THE STRONACH GROUP HAS THE WINNING HAND

After Santa Anita Park experienced 22 horse fatalities in early 2019, the track’s owner, The Stronach Group (TSG), temporarily closed the track and announced reforms, including the phasing out of the race-day medication Lasix. Since then, some owners and trainers have pushed back by indicating they may move their stables to other states. The North American Association of Racetrack Veterinarians has also voiced disagreement with Santa Anita’s decision on Lasix.

Regardless of one’s personal views on this dispute, an objective assessment leads to the conclusion that TSG is in an almost insurmountable power position vis-à-vis owners and trainers because of the superior business alternative it has to horse racing: real-estate development.

TSG’s website lists its five business segments and one of them is real-estate development: “TSG’s real estate development team is expanding our footprint and revitalizing our properties across North America, focusing on developing the lands surrounding our race tracks to create live, work and play communities.”

At least four of TSG’s seven racetracks are located on prime land that could easily be further developed for commercial purposes: Gulfstream Park (near Miami), Golden Gates Fields (San Francisco), Laurel Park (outside Washington DC in Maryland), and Santa Anita Park (Los Angeles).

TSG would likely be better off from a strictly financial point of view if they were to develop the land on which the four racetracks stand as opposed to continuing to operate racetracks. Gulfstream Park, for example, is already part of an upscale shopping facility and casino.

While TSG is deeply involved in horse racing and breeding, the commitment may not be as strong with current president Belinda Stronach in charge as it was with TSG’s founder, Frank Stronach. Forbes magazine’s special issue on “World’s Billionaires 2019” identified Frank Stronach as a “notable former billionaire” with a net worth of “at least $200 million” and wrote:

“In October, Stronach sued his daughter, Belinda, claiming she has mismanaged the clan’s Ontario-based Stronach Group, of which she is president. (The suit revealed that Stronach had earlier given up most of the conglomerate when he put it into trusts in which he had no interest.)”

Copyright © 2019 Horse Racing Business

Comments

  1. What you say is underway. TSG announced today that it intends to close Portland Meadows and develop the land.

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