Will 2004 be a turning point for the Frank Stronach-led Magna Entertainment, which frequently has stumbled and struggled since entering the racetrack ownership business in 1998 with its purchase of Santa Anita Park?
Stronach promised a different vision for racing: more entertainment, upgraded facilities. So far, his most positive accomplishment may have been the construction of the Palm Meadows training center in Palm Beach County in South Florida. It may not look like a smart business move on the surface (unless he manages to cut through bundles of red tape and turn Palm Meadows into a racetrack, a persistent rumor in the Sunshine State), but he made good on a promise, giving horsemen a viable alternative to stabling at Magna-owned Gulfstream Park.
Stronach also created a new racing event, the Sunshine Millions, pitting California-breds against Florida-breds in a synchronized and rich stakes day at Gulfstream and Santa Anita. There were cheerleaders and bikini contests, a unique entertainment program for a racetrack. So far, however, no other tracks to my knowledge have picked up on those specific types of entertainment.
Business is down at a number of Magna's 14 tracks. To be fair, the far more mature company, Churchill Downs Inc., also faces some difficult economic challenges at some of its properties.
The investment community hasn't shown a great deal of interest in Magna stock, which began the year with a share price of six and now is trading for just under five. Early in 2002, Magna share prices were near 10. On the other hand, rival Churchill Downs recently hit a 52-week high of 34.75.
But the coming year could be a good one. In California, where Magna also owns Santa Anita, Golden Gate, and Bay Meadows, there will be an initiative on the ballot giving tracks an opportunity to get slot machines if Indian tribes refuse to pay the state their fair share of taxes, which, thanks to favorable compacts, they have not been doing. New California Gov. Arnold Schwarzenegger was critical of the tribes, and his campaign would not accept donations from them. Slot machines are also in play in Maryland, where Magna owns Pimlico and Laurel Park. Another Magna track, Lone Star Park in Texas, should rebound off a poor year when it hosts the 2004 Breeders' Cup World Thoroughbred Championships. WILL JULY RETURN?
Another big question in 2004 concerns the Keeneland July select yearling sale, which was not conducted in 2003 in part because of mare reproductive loss syndrome. When officials pulled the plug on the 2003 July sale, many people assumed it would resume the following year. But Keeneland officials have had a tough time recruiting a suitable number of top-class yearlings to catalogue to the July sale in recent years, in part because of the enormous success of the select days of the same company's September yearling sale.
The freshman sire class of 2004 is an outstanding one at the top, which is headed by Coolmore/Ashford's Fusaichi Pegasus and Giant's Causeway. Yearlings by Lane's End stallion Lemon Drop Kid were well regarded at yearling sales, too. War Chant, standing at Three Chimneys, is the fourth very promising member of this freshman quartet.
Finally, 2004 was the year targeted by the Thoroughbred Owners and Breeders Association to launch the Thoroughbred Championship Tour, a series of televised races that follows the road to the Breeders' Cup for every Breeders' Cup division apart from the two races for juveniles.
Owners were being called on with a private placement offering that would put them in control of the TCT for a cost of $250,000 per owner.
There's no sign how much traction the TOBA's initiative has, but it seems highly unlikely the series will be launched in 2004