03/08/2002 12:00AM

Looking at what makes Stronach tick

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NEW YORK - Anyone who has been betting on Frank Stronach to go bust and get out of the racing game had better hedge, extend, or cancel his wager. The depth of Stronach's pockets and acquisitive urges was revealed anew this week with his purchase of Lone Star Park.

His newest $100 million addition to the Magna Entertainment portfolio gives him 11 American racetracks, and he's probably not done yet. Deals in Massachusetts and Maryland remain possibilities, and he would go for $300 million or more for New York City OTB in a heartbeat if Mayor Mike Bloomberg were willing to sell.

What makes Stronach's continued buying of particular interest is that he hasn't exactly been hitting home runs with his previous purchases, not that any track operators are these days. Attendance continues to erode while national handle remains flat, and no one's getting rich swapping live business for increased per-capita simulcast dollars.

Magna also has the most disappointing performer of the year, Gulfstream Park, where a horse shortage has led to anemic live racing that is attracting around $1 million a day less in simulcast bets than a year ago. This may not be a one-time aberration. Gulfstream may have permanently lost the loyalty of Eastern simulcast bettors, who discovered this year that Aqueduct and Fair Grounds are perfectly playable alternatives.

So why keep adding to the portfolio at a time when most prudent investors would be standing still? The answer lies in some combination of three factors: a belief in the power of consolidation; a long-term shot at big-market slots; and non-economic personal ambitions that Stronach can afford to support.

The consolidation play, shared by Churchill Downs Inc. with its acquisitions in recent years, aims for both efficiency and synergy. Savings are available by combining management and some overhead through the combined properties. The big idea, though, is that amassing sufficient "product" takes the company into a new arena where it owns enough signals to provide a self-contained electronic network for home television and wagering.

It sounds good in theory but it remains to be seen if Magna can assemble enough product to keep TVG from dominating the in-home market. Things will get interesting next month when Magna's two jewel properties, Santa Anita and Gulfstream, close down and the balance of power switches to TVG signals including Hollywood, Keeneland, and NYRA.

Magna is hoping it can outlast TVG, which won't be around forever if people don't start wagering a lot more through it. Business is picking up, but account wagering generally has been a disappointment thus far in California. This will be the crucial year in determining whether TVG survives, and you can expect a full-court marketing press in California once the signal and betting accounts shift from Santa Anita and Magna's ExpressBet to Hollywood and TVG next month.

Adding the Lone Star signal, and possibly some more Eastern-seaboard racing, will keep some ExpressBet customers in action, but the big prize remains New York. Unless the New York Racing Association can devise and fund a comprehensive plan to buy NYC OTB and extend its own franchise, which it has been trying to do for nearly two decades, Magna is the likeliest purchaser for both OTB and NYRA itself in the years ahead.

While slots are not imminent in Magna's current biggest markets, they are only one or two budget crises away. Any consideration of Magna's value and prospects has to include the possibility of getting slots at Florida and California tracks someday. With Indian gaming and poker rooms sprouting all over California and an increasingly receptive climate for expanded gambling in Florida, these are not entirely longshots.

What appears to drive Stronach even harder than economic factors are the personal ones. His messy departure from the Ontario Jockey Club, and his tussles to date with the American racing power structure, have left him with a personal grudge against what he calls "clubbiness" and a special desire to own icons of the racing world. You get the impression that few monthly financial statements could make him as happy as he was a year ago when he picked up four Eclipse Awards.

He had that triumphant look again last weekend at Santa Anita. Stronach spent the day not in the elite Directors' Room but in his $40 million Frontrunner restaurant, where there wasn't a necktie in sight and where, for at least one day, Stronach's vision of racing's entertainment potential looked awfully good. The place was packed with as young and casually hip a demographic as the NTRA could ever desire. Looking around the place, Stronach must have felt as much in his glory as he did a few hours later picking up his own trophy for winning the Big 'Cap with Milwaukee Brew.

Here's hoping someone told him that what attracted 30,000 onlookers and $25 million in national handle that day was not the scene or the menu in the Frontrunner but a truly excellent card of bettable racing with full and competitive fields. Horseplayers can only hope that regardless of what drives Stronach, he keeps the horse before the a la carte.