Magna Entertainment Corp. has announced plans to sell Thistledown near Cleveland, Ohio, and to shed its interest in Portland Meadows, located in Portland, Ore.
In the Sept. 5 announcement, the company said the decision is “consistent with its previously announced strategic review of assets and operations.”
Frank Stronach, MEC's chairman and interim chief executive officer, cited unsuccessful efforts by Magna to get alternative types of gaming approved for both tracks and their lack of profitability for the decision to sell.
"Although MEC remains strongly committed to the racing industry, the fact remains that Thistledown and Portland Meadows are confronted with very difficult operational and regulatory challenges. Furthermore, MEC is very much committed to continuing to sell assets and to strengthening its balance sheet. This has led to MEC's decision to immediately pursue the sale of these unprofitable racetracks," the release said.
Since acquiring Thistledown in November 1999, Magna has been unsuccessful in getting approval for alternative gaming at the track. Magna’s statement noted that the most recent of those efforts, a failed on Nov. 7, 2006, cost the track operating company $3.1 million, constituting a major portion of Thistledown’s pre-tax loss of $4.5 million for the year ending Dec. 31, 2006. MEC began operating Portland Meadows in July 2001 and now also operates14 off-track betting locations in Oregon.
Magna’s announcement reiterated the most recent history of its efforts to allow the installation and operation of Instant Racing machines at Portland Meadows. Although approval was granted under a ruling by the Oregon Racing Commission, that ruling was revoked at the request of the state's attorney general this June.
“MEC was very disappointed with this result and plans to sell its interest in Portland Meadows and related off-track betting locations,” the release said. For the year ended Dec. 31, 2006, Portland Meadows incurred a pre-tax loss of $0.1 million.
“MEC intends to work with the local horsemen groups and regulatory bodies to pursue and execute an orderly sale of these properties,” the company said in the announcement. “MEC expects to provide a further update, within the next two weeks, after the completion of the strategic review by Greenbrook Capital Partners Inc. and its presentation to the board of directors.”