07/16/2009 11:00PM

Bidders near the gate in race for Santa Anita


INGLEWOOD, Calif. - The favorite pastime of those with a vested interest in the California version of Thoroughbred racing does not currently appear to be the racing itself. Want evidence? How about this: there are more prospective buyers rumored to be seriously interested in acquiring Santa Anita Park than there are horses entered in the Sunset Handicap on Sunday, closing day of the Hollywood Park meet.

That would be four - horses not suitors - running 1 1/2 miles on the grass for a purse of $125,000, plus $25,000 in Breeders' Cup bonus money for any starters who have satisfied Breeders' Cup eligibility requirements. In this case, Spring House and Black Astor are running for the extra dough while Obrigado and Porfido are not.

It is anyone's guess as to what can happen in a four-horse race at 1 1/2 miles, but that's nothing compared with the speculation surrounding the players circling the field for the bankruptcy auction of Santa Anita. From the backstretch community to rank-and-file wage earners on the frontside, everyone is anxious to know who the new boss might be, and fans should be likewise concerned. Setting aside for a moment the turmoil over racetrack surfaces, Santa Anita has been an island of relative serenity over the past few years in a sea of Magna chaos. New ownership with sensible goals and a feel for the game will be a key component to any substantive recovery of the sport in California.

Everyone has heard the names bouncing around like lotto balls. The Thoroughbred Owners of California, the San Manuel Band of Mission Indians, Stockbridge Investments (owners of the former Bay Meadows and Hollywood Park), a shopping mall company, and my personal favorite, a "Chinese" group, which is like saying they're from Western Europe or Texas. That doesn't really narrow things down.

Even Frank Stronach persists as a supposedly interested party. And why not? Of all the Magna properties, Santa Anita is not only the most valuable in terms of what its sale can contribute toward settling the Magna Entertainment Corp. bankruptcy debts, but it also has been the most successful of its many holdings.

Stronach, however, would most likely step up through Magna International Developments, one of the companies under Stronach's Magna umbrella, which is the holder of a large part of the Magna Entertainment debt. And while there is nothing to stop a creditor from using its debt as currency to outbid other parties, MI Developments is already on record that it is not going to exercise that option unless the auction prices were "at fire sale level," according to a spokesman for Miller Buckfire, the New York firm representing Magna Entertainment in the bankruptcy process.

Among Miller Buckfire's other clients are Reader's Digest, General Growth Properties, and the Weinstein movie company. The spokesman went on to outline significant steps ahead for Santa Anita:

On July 31, definitive proposals are due. These are offers to buy the place, naming a purchase price, with due diligence completed, and committed financing attached and without contingencies. In other words, a clean package. Of the groups who have been sniffing around Santa Anita in the past months, some will submit a proposal, others will not.

On or about Aug. 8, the "stalking horse" bid will be identified and the name filed with the bankruptcy court by Miller Buckfire. The price offered will be public record, and a deposit of 10 percent of the offered price will be collected. This is the presumptive buyer, ready, willing, and able to close the deal if called upon by the bankruptcy court to do so. This also sets the bar on the price in advance of the final auction, which should take place in . . .

Early September, when the actual, "open cry" bidding will be held, most likely in a law office in New York City. But don't think you can just walk in off the street that day and raise your hand. Bidders who have not gone through the stalking horse process will need to prove they have financing, come in with a bid no less than that of the stalking horse bid, and provide a check for 10 percent of the offer.

The "winner" of the first round of bids closing July 31 has the disadvantage of showing its cards first. But there are more hands to follow, and there are certain advantages of coming out on top of that round.

"Your deal will be made available to prospective over bidders, but you do get to negotiate the contract for your own benefit," the Miller Buckfire spokesman said. "Also, the stalking horse gets certain protections, if they end up being outbid. In addition to a refund of the 10 percent deposit, they will be owed a break-up fee and reimbursement of expenses by the winning bidder."

And you thought the World Series of Poker was being played at the Rio Hotel in Vegas.

Based on this timetable, the suspense should be over soon. By the second week in September a winner could be announced. After that, the successful bidder would need to go through fairly routine licensing procedures. In the case of running a racetrack, this includes approval by the California Horse Racing Board as well as the California Department of Alcoholic Beverage Control. ABC is usually as simple as that while the racing board figures to be overwhelmingly relieved that somebody bought the place at all with horse racing in mind.

"The fact that they'll own the property would be the biggest plus," said CHRB chairman John Harris. "We'll want to take a look at things like financial stability, and there will have to be background checks on the officers to make sure no clouds hang over the management team. Essentially, though, I think we'll be pretty user friendly as far as getting someone in place there so as not to disrupt racing."

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