Action Tabled on Colonial Management Buyout
Updated: Wednesday, September 7, 2005 10:00 PM
Posted: Wednesday, September 7, 2005 10:00 PM
Members of the Virginia Racing Commission want more time and expertise to review the effects the $10 million purchase of the Maryland-Virginia Racing Circuit by Colonial Downs, LP, may have.
The agreement that was announced on Aug. 18 is subject to commission approval. Colonial's acquisition of the entity that manages its Thoroughbred and Standardbred meets and off-track betting network would result in the reassignment of the duties of its sole employee, John Mooney, who is the president of the circuit.
The commission deferred a decision of the purchase at their Sept. 7 meeting and scheduled a Sept. 28 meeting, allowing time to search for a non-partial third party industry expert to review what effects the new structure may have on racing dates in Maryland and Virginia. A review of Colonial's proposed management structure is also sought. The agreement terminates if it has not been executed by Oct. 31.
Colonial Downs' officials have already begun a nationwide search for a racing secretary whose duties would include the recruitment of horses for their 2006 Thoroughbred meet. Current managers of Colonial Downs would absorb Mooney's other duties, such as track operations and off-track management. Other functions such as marketing and track maintenance would become the responsibility of new hires.
The legal counsel of Colonial Downs, Jim Weinberg, told the commission that the acquisition would not be a detriment to racing in Virginia, a requirement under Virginia law.
In his presentation Weinberg explained that approval would streamline the management structure of Colonial Downs. He said it would create clear accountability for results and eliminate the dual management of Colonial Downs with its apparent conflicts of interest. The management structure that was established in late 90's would also be re-evaluated and create a long-term financial investment by eliminating an annual management fee that is estimated to be $1.5 million in 2005.
There are several components of the existing management agreement that would survive the buyout. Commissioner Peter Burnett, noting that Laurel was opening its turf course on Wednesday, was concerned about the effect of racing dates in Maryland and Virginia. Under the agreement, Maryland would be dark when Colonial is racing from June 17 to July 31, potentially creating an overlap of racing dates in August. The racing calendars could be altered by mutual agreement between Colonial Downs and Magna Entertainment, who owns Laurel and Pimlico in Maryland.
"The strength and the beauty of the circuit is that it is rational. It works to the benefit of both tracks," explained Weinberg in reference to the Maryland tracks and Colonial Downs.
Charlie Dunavant, president of the Virginia Harness Horsemen's Association, voiced concern over a change in management occurring close to the opening of a Standardbred meet at Colonial Downs on Sept. 16. With the unlikelihood that a change in the general manager would occur during the meet that ends on Nov. 14, Mooney would remain the general manager of Colonial Downs through the harness meet after the Oct. 31 deadline.
Mooney, who was not in attendance at the meeting, became president of the Maryland-Virginia racing circuit in 1999. The circuit was deemed significant when the unlimited license was awarded to Stansley Racing Corporation in 1994, assuring the availability of adequate labor and horses to conduct racing at the New Kent racetrack.
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