MI Developments, the real estate spin-off of Magna International, reported a third-quarter profit of $11.5 million, but a $27.4-million loss at Magna Entertainment Corp. created a bottom-line deficit of $15.9 million. MEC is controlled by MID.
The real estate business results for the third quarter reflect $2.4 million in expenses related to a failed effort by MID to privatize racetrack owner MEC. In addition, MID this year has spent $6.9 million on severance packages.
In a release, John Simonetti, chief executive officer of MID, the company is "evaluating participating in the development of MEC projects, including MEC's underutilized land surrounding its premier racetracks and certain of its racing assets and (gaming) opportunities. The opportunities for growth within MEC are significant and, as holder of a 59% equity interest in MEC, MID has a strong and vested interest in seeing that MEC is successful in realizing these opportunities."
MEC president Jim McAlpine said the company would re-evaluate its strategy moving forward and look to control costs. Third-quarter losses were attributed to pre-operating and start-up costs incurred at Magna Racino, RaceONTV, and other European business developments; additional predevelopment and other costs, additional distribution, and production costs at HRTV; severance and union buyout costs at The Maryland Jockey Club; and other non-recurring costs tied to the redevelopment of the racing surfaces at Laurel Park.