Ray Paulick<br>Editor in Chief

Ray Paulick
Editor in Chief

Magna's Mandate

With the end of the year approaching, one of the critical issues facing this industry will be the prospect for strength and unity within the National Thoroughbred Racing Association, which officially opened for business on April 1, 1998. It hasn't been a smooth ride every step of the way, but, considering racing's largely dysfunctional family and its tradition of circular firing squads, the mere survival of the NTRA after 30 months is no small miracle.

The Mid-Atlantic tracks, through an advisory committee headed by Joe De Francis of the Maryland Jockey Club, fired the first volley on the subject of NTRA membership unity. A report issued by the committee said the NTRA risks losing "a meaningful percentage of its membership" if it takes certain actions. This is a bit of a déjà vu, since the Mid-Atlantic tracks threatened to leap off the bandwagon in unison last year. The loss of some tracks in the Mid-Atlantic seems inevitable, but let's hope the more sensible leaders in the region don't turn into mindless lemmings.

Not weighing in publicly yet on his possible commitment to the NTRA is Frank Stronach, whose Magna Entertainment controls two key winter racing sites, Gulfstream Park and Santa Anita Park; the majority of racing dates in the Northern California circuit of Golden Gate Fields and Bay Meadows; Remington Park in Oklahoma; Thistledown in Ohio; and Great Lakes Downs in Michigan.

Stronach is a smart businessman, one who built a multi-billion-dollar business from the ground up. He is an entrepreneur who understands the benefits of going it alone just as much as he can see the opportunities presented by coalitions. It says here the Austrian native is too smart to drop out of the NTRA.

Late last year, Stronach threatened to pull his tracks out of the NTRA, even holding an ill-timed press conference on Breeders' Cup day to make his point. In late December, Stronach made public a letter he mailed to Tim Smith, the NTRA commissioner and CEO, in which he outlined his principal concerns with the organization and the conditions on which he would retain the membership of his tracks.

Those conditions included: 1) a clearly defined mandate that the NTRA implement a national marketing program and participate in legislative and regulatory matters; 2) the NTRA board be more democratically elected; and 3) the NTRA should pursue and promote a free enterprise environment with less regulation from government.

He made his point. Over the last 12 months, the NTRA has enhanced its marketing programs successfully. It is expanding its board of directors and shedding its self-perpetuating structure. Board members will be elected by the constituent groups they represent. Finally, the NTRA formed a task force on regulation and was able to get Robert McNair to head it up. McNair, a prominent owner and breeder, was a leader in the movement to deregulate the electric utilities industry.

From a purely economic standpoint, it's hard to fathom why Stronach would even consider pulling out. Let's say, for example, Magna tracks paid $1 million in combined dues. If the tracks took full advantage of the NTRA's co-op advertising program, they would recoup up to $750,000 in direct benefits. Also, the NTRA probably spent more than $1 million (and that's a conservative estimate) to put races run at Magna's tracks on television, from the NTRA Champions on FOX series to Triple Crown and Breeders' Cup preps on ESPN and ESPN2. Getting the same kind of valuable television exposure will be virtually impossible without the assistance of NTRA Productions, which has a long-term agreement with ESPN.

It's easy to see that the racing industry as a whole will be better off if Stronach decides to keep his tracks in the NTRA. But it should be just as obvious that the benefits work both ways.