In the “you can’t make this up” department, we have this: at the exact moment when Maryland racing’s future seems the brightest it’s been in years — because of the impending arrival of slots — it’s also distinctly possible that Maryland racing has no future at all.
As has been amply documented seemingly just about everywhere, the financial house of cards that is Magna Entertainment — the owner of the two full-sized flat tracks in Maryland — appears to be collapsing. Magna’s controlling shareholder, MI Development — another Frank Stronach-run company — has pulled the plug on the loans it made to MEC for that company’s reorganization. The board members have begun to leave. Will the last guy out turn off the lights?
The value of the stock of MEC — which also owns racing jewels Gulfstream and Santa Anita, as well as other tracks around the nation — is measured in pennies. And its future may be measured in weeks.
Magna, clearly, will need to shed debt — by shedding assets — if it is to survive. Those assets are primarily racetracks and the land which the tracks occupy. In many cases, the tracks are worth more as houses and shopping malls than they are as racing strips, which means that the future of racing in many parts of the country is very much up in the air.
Here in Maryland, it’s a safe bet that both Pimlico — in Baltimore with ready access to the interstate — and Laurel Park — midway between Baltimore and Washington — are at risk. Both are aging facilities in need of work, and both occupy large and valuable tracts of land. The sour economy may keep them free from developers for now, but for how long?
It’s no secret that many legislators don’t care about horse racing. For all of its distinguished history in the state, and despite all of the economic and other benefits its existence brings, it nevertheless took a decade-and-a-half for slots to arrive here. Many legislators simply don’t get it.
Whether they understand the benefits of racing or not, however, you’d have to be blind and stupid not to see the benefits of hosting the Preakness. One hundred thousand fans fill a lot of Baltimore hotel rooms and plenty of Little Italy and Inner Harbor restaurants. All that money wagered supports a lot of Maryland jobs.
And all of it is at significant risk right now. While legislators generally discounted the possibility of Magna (or any other track owner) moving the Preakness — probably rightly so — it’ll be awfully hard to run the race around the parking lot of a strip mall, or down a tidy new cul-de-sac.
Now may be the time for something different. Track officials often make decisions that leave horsemen scratching their heads; and horsemen often want what’s not financially feasible. That’s because of racing’s odd split governance structure, in which those who own the venues have, often, as much or more power over what happens in the sport as the horsemen who actually put on the show.
Perhaps now’s the time to end the split. A nonprofit consortium of horsemen — owners and trainers — could be formed to own the tracks. The state could facilitate this process by encouraging the creation of the group and by allowing some of the slots money currently earmarked for purses and other awards to be reprogrammed towards paying for the facilities.
Because it would operate as a nonprofit, the consortium would (at least theoretically) be able to up purses, since there would be no profit motive per se. The changes would place the horsemen in charge of their own destiny — rather than at the tender (or not so tender) mercies of Magna Entertainment and its increasingly unhappy creditors. Moreover, they would allow horsemen to run the tracks the way they see fit, rather than battling with Magna or the Racing Commission over dates and closures and many other issues. Our success, or failure, would be entirely our own.
Political processes — and, with a private track owner, horsemen’s groups, jockeys, and a racing commission, all decisions in Maryland racing result from a political process — most often lead to compromise, “least bad” decisions.
But for Maryland racing, “least bad” is no longer good enough. If the horsemen take the reins, the risks are huge. But so are the rewards, and perhaps it’s time to embrace them.