- The Washington Times - Tuesday, July 16, 2002

Laurel Park and Pimlico Race Course have been sold to the nation's largest racetrack operator, a move that could bring slot machines, upgraded facilities and even the Breeders' Cup in the next few years.

Magna Entertainment Corp. agreed to a $117.5million deal yesterday that would give it 51 percent of equity and management control of the Maryland Jockey Club. President Joe De Francis and vice president Karin De Francis, who inherited their roles upon their father Frank De Francis' 1989 death, will retain daily operations control and 49 percent equity.

Magna is a Canadian corporation that has bought 11 North American tracks, including Santa Anita Park in California and Gulfstream Park in Florida, over the past two years.

The sale was first reported by The Washington Times on May17. Joe De Francis denied at the time that the deal was pending. But yesterday, when he announced the agreement, De Francis conceded that the partnership is needed for future progress.

"The combination of Magna Entertainment together with our family's strong local ties will create a dynamic alliance that gives Maryland racing an unparalleled chance to succeed in these intensely competitive times," he said.

The deal is expected to take several months to complete and requires the approval of the Maryland Racing Commission. Several commissioners quietly have expressed concern over Magna's disappointing performance at Gulfstream earlier this year. A non-Maryland owner also worries horsemen after a Canadian firm's poor ownership tenure before selling Bowie Race Course in 1985 to the MJC. However, several state racing officials expect the sale to be approved after lengthy commission hearings. Jockey Club officials recently met with the House Ways and Means committee to resolve the state house's concerns.

The sale of the Jockey Club after 15 years under De Francis family control brought mixed reaction from local officials. Some are concerned about the loss of in-state ownership, others believe that new leadership is needed to gain approval of slot machine legislation next year such legislation has been rejected several times while also providing funding to renovate aging facilities.

"It's a step in the right direction. New thinking, new look, new people," said former Pimlico general manager Chick Lang. "It's obvious they're not moving forward under the present structure of racing in this state. Maryland racing is not moving forward. You can't hang it on one single factor. You can talk about De Francis, but somebody has to straighten out the Maryland Thoroughbred Horseman's Association and the Maryland Racing Commission."

But with local management expected to remain for at least the short-term, racing officials don't expect much visible change. Long-term infrastructure planning and legislative tactics, often quietly implemented, would fall to Magna.

"First blush, it looks like business as usual and we just changed partners," said Alan Foreman, a Maryland Thoroughbred Horsemen's Association official. "But it would be premature to draw any conclusions knowing what's in store for Maryland racing with this new alliance. There are lots of questions."

Magna's entrance could help bring the Breeders' Cup to Pimlico in the coming years. The Jockey Club has long sought the annual fall championship card rotated nationally, but needs significant infrastructure improvements. However, Magna will play host to the next two Breeders' Cups at its Arlington Park and Lone Star Park, respectively. Monmouth Park in Oceanside, N.J., is considered the front-runner to become the first Mid-Atlantic track to play host to the 18-year-old event, but 100,000 attendance for the Preakness at Pimlico each year could lure the Breeders' Cup.

The De Francises essentially gained a four-year contract under the deal that allows Magna to buy out the siblings in 2006, though the family can sell to Magna beforehand. Sources close to talks say the De Francises role needed more than two months to finalize, with the siblings earlier seeking a six-year deal. Joe De Francis also joins Magna's board of directors.

The deal increased by $12million over the last two months with several minority partners eliminated. The Bowie Training Center is also included.

Magna's interest in Maryland racing was two-fold to gain a Triple Crown event and quality racing for its XpressBet simulcasting network. Magna chairman Frank Stronach has openly coveted the Preakness Stakes, the 127-year-old second leg of the Triple Crown. The race can't be moved outside Maryland without legislative approval, which would be very unlikely.

"The acquisition of a majority interest in Pimlico Race Course and Laurel Park will mark an important milestone in our strategic program of growing Magna Entertainment's racing operations throughout North America," Stronach said.


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