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Horsemen await Magna’s future

Posted: Thursday, March 05, 2009 7:08 PM

by Jeff Lowe

Horsemen representatives in California, Florida, and Maryland do not expect Magna Entertainment Corp.’s bankruptcy filing to have an adverse effect in the short-term.

The long-term impact is harder to gauge, said Kent Stirling, executive director of the Florida Horsemen’s Benevolent and Protective Association.

“I was a little surprised at the way it was done,” said Stirling, who represents horsemen at Magna’s Gulfstream Park. “I’m told that Gulfstream will continue to operate the way it is, that racing won’t stop. Since right now, Gulfstream’s probably the Magna property that’s doing the best, I’m a little surprised that it was put on the block [for sale].

“All I know is that our horsemen’s money is safe because we have a separate corporation in charge of it that has no ties at all to Magna.”

The Thoroughbred Owners of California took preemptive action earlier this week by taking over management of paymaster accounts for horsemen at Magna's Santa Anita Park.

“We suspected this was coming, and we thought it was better for horsemen for those monies to be in our hands,” TOC President Drew Couto said. “We’ve got almost $10-million that’s fully protected.”

Couto said he expects Magna’s bankruptcy to be only a footnote in California racing’s long-term future. The company also owns Golden Gate Fields in Northern California.

“Racing out here is going to continue to go on,” Couto said. “People are going to get paid. Bankruptcy is a process where they restructure debt, and that’s what I expect will go on. … It’s really a shame, it’s really a huge inconvenience, but as far as the long-term implications, I don’t think it begins to even suggest that the end of California racing is near. I don’t think it’s a sign that the sky is falling, it’s a sign that things are changing.”

Alan Foreman, general counsel for the Maryland Thoroughbred Horsemen’s Association, said horsemen funds have been separated from Magna’s Maryland Jockey Club as a measure of protection for many years.

Foreman previously represented the New York Thoroughbred Horsemen’s Association when the New York Racing Association went through bankruptcy proceedings from 2006 to ’08.

“I would assume this process will play out fairly quickly by bankruptcy standards, hopefully within six months to a year,” Foreman said. “I haven’t even read the petition yet, and trying to figure out what they’re doing and what they’re strategy is will take some time.”

Jeff Lowe is a THOROUGHBRED TIMES staff writer