SUN ON MAGNA: Autocracy; Misplaced risks

[Kasept]

Big Baltimore Sun Sunday report profiling machinations of Stronach and growing reality of impending collapse...

http://www.baltimoresun.com/business...ll=bal-all-nav

[ninetoone]

I think one of those Horse Wizard machines would be a good contest prize for the next DT contest...you could probably get one for a song these days...

[Cannon Shell]

Originally Posted by ninetoone

I think one of those Horse Wizard machines would be a good contest prize for the next DT contest...you could probably get one for a song these days...

I called Frank and he said he would see one to us for $11.3 million each. He figures if he can sell them for that much he can breakeven on the whole experiment.

[phystech]

Even thoguh the Horse Wizard was a complete flop and they shut down access to the machines, they still sit in the room Magna renovated to house them at Laurel. It is a beautiful room. It has LCD/plasma tvs that are large and easy to see. Are we allowed to use that room to watch and wager on the races? No!

It just sits there, as it has for over 2 years now, collecting dust while we watch the crappy tv's out in the clubhouse or grandstand.

Maybe they can renovate the bathrooms next and then suggest to us we go crap outside next to the railroad tracks.....

[blackthroatedwind]

It's an interesting article ( I tried to post it last night but I couldn't get the link to work ). A few things struck me, beyond the completely obvious, one being that they don't mention specifically one of the problems. Stronach paid way too much for all these properties, which is specifically why they were pretty much immediately worth less than he paid for them, and of course one of the big reasons Magna Entertainment got in financial trouble. $130 Million for the two Maryland racing properties? If memory serves me right the general consensus had them worth $30 to, maybe, $40 million at the time of purchase. The other point the article brings up a few times is that, supposedly, Stronach didn't have anyone to tell him that some of his ideas, big ideas, were wrong. I'm not sure that's the way many would put it. I think he had people who told him those things.....but he fired them.

He has done some good things in Maryland. The new racing surfaces at Laurel are great. The dining rooms at both Laurel and Pimlico have been upgraded substantially. The bar area on the third floor at Laurel, by the dining room, is great. Unfortunately, the bizarre choices in South Florida have overshadowed that dramatically. While building a smaller plant is, in and of itself, a good idea, what was eventually created is a disasterous maze of confusion and confinement.

[ninetoone]

Stop the press, Magna's up 10%...oops, that's only 8 cents.

[phystech]

Originally Posted by blackthroatedwind

Stronach paid way too much for all these properties, which is specifically why they were pretty much immediately worth less than he paid for them, and of course one of the big reasons Magna Entertainment got in financial trouble. $130 Million for the two Maryland racing properties?

Note - minor nit-pick here - Magna bought three properties from MJC. Laurel, Pimlico and Bowie Training Center.

Originally Posted by blackthroatedwind

He has done some good things in Maryland. The new racing surfaces at Laurel are great. The dining rooms at both Laurel and Pimlico have been upgraded substantially. The bar area on the third floor at Laurel, by the dining room, is great.

The old dirt track at Laurel was fine so there's no upgrade there. Changing the track circumference removed the 8.5f races - you either get 1 turn miles or 9f's now. Eliminating the 8.5f race was a major downgrade, IMO.

The turf course at Laurel was a major, major outstanding improvement - now they need to run their meet when they can take full advantage of that wonderful tuirf course. Doesn't do you much good to have a fantastic grass racing strip in Dec, Jan, Feb and most of March - and that's almost half of the meet.

In the last 11 years, I can't say I've seen much change in either dining room at either facility but if you feel they have been upgraded, I'll take your word - to each his own. I do agree that the bar area near the dining room is a major improvement.

Now, if they could just get rid of the mudcraters in the horseman's parking lot....

[philcski]

I admire Frank's passion. Seriously. He really does love the game, and misguided or not puts a TON of money into it. With all of the negative talk of Florida/Maryland, people have overlooked his one true "startup", Lone Star, which is a TREMENDOUS facility. Also, I've been to a lot of stud farms and I find Adena to be the best run facility, with a great mix of top notch stallions and more affordable types as well.

That said, DeFrancis' claim that his help is to blame for the misappropriation of funds by MEC is significantly off base. Even from the periphery it's clear the guy has only one opinion that matters (his own)- you could have a panel of the greatest minds in the game and he'd still be convinced the way to make money is cross market some crappy energy drink with girls dressed up in lederhosen. Regardless of everyone's feelings about the new GP, there's tons of potential there- for example, the poker room there is terribly underused and undermarketed, it's a great space and down the road there's high limit games full ALL THE TIME. Poker is risk free and high margin, and would require ZERO additional capital investment. The slot parlor, while I feel South Florida is already oversaturated with slot-style gaming, has improved and really cries out for a Las Vegas veteran marketer to lead the way (which he's done). In Maryland they were behind the eight ball from the beginning paying a 100% premium for two aging facilities with little or no growth potential, and honestly slots won't magically change that. Alternative gaming has been in place too long in neighboring states and being last to the table leaves them the scraps.

[blackthroatedwind]

Good point about the change in the circumfrance of the dirt track....as well as the lack of use of the turf course.

I think the food itself has been greatly improved....for how much that matters.

[phystech]

Anyone know or heard if Magna will be shutting the doors on all of the barns this year when the spring meet at Pimlico is over?

Can Frank afford to make all of the horsemen leave and stable somewhere else for the summer? And then hope they all come back?

[gamblin4ever]

Originally Posted by philcski

I admire Frank's passion. Seriously. He really does love the game, and misguided or not puts a TON of money into it. With all of the negative talk of Florida/Maryland, people have overlooked his one true "startup", Lone Star, which is a TREMENDOUS facility. Also, I've been to a lot of stud farms and I find Adena to be the best run facility, with a great mix of top notch stallions and more affordable types as well.

That said, DeFrancis' claim that his help is to blame for the misappropriation of funds by MEC is significantly off base. Even from the periphery it's clear the guy has only one opinion that matters (his own)- you could have a panel of the greatest minds in the game and he'd still be convinced the way to make money is cross market some crappy energy drink with girls dressed up in lederhosen. Regardless of everyone's feelings about the new GP, there's tons of potential there- for example, the poker room there is terribly underused and undermarketed, it's a great space and down the road there's high limit games full ALL THE TIME. Poker is risk free and high margin, and would require ZERO additional capital investment. The slot parlor, while I feel South Florida is already oversaturated with slot-style gaming, has improved and really cries out for a Las Vegas veteran marketer to lead the way (which he's done). In Maryland they were behind the eight ball from the beginning paying a 100% premium for two aging facilities with little or no growth potential, and honestly slots won't magically change that. Alternative gaming has been in place too long in neighboring states and being last to the table leaves them the scraps.

LoneStar had racing about 10yrs before MEC got it. Since they took over the track has lost Cory Johnson and the racing has gone downhill quickly also.
If you look back since MEC more 4K claiming races have started filling the cards and even Steve Assmussen has been keeping his better horses away except for the stakes. LoneStar at one point was on its way to being a top track, now it can't even compete w/ Delta Downs,Sunland,Evangeline Downs in daily purses. The TB season is getting shorter also. From BC host to 4K claiming races, not a step forward IMO..

[docicu3]

Originally Posted by blackthroatedwind

It's an interesting article ( I tried to post it last night but I couldn't get the link to work ). A few things struck me, beyond the completely obvious, one being that they don't mention specifically one of the problems. Stronach paid way too much for all these properties, which is specifically why they were pretty much immediately worth less than he paid for them, and of course one of the big reasons Magna Entertainment got in financial trouble. $130 Million for the two Maryland racing properties? If memory serves me right the general consensus had them worth $30 to, maybe, $40 million at the time of purchase. The other point the article brings up a few times is that, supposedly, Stronach didn't have anyone to tell him that some of his ideas, big ideas, were wrong. I'm not sure that's the way many would put it. I think he had people who told him those things.....but he fired them.

He has done some good things in Maryland. The new racing surfaces at Laurel are great. The dining rooms at both Laurel and Pimlico have been upgraded substantially. The bar area on the third floor at Laurel, by the dining room, is great. Unfortunately, the bizarre choices in South Florida have overshadowed that dramatically. While building a smaller plant is, in and of itself, a good idea, what was eventually created is a disasterous maze of confusion and confinement.

Andy with the exception of the day you were there Laurel Race Track has no fans......YES NO RACING FANS in the seats or the dining area to enjoy these amenities.....simulcasting is everything at Laurel in terms of betting. The track is completely dead with less than 100 fans in the stands most days so renovations are completely unused except for Staurdays of big racing days.

[docicu3]

Originally Posted by blackthroatedwind

It's an interesting article ( I tried to post it last night but I couldn't get the link to work ). A few things struck me, beyond the completely obvious, one being that they don't mention specifically one of the problems. Stronach paid way too much for all these properties, which is specifically why they were pretty much immediately worth less than he paid for them, and of course one of the big reasons Magna Entertainment got in financial trouble. $130 Million for the two Maryland racing properties? If memory serves me right the general consensus had them worth $30 to, maybe, $40 million at the time of purchase. The other point the article brings up a few times is that, supposedly, Stronach didn't have anyone to tell him that some of his ideas, big ideas, were wrong. I'm not sure that's the way many would put it. I think he had people who told him those things.....but he fired them.

He has done some good things in Maryland. The new racing surfaces at Laurel are great. The dining rooms at both Laurel and Pimlico have been upgraded substantially. The bar area on the third floor at Laurel, by the dining room, is great. Unfortunately, the bizarre choices in South Florida have overshadowed that dramatically. While building a smaller plant is, in and of itself, a good idea, what was eventually created is a disasterous maze of confusion and confinement.

Andy with the exception of the day you were there Laurel Race Track has no fans......YES NO RACING FANS in the seats or the dining area to enjoy these amenities.....simulcasting is everything at Laurel in terms of betting. The track is completely dead with less than 100 fans in the stands most days so renovations are completely unused except for Staurdays of big racing days.