Stronach Interview--Part 2

Are you aware that many horse buyers at public auction are contributing to the NTRA one-fourth of 1% of the amount they spend, and the money is being used strictly for lobbying purposes?
I think the American Horse Council has done a great job for the amount of money it has.

Have you contributed to the program when you've bought horses?
I think I will call the American Horse Council and say, 'You guys have done a great job. I'm going to support you and give you some money.'

Are you aware the NTRA has tripled the amount of money spent on lobbying in Washington?
The NTRA has tripled the amount of money given to the American Horse Council?

Yes, it has.
That's good. How much was that roughly?

I believe its budget was roughly $600,000 this year.
That means the Horse Council only had $200,000 to spend. For the small amount they have, the American Horse Council has done a great job.

I know that you met with NTRA commissioner Tim Smith last January and I know he's tried to arrange meetings with you since then. Have you had a chance to sit down with him to discuss the board situation?
I think Tim has to go to the board and ask, 'Where do we stand on the framework and on the election?' I have a very good relationship with him, when we talk. I think he does a good job. But it's the board that creates the business plan and the board that directs.

Have you met with the board?
I met with the board in January in Florida.

Would you meet with them before the end of the year to discuss these issues?
How often can I make myself clear. It's a simple request. Either you believe in free enterprise or not.

Have you gone to the board or to Tim Smith with a specific proposal?
The first thing is, breeders can elect democratic representatives. For example, the Breeders' Cup should elect its board by giving every breeder one vote for every foal they nominate. Owners can elect their representatives. With racetracks, you've got owners, so there's no election there. The framework at this point is flawed. It's got to have some democratic principles in there.

On the regulatory issue, free enterprise, you may know that Bob McNair has spent a lot of his time as chairman, and the NTRA has invested quite a bit of money, in a task force that has drafted a report, now being circulated among NTRA members and expected to be made public next month.
I spent with Bob maybe 20 minutes or a half-hour at Saratoga. We sat on a bench and I expressed the way I see it. I'm aware of the task force. I highly respect Bob.

When the Florida law expires next year, essentially deregulating racing dates, how many days or weeks will you keep Gulfstream Park open for live racing?
I think the customer decides that. The market decides. That's what free enterprise means.

How do you intend to find out what the customer wants?
Well, if the customer wants to be there. If you don't have customers you've got to assess things and say, 'What am I doing wrong?'

You want that same environment in California for Santa Anita.
All the way around, yes. I'm not that naïve. The state's got to have an involvement, laying down the rules, protecting the public, and protecting the integrity of the sport. If you meet all the rules, let the market decide when to be open.

You must think it is in the best interest of racing to have head to head competition.
Look, that's what made America. If the state tells you there's only one shirt factory in one state and only one or two allowed in America, how would that be. That's what made America. I believe it is even unconstitutional, that you could change it in the Supreme Court.

You've trademarked the name NASTRACK, or North American Super Tracks. It sounds like you're trying to develop a circuit or league of your own, and that you don't need the NTRA.
No, we don't need the NTRA. The NTRA I see working in areas where it's for the common good of the industry: legislation, a number of things where everyone will benefit. It's good that there is competition. It's good there is Churchill Downs. I also think it's good there is Magna Entertainment. Maybe another group will develop. I think it's good for the industry.

Speaking of Magna, when you bought Santa Anita you said you wouldn't come in with a chainsaw. Yet, you've gone from the former management at Santa Anita to Rick Cowan to Lonny Powell -- who was your representative on the NTRA board -- and recently Lonny was removed. Same thing at Gulfstream. Doug Donn was replaced, and now his replacement, David Romanik, is gone. Should the racing industry be worried about instability in the management of your tracks?
It's up to Lonny if he wants to stay on the NTRA board. Keep in mind one of my strengths has always been to have practically no change in people. At Magna (auto parts), we hardly have turnover, not in the lower end and none up there (in management). Take my farm here. My manager, Dan Hall, has been there for a long time, maybe 18 years, when he was yearling manager. Same with my Florida farm and my farm trainer.

But this company is less than a year old, right? When we first had Santa Anita it was different than it is now. When we bought Golden Gate and then Bay Meadows, we grew. Fortunately, Jack Liebau came along with that package at Bay Meadows. Jack has my full confidence. Jack runs California. Whatever Jack decides, he has my confidence. We might have a strategy session, but then he does all the day-to-day, and that's the way it is.

We're new. Finally, I took the VP of Magna International's human resources, Don Amos, who is the chief operating officer now. The man owns some horses, he bred some horses. He's been involved and is a known quantity to me and I know he will do a good job. Amos has been with me for 20 years. Graham Orr, Magna's VP of finances, has been with me for 16 or 17 years. It's a new company and there will be more changes.

I understand David Mitchell, Magna Entertainment's chief financial officer, also is leaving.
We think very highly of David, OK? When we hired David the company was smaller. It's larger now. And you need different people for a small company than you need for a large company.

When you hired David Mitchell, didn't you think your company would grow?
Yes, I thought it would grow and in a growing company there's a lot of room. We think very highly of David. But the senior guys might lay down what are the responsibilities of various people.

You mentioned NTRA Productions, which bought Winner Communications and has guaranteed television time on ESPN. It looks like the only way to get on ESPN is through the NTRA. If you are not an NTRA member, should the NTRA sell you time on ESPN for Triple Crown prep races at Gulfstream or Santa Anita?
I don't worry about that. In due course we will create some excitement that they will come to us and say, 'Can we transmit your sporting activities?'

In the short term are you concerned about your biggest races not being on television?
It's got nothing to do with us. The Triple Crown races are on, and you don't have to pay somebody to show it.

But your tracks only have Triple Crown prep races, and networks do not pay to put those races on television. Traditionally tracks pay to get on, and now NTRA owns a specific amount of time on ESPN.
Maybe. But we have to be innovative and create an exciting product. And we will be in due course.

Do you yourself intend to try and meet face to face with anyone from the NTRA prior to the end of the year?
I don't think Magna dropping out will kill the NTRA or kill racing. In racing you have a renaissance now. Since I came in there is movement, which is good.

Continued. . . .