Raffetto, Part 2

In an earlier post, I reported on the “resignation” of Lou Raffetto as president and COO of the Maryland Jockey Club (MJC).

Did I say resignation? Sorry. I meant firing.

In a different earlier post, I gave thanks for Magna, which, I said, had worked hard to improve Maryland racing.

Did I give thanks? Sorry. I meant that I wanted to beat Magna’s senior management with a wet noodle. (I once had a teacher who used that threat… what on earth does it mean?)

The word now is that Magna threw Raffetto overboard because, according to Frank Stronach, King of all things Magna, the financial performance of the Maryland tracks had been unacceptable. Yet, according to a John Scheinman article (here), the MJC is actually doing better than company projections; all-source handle was up about seven percent in 2006 over 2005, and earnings in ’07 to date are $1 million ahead of schedule. All of this, moreover, for a company, Magna, which appears to be aiming to corner the market on red ink. So the “financial performance” line appears to be, shall we say, a bit dubious.

Of course, it’s Stronach’s company; and it’s his prerogative to have his management team in place. He said as much, noting that his company had paid for the tracks and now wanted to change a few things.

Unfortunately, what he’s done is to fire a well-respected executive who was responsible for any number of positive changes at the Maryland tracks and on the Maryland racing scene (read the usually curmudgeonly Andy Beyer’s column on Raffetto here). He’s made a change which most Free State horsemen find incomprehensible, and in so doing he’s alienating a lot of important people. In fact, John Franzone, chairman of the state Racing Commission, has suggested that this action jeopardizes Magna’s chances to get a license to operate slot machines at Laurel, if voters approve them next fall.

Running a racetrack well is a delicate business, with many constituencies to please. Shareholders, horsemen, fans, state regulators and legislators, breeders, and others all have a stake in the outcomes of racetrack decisions — and all have strong opinions of their own. Running a track well when all of its nearby competitors have additional revenue-generating tools is even more of a challenge.

It requires a sound business plan, dedication, commitment, patience.

And Magna? Its history is one of quicksilver changes, frequent “new directions,” impatience, unwillingness to learn, and a revolving door in the senior executive suite. Which, unfortunately, is still revolving.