Plenty riding on Magna’s deal to appease creditors

Magna Entertainment Corp. has reached a deal with creditors, to whom it owes hundreds of millions of dollars, to maintain control of its main assets, namely Gulfstream Park, Santa Anita Park, Golden Gate Fields and XpressBet. MEC has sold, or will sell, Remington Park, Lone Star Park, Thistledown, Pimlico and Laurel to raise cash. U.S. bankruptcy court must still sign off on the deal.

MEC is run by Frank Stronach, whose skill in operating a profitable car parts business has not translated into heading a horse racing empire. To call MEC an abject failure would be charitable.

The racing industry has banked its short-term growth on gaining slot machine legislation. MEC, despite having state approval for slots at its tracks in Florida, Maryland and Oklahoma, is no closer to breaking even than NASA is to landing a man on Mars.

Should horse racing be happy that Stronach remains one of its most vital power brokers? That depends. Few have as much passion and determination as Stronach. But his lack of common sense and disconnect with fans and horsemen has led to this financial abyss.

Look at Pennsylvania, where Philadelphia Park and Penn National are working fast to set up money-making on-track slot operations. Gulfstream, Laurel and Pimlico, despite similar opportunities, are spinning their wheels. If not for the debacle of Aqueduct not yet having slots, more attention would be paid to MEC’s slot failures.

If Stronach deserves to be cut some slack, it’s because he is never afraid to think outside of the box. I just wish his new ideas were on target. Remember the Horse Wizard slot machine? Millions of dollars were wasted building a device that was a bad idea from day one.

I’d always thought that MEC had parts that if pieced together properly could work: a betting platform in XpressBet, a tote company in AmTote, a network in HRTV, a signature event and profit center in the Preakness, slots approval in multiple states and some historic, marquee racetracks.

Yet somewhere among wasteful spending, bad ideas and a lack of common sense combined with a poor economy and competition eating away at horse racing’s gambling base, it’s come to this.

But, believe me, we should be rooting for MEC to succeed, because way too much has been invested.

Richard Eng’s horse racing column is published Friday in the Las Vegas Review-Journal. He can be reached at rich_eng@hotmail.com.