Churchill Failed in Attempt to Buy Laurel, Pimlico
Updated: Friday, February 22, 2002 10:06 AM
Posted: Friday, February 22, 2002 10:06 AM
Maryland Jockey Club president/CEO Joe De Francis.
Churchill Downs Inc. recently tried to buy Maryland's major thoroughbred tracks but failed because Joe De Francis, president and CEO of the Maryland Jockey Club, insisted on retaining management control, The Baltimore Sun
De Francis confirmed that "several substantial entities" have recently shown interest in buying all or part of Pimlico and Laurel Park. In a prepared statement he said: "While we are honored that such expressions of interest have been made, no transactions have occurred which would change the present ownership structure of the Maryland Jockey Club."
De Francis confirmed that Churchill Downs was one of the potential buyers.
"We have had discussions with Churchill Downs," he said. "Those discussions have not resulted in any transaction and are not ongoing."
De Francis declined to identity other entities that had shown interest in buying the tracks. He also declined to comment upon the possibility of ongoing discussions with an entity other than Churchill Downs.
Sources within the Maryland racing industry said that De Francis is trying to find someone to buy out his minority partners, LUK-Flats LLC, a subsidiary of Leucadia National Corp., a New York investment firm. Leucadia bought slightly less than half of Pimlico and Laurel Park in 1998. But relations between it and De Francis have soured.
The sources said that De Francis is not interested in selling his majority stake in the tracks. That has become the deterrent to a sale; no established racing entity wants to invest millions in Maryland's aged tracks and let De Francis continue to manage them, the sources said.
reported that talks between De Francis and Churchill president Thomas H. Meeker occurred periodically over the years but intensified in December, only to falter, resume and falter again in recent weeks over the issue of control.
Karl F. Schmitt Jr., Churchill's senior vice president of communications, declined to comment on his company's interest in the Maryland's tracks. He read the same statement he reads whenever asked about company expansion.
"We have said we are aggressively looking for acquisitions and other business arrangements in the thoroughbred industry that fit into our strategic plan," Schmitt said. "Beyond that, our policy is not to comment on potential acquisitions unless we reach a point of substantial completion."
Frank Stronach's Magna Entertainment Corp. has also made inquiries into buying Pimlico and Laurel Park, sources said. Stronach could not be reached for comment, but he has said publicly in the past that he would be interested in buying the tracks.
Lou Ulman, president of the Maryland Racing Commission, said that he has heard rumors of offers being made for the tracks.
"Some new blood could be helpful," he said. But he quickly added that he could not say a new owner would be good for Maryland racing until he knew the owner's strategic vision, such as its commitment to year-round racing and track improvements.
Maryland racing is at a low point, mired in conflict among its factions and a shortage of resources. It lost its $10 million purse supplement from the state last year because of public bickering and lack of a plan for helping itself. Even though tracks in neighboring Delaware and West Virginia prosper because of slot machines, Maryland's governor Parris N. Glendening has refused to consider slots for his state. His term expires at the end of this year.
Ellen Moyer, a member of the Maryland Racing Commission, said that Churchill Downs' interest in Pimlico and Laurel Park was a positive for the state.
"Churchill Downs is one of the top and very respected racing syndicates," Moyer told The Sun
. "I think they understand the marketing. They understand the things that need to happen to rekindle pride. They understand you can't have major races and major things happening and have your infrastructure breaking down."
Karin De Francis, Joe's sister and part owner of Pimlico and Laurel Park, issued a statement reaffirming their commitment to retaining the tracks. They inherited the operation when their father, Frank De Francis, died in 1989.
"My dad used to get inquiries all the time about whether the tracks were for sale," Karin De Francis said. "He used to say everything he had in life was for sale except his family and his good name. But my brother and I both are committed to the Maryland Jockey Club and Maryland racing and to doing everything possible to make sure that both the company and the industry remain successful."
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