MAGNA makes a quick buck

[karlskorner]

Portions from the Baltimore Sun 11/20

Up in Pennsyllvania Magna Enterainment Corp - part owner of Maryland's Pimlco and Laurel racetracks - just made a killing on slots. How's that ? Remember that slots have been approved in Pennsylvania but the parlors won't open until next year. Nevertheless, Magna's lucrative deal went down like this:

In 2001, it acquired a western Pennsylvina harness race track for $55M

Last year, that track, called The Meadows, became one of six Pennsylvania tracks virtually guranteed a state license to eventually operate as many as 5,500 machines

Last week, Magna sold The Meadows to two Las Vegas executives and an investment firm for $225 million, contingent on slots coming there.

That's something like $172 million in profit for Magna long before anyone drops any money into any slot machines at The Meadows. And here's the kicker: The State of Pennsylvania is charging slots licensess only $50 million for their franchises - which in the case of this harness track, the free market just valued as many more times that. END

Frank Stronach knows how to " make money " and keep his stockholders happy.

[the little guy]

That post wins " The Dick Cheney Award " for distortion of reality.

We all understand his agenda.


We don't care what your's is.

[cj]

Frank Stronach knows how to " make money " and keep his stockholders happy.

You should consider standup!

[karlskorner]

At my age I am lucky to be able to stand up. You should live so long.

[midnight]

karl: you should use some of that snake oil some of the "new" people who drive through this forum sell. I hear it does wonders.

[cj]

At my age I am lucky to be able to stand up. You should live so long.

Statistics say that I will live longer :)

[PaceAdvantage]

Why would Frank sell The Meadows BEFORE the slots arrive? Does he not believe in the long run viability of slots at the racetrack? If not, how does that bode well for all the other tracks he owns?

Is he like a daytrader, flipping tracks instead of stocks? What happened to all the glorious improvements he was going to make to the sport of racing, and specifically, to the tracks he was supposedly going to own for the long run?

This is a curious development...but something to cheer about? No, it only raises more questions for me....

[karlskorner]

STATISTICS.......Don't we all enjoy that word, lots of people on this forum and elsewhere, live and die from an overdose of statistics. My best wishes to you for a long life.

[saratoga guy]

The piece excerpted above is from a Baltimore Sun editorial. The gist of the piece was actually in the two closing paragraphs:

Back in Maryland, ask whether Magna would do the same thing here, grab a low-priced slots license from the state as an entitlement to save racing and then quickly flip it - fleeing right away with perhaps hundreds of millions of dollars.

Marylanders should pay close attention to Pennsylvania's rush to slots, beset from the start with questionable, if not corrupt, deals. They also should ask whether Magna wants a slots license or two to save horse racing or to flip them for a quick buck.

http://www.baltimoresun.com/news/opinion/bal-ed.slots20nov20,1,3971404.story?coll=bal-opinion-headlines

[karlskorner]

$172 million in 4 years aint't a bad profit. Like I have always said, when you are ahead, leave. I don't think Mr. Stronach believes that "slots" will put racing back together again. I know for a fact that he has concern over our local Seminole Hard Rock casino and in no way will "slots" at Gulfstream Park be able to compete. Therefore he is taking Gulfstream Park in another direction. You don't become a Billionaire by following the crowd.

[karlskorner]

I guess I should have added those last 2 paragraphs, but felt they were directed to the locals. Should Laurel and Pimlico get "slots" will Stronach dump them ? I think so, takes his profit and moves on. He has a different vision for racing and "slots" is not the answer. Not this years meet, due to the hurricanes, but take a vacation to Gulfstream in 2007 and see what the man is doing for racing.

[midnight]

Stronach knows about the law of diminishing returns, too. If all the tracks in the same general geographical area get slots, then the advantage for each is diminished. There's only so much gambling revenue to go around. Eventually, most of the tracks will have slots, and then a slot player who lives a little closer to one track than another may go to the closer track.

[CryingForTheHorses]

Why would Frank sell The Meadows BEFORE the slots arrive? Does he not believe in the long run viability of slots at the racetrack? If not, how does that bode well for all the other tracks he owns?

Is he like a daytrader, flipping tracks instead of stocks? What happened to all the glorious improvements he was going to make to the sport of racing, and specifically, to the tracks he was supposedly going to own for the long run?

This is a curious development...but something to cheer about? No, it only raises more questions for me....


Geeze PA you cant give a guy a break!! The guy makes "Big" money for selling and you smell a rat!

[CryingForTheHorses]

Stronach knows about the law of diminishing returns, too. If all the tracks in the same general geographical area get slots, then the advantage for each is diminished. There's only so much gambling revenue to go around. Eventually, most of the tracks will have slots, and then a slot player who lives a little closer to one track than another may go to the closer track.

South Florida may one day be bigger then Vegas

[PaceAdvantage]

Geeze PA you cant give a guy a break!! The guy makes "Big" money for selling and you smell a rat!

Come on McSchell, I thought my reply was thoughtful and honest. In no way did I pass judgement on the fact that he was able to turn a nice profit. Bravo to him. That wasn't my concern though....

[kenwoodallpromos]

By comparison, how is Frank any different than anyone who raves about a house they are buying and the long run viability, then going out and flipping it when the property or neighborhood improves? Maybe just in the public talk.
I do not know if Vegas types getting more into racing is good overall or not- I just know I do not pay parking or entrance fees in Vegas to bet the ponies!
Fine by me if Stronach gets back more into stopping his auto business from sliding and less into racing.