt,' and nothing ever happens."


http://www.washingtonpost.com/wp-dyn...022903925.html

that's the link to the story. much as magna seems to be fodder for jokes, this is a very, very serious issue. i'm not sure at this point that magna can escape bankruptcy, with that much debt due. where in the world can they get financing? and the more serious issue, how do they come up with a plan to get out of bankruptcy if that's the way they end up going. i don't think that slots, even if they pass in MD, will come soon enough to fix this problem. it is a HUGE problem, and has been staring frank in the face for years, seemingly with him only using a 'deer in the headlights' approach to solving these problems.

If Remington closes,
Retama might have a chance with the TB's.
Now if I could blow up Louisiana.

Please God. For the small guys...
Save us. I have no place to go.

Seems odd they would sell Remington. I thought slots were doing very well there.

Seems to be alot going at Remington for a "discontinued" operation.

Come to think of it, Portland has been running all year too.

Perhaps it's only "discontinued" for accounting purposes ...

Maybe the federal government will offer a $15 billion dollar bailout to racetracks.

Remington Park is starting their quarterhorse meet on Friday. As for selling Remington, last I heard Magna was trying to sell half of their interest in it. Last week there was a report that the horsemen's association is going to buy RP. Personally, I would love to see the Cherokees buy Remington. They bought Will Rogers Downs and with slots, MSW races now run for purses of $18000 as opposed to $5000 2 years ago.

You don't have to be a fan of MEC, Stronach, Gulfstream or any other MEC asset to know that this is problematic for the entire industry. That's why like him/it or not, you almost have to "root" for success. Regardless, as we all know, the business model -- many of the business models -- in this industry is "broken" so to speak. If MEC gets rid of the fat, dead assets, etc. -- fast enough -- they can survive. If VLT's are going to be MEC's focus to make some of these tracks "profitable" then very simply -- maybe it will work, maybe it won't. This is a publicly traded company and maximizing value will always take precendent -- in this case over the racing fan and horsemen, LOL.

I think this is similar to the hospital industry -- both in business model(s) and life cycle(s). Look at the tracks that make money -- those with and without VLT's. Their business model is organic and has adapted. Sure, we can all aruge about concerts, enought seats for fans, racing taking a backseat, and so on. That is not part of the solution -- it's part of the problem. Alternative revenue sources are the simple answer; and VLT's are just one of alternative revenue source. There are several others.

This is also about "perspective" and which is working. Like I've said from the very beginning -- look at Woodbine. It works, both from a financial perspective and from a fan/horsemen perspective. On the other hand, Finger Lakes -- might be profitable, I don't know; but from a horseman perspective, to me, that doesn't work. I don't know what the future holds for Finger Lakes, and I like having that "outlet" for horses, however, I don't think it's working from fan/horsemen perspective.

Eric