NTRA-Magna Joint Statement on Membership Commitment

A joint statement from Magna Entertainment Corp., and the National Thoroughbred Racing Association, announces Magna's decision to rejoin the NTRA with a two-year commitment after the NTRA has committed to changes in how the organization is governed.

Joint Statement of Magna Entertainment Corp. and NTRA
As covered in our previous joint statement, Magna and the NTRA have had recent, constructive discussions on ways to strengthen and improve the industry and its national office. On behalf of Magna, Mr. Stronach has consistently said that he would continue to participate in the NTRA if there was a sufficient commitment by the organization - and constituent groups such as the Breeders' Cup - to the principles of stakeholder election of directors and free enterprise. He also has said consistently that, if those principles were acknowledged and sufficiently supported with concrete steps and actions, then he would be flexible as to the specific details of how these goals were implemented.

Through recent discussions, considerable progress has been made in understanding and clarifying the meaning of "stakeholder election of directors" and "free enterprise" in the current context of organizing a national office for horseracing.

Magna's central idea for NTRA governance is based upon the principal of proportional stakeholder representation. As an example, the Breeders' Cup Board would be elected by voters based on the value of foals or stallions nominated. If a person nominates one foal (at a cost of $500), he would be entitled to one vote, for ten foals - ten votes, etc. Similarly, for each stallion which is nominated (at a fee of $5000 - ten times the $500 foal fee), the owner would have ten votes.

With respect to the HBPA, THA and TOC, it should be noted that Magna is reasonably satisfied with the democratic basis used by these horsemen's organizations for electing directors.

On the racetrack side, Magna and the NTRA have agreed that Churchill Downs, NYRA, and Magna should each be represented by one director on the NTRA Board. An additional four directors would be elected by other tracks on a regional (e.g. Mid-Atlantic, if they rejoin the NTRA) or other reasonable basis. In addition, the stakeholder-elected Breeders' Cup Board would elect its representatives to the NTRA Board.

With respect to free enterprise, MEC and the NTRA would make a clear commitment to promoting free enterprise in the racing industry by working to eliminate the red tape and other impediments that stand in the way of the revitalization of the industry. Naturally, it is important that government play a role in the horseracing industry to protect the public and integrity of our sport; however, we need to work toward a true free enterprise model in which our industry can innovate and compete like any other business.

While the NTRA-Magna Entertainment dialogue has been cordial and productive, we do not agree on every issue and specific proposal. However, both organizations share basic policy goals in these areas and in various other areas of potential benefit to horseracing. Both organizations believe that these goals can best be achieved with as much industry participation and unity as possible. Both organizations have compromised in the interests of making progress.

The NTRA, subject to Board approval and further definition of certain details, has committed to governance changes that will entail greater reliance on the principles of proportional stakeholder
representation in the makeup of its Board. In the same spirit, some constituent groups of the NTRA - including the Breeders' Cup - will review their own governance procedures from the standpoint of assuring stakeholder representation and make clarifications, updates or revisions as appropriate.

For example, the Breeders' Cup Executive Committee, at a special meeting conducted by telephone on January 10, unanimously passed a resolution authorizing the corporation's officers to proceed with
development of a proportional voting system for its Board along the lines outlined above. This initial step will result in the majority of the Breeders' Cup Board being elected with votes cast on a proportional
stakeholder basis.

Also, the NTRA has committed to an aggressive plan in 2001, and beyond, to pursue the economic deregulation recommendations of the McNair Task Force, which concluded that current levels of regulation and taxation of horseracing are unwarranted and unjustified. Magna and the NTRA have
agreed that implementation of these recommendations should be a major priority for both organizations.

Also, the NTRA will revise its 2001 ESPN and ESPN2 television schedule (February - April) to include a full complement of races of Magna racetracks during this important, pre-Triple Crown period and throughout the year. Further details will be released in the next few days, but extensive coverage still can be provided and we strongly agree that the interests of our customers and fans are of paramount importance in this regard.

Based on these commitments by the NTRA and Breeders' Cup, and on the shared commitment to improving the industry and particularly live racing, Magna has agreed to commit its racetracks to continued membership and participation in the NTRA for 2001 and 2002. We also have agreed that the commitment may be withdrawn at the end of 2001, in the unlikely event that sufficient progress on the commitments made by the NTRA and Breeders' Cup Board to elect directors and pursue free enterprise has not been achieved.

Also at the request of the NTRA, Frank Stronach will agree to join a newly-constituted NTRA Board of Directors, assuming it is formed along the stakeholder-based principle that has been discussed and clarified.

From the NTRA/Breeders' Cup standpoint, Tim Smith and D. G. Van Clief wish to express their appreciation to Messrs. Stronach, McAlpine and others representing Magna for their constructive approach to these issues.

We look forward to a period of renewed industry unity and good faith pursuit of the important goals that we share.

We hope that similar agreements can be reached with as many other racetracks and former NTRA members as possible. Although the Magna-NTRA agreement does not affect the other groups that previously announced their withdrawal from NTRA membership, including the Mid-Atlantic racetrack group,
discussions with those groups are ongoing and we both will make good faith efforts to bring them to a successful conclusion.

With respect to the Mid-Atlantic tracks, it should be noted that Magna sympathizes with their position and wants it understood that the NTRA should not compete with its stakeholders in the business of racing or
significant related businesses.

As previously clarified, the recently approved NTRA-Breeders' Cup joint operating budget for 2001 projects no revenue from any of the withdrawing tracks, including Magna and the Mid-Atlantic. Magna's
participation alone, however, would provide incremental funding of over $1 million for various NTRA programs, including co-op advertising, television, consumer promotions, legislative and regulatory initiatives, among others.

We believe this agreement is in the best interests of horseracing and look forward to working together, hopefully for many years to come.