Taking stock of race syndicates a scary proposition
Name the racetrack conglomerate that was scorned this week by The Motley Fool stock advice column listing its “5 Deathbed Stocks” for 2008? One comment read, “… the company’s dwindling margins (are) a sign of things to come. Margins are small as it is. They will shrink as purse strings around the country tighten.”
I’ll bet you answered Magna Entertainment Corp., owner of Gulfstream Park and Santa Anita, whose stock closed down to 51 cents Thursday. Wrong. The company is Churchill Downs Inc.
I was shocked. Churchill profits enough cash from just two racing cards, Oaks and Derby days, to fund the company for most of the year. But The Motley Fool is right a lot more than it’s wrong.
Also this week, Magna, which lost $113 million in 2007, was crucified in a conference call with stock analysts. It got to the point that Magna chairman Frank Stronach was pleading with analysts to find him a qualified chief executive officer. Of course, he overlooked the fact that the Magna CEO position has been a revolving door since the company was formed.
Here’s a prediction based on people learning from history: The last time Stronach was in a pickle like this, with his auto parts company, he hired daughter Belinda as CEO. Within four years, the company was back on track. He might call upon Belinda again for two more reasons: She is qualified, and she is one of the few persons on earth that he trusts.
It would be ironic if a woman helped bail out America’s most important horse racing company. It’s the kind of impact the Breeders’ Cup is searching for when it announced what I’ll call “Filly Friday.” Five filly and mare Breeders’ Cup races will be run on Oct. 24, with nine male Breeders’ Cup stakes the following day, all at Santa Anita.
The segregation has drawn poison darts from the media and fans alike. Admittedly, my first reaction was not good, either. But nothing like the venom spewed from other corners.
The outrage is misguided. The horsemen, fans and ESPN won’t boycott Filly Friday because of perceived sexism. All the move does is create more Breeders’ Cup marketing opportunities. The outrage masks more serious problems within the Breeders’ Cup and the sport itself.
For example, awarding consecutive Breeders’ Cups to Santa Anita was no magnanimous gesture. It smacked of desperation.
Churchill didn’t want it unless it could make more profit. Belmont Park couldn’t accept it because the New York Racing Association franchise was in dire straits. And don’t you think Magna would rather have had the 2007 Breeders’ Cup at Santa Anita and the 2008 Breeders’ Cup at Gulfstream?
That tells me there is something wrong with Gulfstream that is worth getting mad about.
Richard Eng’s horse racing column is published Friday. He can be reached at rich_eng@hotmail.com.