03/15/2006 12:00AM

Magna seeking new chief executive

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Frank Stronach, the founder of Magna Entertainment Corp., the country's largest racetrack operator, will head the company on an interim basis while it searches for a new chief executive, Magna announced on Wednesday.

Thomas Hodgson, Magna's current chief executive, will step down at the end of March, Magna officials said. Stronach also headed Magna on an interim basis in 2000 and 2001.

Hodgson, Magna's fifth chief executive in the nine-year history of the company, joined Magna in March 2005 and was asked to pare the company's debt by selling off properties and to improve cash flow. During Hodgson's brief tenure, Magna sold Flamboro Downs, a racetrack and slot-machine casino in Canada, for $66.1 million; a 157-acre parcel of land in Florida for $51 million; and the company's Meadows racetrack in Pennsylvania for $225 million. The Meadows deal is contingent on the track being licensed by Pennsylvania as a slot-machine facility.

Dennis Mills, Magna's vice chairman, said Wednesday that Magna will be searching both within the company and outside it for an executive with racing, gambling, and technology experience. Mills named two Magna executives as candidates - Ron Charles, the president of Santa Anita Park in California, and Joe De Francis, the chief executive of the Maryland Jockey Club and Magna's technology subsidiary, PariMax.

"It would be inappropriate for me to handicap, say, what the board will do, but my point is that the board committee that will be determining and organizing this effort is not going to exclude anyone," Mills said.

Magna has struggled to turn a profit, losing $320 million over the last three years and $106.3 million in 2005. Since the deal to sell The Meadows has not closed, it did not affect the 2005 figures. The company has $306 million in long-term debt.

De Francis said on Wednesday that he had not considered becoming Magna's chief executive.

"I've got enough to do as chief executive at PariMax and as chief executive of the Maryland Jockey Club," De Francis said.

Charles declined to comment on any speculation about the new chief executive.

Also on Wednesday, Magna said it had reached an agreement with Ladbrokes, the largest bookmaking company in the United Kingdom, to distribute signals from its new racing channel, Racing World, into Ladbrokes shops. Racing World, a partnership with Churchill Downs Inc. and Racing UK, a racetrack association, was launched last week for subscribers of horse racing signals on the British satellite service SkyTV, De Francis said.

Current laws in the U.K. prohibit bookmakers from staying open past 6 p.m., when U.S. racetracks are just getting started. But De Francis said the laws will likely be changed to extend operating hours to 11 p.m. or midnight, which would open up the market to the North American signals provided by Racing World.