The Maryland Racing Commission is expected today to approve Magna Entertainment Corp. as majority owner of Pimlico Race Course and Laurel Park, clearing the way for Magna's promised revitalization of racing in the state.
The nine-member commission, which regulates racing in the state, will meet at 10 a.m. at Laurel to consider whether the Canadian-based racing conglomerate, the largest owner of racetracks in North America, is rich enough and of suitable character to become 51 percent owner of the Maryland Jockey Club.
Magna would assume control of the state's major thoroughbred tracks, as well as the Preakness, in a deal valued at $117.5 million. Pimlico and Laurel would become the 12th and 13th tracks in the growing Magna empire.
The commission's purview is limited by law to two issues when considering potential new owners for licensed tracks: financial viability and character. According to John Franzone, one of the most outspoken commissioners, Magna has been "super forthcoming" in furnishing background and financial information to the commission.
Asked whether commissioners have spotted problems with Magna's potential ownership of Pimlico and Laurel, Franzone said, "Not an inkling or ripple of a problem."
Other commissioners echoed that sentiment. But they also expressed concerns about possibly losing the Preakness and about Magna's history of not following through on promised improvements at its tracks in other states.
The transfer of majority ownership of the Maryland Jockey Club to Magna could mean dramatic changes for Maryland racing. Frank Stronach, the 70-year-old chairman of Magna, has said he plans to tear down Pimlico and build a new track in its place.
"I want to get Pimlico back to its old, glory days," Stronach said during a brief telephone interview last week from his office near Toronto.
Stronach also said he plans to rebuild Laurel, but only after completing the resurrection of Pimlico. His vision for tracks includes shops, restaurants and music venues.
"Pimlico's first," he said. "Pimlico will be the showcase. We're going to be gauged by what we do there."
Stronach has a previous commitment and will not attend today's meeting, he said. He travels extensively as chairman of Magna International Inc., which he started as a one-man operation in a Toronto garage in 1954 and built into one of the leading manufacturers of auto parts in the world.
A passionate racing fan with three farms and hundreds of horses, Stronach began buying racetracks in 1998 and then, in 2000, founded Magna Entertainment Corp. to oversee them. Magna now owns 11 tracks and has deals pending to buy three more, including Pimlico and Laurel.
In addition to revitalizing racing by attracting new fans to first-rate facilities, Magna's ambitious plan calls for creating a network of its tracks' races on which people can bet via telephone, TV and computer.
"I think everybody knows I'm committed to live racing," Stronach said. "I built a company from scratch. I want to be able to do the same thing with racetracks."
It is unclear how much of Magna's plans for Maryland racing will be revealed today. Lou Ulman, chairman of the commission, said he expects a forthright exchange between commissioners and Magna officials.
"I think that commissioners are going to want a lot of information," Ulman said. "And I think Magna will try its best to provide it. They want to get started on the right foot."
Commissioners have concerns. Terry Saxon wants a commitment backed by a bond or letter of credit for immediate backstretch improvements. Ellen Moyer wants guarantees that Magna will never move the Preakness out of Maryland.
Safeguarding the Preakness will probably be an issue left to legislators in the coming session, commissioners said. State law contains provisions for keeping the Preakness, but they are not ironclad and need to be strengthened, commissioners said.
Joe De Francis, president and CEO of the Maryland Jockey Club, would remain in day-to-day charge of the tracks and stands to benefit mightily, as would his sister, Karin, from the financial windfall of selling to Magna. He said the Preakness would stay put.
"There's absolutely no plan or thought ever to move the Preakness anywhere," Joe De Francis said.
Although commissioners are limited in what they can require of Magna before approving its majority purchase of the Maryland Jockey Club, commissioners view their authority afterward as broad and powerful. Once Magna takes over under the license held by the MJC, commissioners said, they can make demands of Magna as a licensed track operator in the state.
Most of all, perhaps, commissioners want assurances that Magna will carry through on commitments. Commissioners are especially wary after sometimes rocky dealings with the Maryland Jockey Club and its history of unfulfilled promises. They are also aware that Magna has been slow to make promised upgrades at some of its tracks.
"I'm impressed with the things he says he wants to do," Moyer said of Stronach. "But of all the tracks he owns, where will Pimlico and Laurel rank? Fifth, 10th or first? Will they be his flagship tracks? And will they be his flagship tracks even if we don't get slots?"
Stronach said last week, as he has said before, that his plan for investing millions of dollars in Maryland racing does not depend on Pimlico and Laurel's getting slot machines. But he would welcome them, he said, as help in keeping Maryland racing competitive with tracks in neighboring states that have them.
Said Franzone: "This whole slots dynamic is a huge factor in what they'll be able to do. I don't think they need slots for what they want to do, but slots would be icing on the cake for them."
Franzone and Ulman have met with Magna officials and discussed their tentative plans. Before tearing down Pimlico, they must decide on future stabling for the state's racehorses. Under consideration, Franzone said, are upgrading the Bowie Training Center, closing Bowie and expanding the stables at Laurel, or building a new training center at an equal distance between Pimlico and Laurel.
"They see this as a strategic masterpiece for them," Franzone said of Maryland racing and especially the Preakness. "I desperately want to believe they'll do what they say. If they execute just half of what they're talking about doing, then we'll be 20 times better off than we are now."