09/04/2007 11:00PM

Magna puts two racetracks on the block


Magna Entertainment Corp. will attempt to find buyers for its Thistledown racetrack near Cleveland and its interest in Portland Meadows and the track's offtrack betting parlors in Oregon, the company announced late on Wednesday.

A release from the company said that Magna had decided to sell the racetracks and OTBs because both had incurred ongoing losses. Magna, the largest racetrack operator in the U.S., has lost more than $325 million over the past three years and is carrying $500 million in debt on its balance sheet.

A release from the company did not make clear whether the racetracks would be closed if a buyer could not be found. Magna officials could not immediately be reached for comment.

In August, Magna announced that it had hired Thomas Hodgson, a former chief executive of the company, to evaluate the company's assets in order to improve its balance sheet. Hodgson said at the time that there were "no sacred cows" among Magna's properties.

According to the company, Thistledown had a pre-tax loss of $4.5 million in 2006, although $3.1 million of that loss was related to Magna's lobbying efforts to get voters to approve slot machines at the state's tracks in a November 2006 referendum. The referendum was soundly defeated.

Last month, Magna announced that it intended to ask for 91 racing dates in 2008 at Thistledown, down from 187 in 2005 and 156 in 2006. Under Ohio law, Thistledown cannot run fewer than 155 live racing days without a broad agreement among all the racing interests in the state.

Portland Meadows had a pre-tax loss of $100,000 in 2006, Magna said. Last year, the Oregon Racing Commission ruled that Magna could install a type of racing-related slot machine at the track and its offtrack betting parlors, but the attorney general later reversed the ruling.

In a release, Frank Stronach, Magna's founder and interim chief executive officer, said that "Thistledown and Portland Meadows are confronted with very difficult operational and regulatory challenges."