Updated on 09/13/2011 10:07PM

Maryland loses a strong leader

EmailWASHINGTON - It comes as no surprise when Magna Entertainment Corp. - owner of Laurel, Pimlico, and other racetracks - makes a bad decision. The company has lost hundreds of millions of dollars and its stock has plummeted to $1.43 a share.

One of Magna's properties, Gulfstream Park, stands as a monument to questionable judgment. The company's chairman, Frank Stronach, made the decision to raze the grandstand and completely rebuild a facility that most customers loved. For $171 million, he removed all the grass and trees and created a place that angered many longstanding fans. Part of the rationale for the project was to make room for the coming of slot machines. When they arrived, Gulfstream achieved this distinction: Its machines generated less money than almost any comparable facility in the country.

In view of the company's record, Marylanders probably should have been prepared for some incomprehensible act adversely affecting Laurel and Pimlico. Still, most of the racing community was shocked and distraught Tuesday after Magna fired the president of the Maryland Jockey Club, Lou Raffetto Jr.

Raffetto had been regarded as one of the best racetrack managers in the country when he came from Suffolk Downs to Maryland in 2000. Here he enhanced his reputation under the most difficult of circumstances.

Maryland racing is in decline, buffeted by competition from nearby tracks that can offer larger purses bolstered by slot-machine revenue. Among the various segments of the horse industry, relations were poisonous. Horsemen despised the tracks' management. Thoroughbred and harness interests deeply distrusted each other. These internecine rivalries kept the industry as a whole from presenting a united front when it wanted help from the state government.

As he stepped into this hornet's nest, Raffetto encountered plenty of skepticism from people who assumed he would be just a tool of Joe De Francis's management. But most of those skeptics saw that he was not only a smart man who understood the issues; he was fair-minded.

"We went down some bumpy roads," Raffetto said Thursday, "but over time I think the horsemen realized that I looked at things from both sides - I tried to do what was best for Maryland racing, not just what was best for the track."

As financial conditions worsened in recent years, forcing cutbacks in the racing schedule and in purses, Raffetto worked closely with the horsemen.

"We made the tough decisions together," he said.

The improved relationship between trainers and the Maryland Jockey Club may explain, in part, why stables haven't made a mass exodus to Pennsylvania and other states with slot machines. The racing product at Laurel and Pimlico has been as good as it could be under the circumstances. As a former racing secretary, Raffetto knows how to make the best possible use of a track's horse population. Like a good chef who can work wonders with modest ingredients, he did a remarkable job with limited resources.

It is hard to imagine that any company would want to fire such an executive. But Magna is a highly bureaucratic organization, with everybody ultimately answerable to the chairman, Stronach. He makes most of the big decisions in the company (such as the disastrous ones at Gulfstream). People who are not team players - i.e. those who have opinions different from Stronach - have short professional lives, and the turnover in the organization is dizzying. The most recent CEO lasted four months.

In this otherwise tight corporate structure, Maryland had been a little island of independence. When Magna bought a majority interest in Laurel and Pimlico five years ago (overpaying wildly, as usual), Joe De Francis kept a minority interest and stayed on as president; he had hired Raffetto, who ran the day-to-day operations. De Francis and Raffetto didn't telephone vice presidents at Magna headquarters in Canada before they implemented decisions. This fall, when Raffetto decided to lower the takeout drastically for 10 days of racing at Laurel, he didn't ask anybody's permission.

When Magna recently bought out De Francis's interest in the tracks, the Maryland Jockey Club lost its independence. Magna hadn't been able to touch De Francis, but it could touch Raffetto. Within Magna, there probably was a perception that Raffetto's loyalties had been to De Francis, not to Stronach and the organization. If that was the case, Raffetto said, the people at Magna were wrong: "My loyalties were to the Maryland Jockey Club."

On Tuesday morning, Raffetto knew that two Magna vice presidents and a lawyer were going to be at Laurel and he said, "I knew it was coming. I felt like I was getting dressed to go to the firing squad."

What he didn't expect was the outpouring of support he got from all corners of the racing community. For a horseman to speak out on behalf of a member of management was once unheard-of in Maryland racing, but Alan Foreman, attorney for the horsemen's organization, told The Washington Post's John Scheinman that the firing was "the biggest mistake involving Maryland racing since I've been in the industry here."

Brant Latta, Magna's senior vice president, would offer only this explanation: "We needed a change, and a fresh look at things."

Raffetto will be succeeded by Chris Dragone, who previously ran two other Magna tracks, Great Lakes Downs and Portland Meadows. Raffetto will surely get another management job, and it will probably be a better one than running Laurel and Pimlico. In any event, he won't be happy to depart.

"I love Maryland," he said. "I love the people here; I don't want to be any place else."

(c) 2007, The Washington Post