12/23/2004 12:00AM

Q & A: Ron Charles


Ron Charles surprised many people when he accepted a position in late October as the executive director of Magna's California tracks.

Charles, 57, had resigned as chairman of the Thoroughbred Owners of California in late September, ending an 11-year involvement in a leadership capacity with the organization. At the time, he said he wanted to pursue other opportunities.

If Charles was looking for a challenge, he found one at the helm of Magna's California tracks. In California, Magna owns Golden Gate Fields and Santa Anita racetracks. It also owns and operates the Xpressbet account-wagering platform and Horse Racing TV, which telecasts races from the company's two California tracks and many others nationwide.

HRTV has struggled to gain a toehold on cable and satellite television, and Magna's California racetracks have been plagued in recent years by management turnover and the failure to follow through with elaborate plans for redeveloping Santa Anita.

Charles, who owns a small racing stable, is a California-bred. Born in Glendale, he has been a racehorse owner since 1979. A resident of Shadow Hills, Charles owns a construction company that develops residential projects in the San Fernando Valley and a medical placement business that hires personnel for hospitals.

Charles took the time recently to discuss the challenges that face California racing with Daily Racing Form's Steve Andersen.

DRF: The California industry's plan to get slot machines was soundly defeated by voters in November. What will change in Magna's plan next year to gets slots passed?

Ron Charles: Right now, what we've been able to do is establish the best relationship our industry has ever had with the [Native American] tribes, and that's numerous tribes. There are meetings taking place this week - and next week. I continue to be optimistic that these talks will be productive, and potentially there is some type of arrangement with the tribes.

How would racing benefit from those arrangements?

Dramatically. I think what we're looking at is a large escalation in purses. I'd be speculating, but maybe something between 50 and 100 percent.

Is there a timeframe on when those benefits could occur?

The answer is how productive these talks are. The tribes are very open and we continue to change the approach we've had with the tribes for the last 15 or 20 years. We're trying to partner with them now and work together. It can be nothing but beneficial for racing.

What was the problem in not working with them previously?

At one point, racing was the powerhouse in Sacramento. Slowly, the tribes took over that gaming power from racing. Right now, there is no question as to who has been more effective in getting their message across and achieving what they need in Sacramento.

Assuming Magna is still considering building a racetrack in Dixon in northern California, what is the rationale for building a $100 million track far from a population center?

I think we're still looking at that. A final decision has not been made. The uncertainty of what is going to happen at Bay Meadows is being weighed as a factor. As of right now, we're looking into it and seeing how feasible it is.

California suffers from small fields. What can Magna do to improve the situation?

I'm not sure Magna by itself can do anything. I think the entire industry needs to focus on that. It's my primary objective working with the California Marketing Committee. It's a number one priority for me. The inventory being so low, our product has deteriorated. If you ask any racing fan, nothing is more important than having larger fields on which they can wager.

As far as what Magna can do, we are working with the California Marketing Committee on a horse recruitment program. We have approached two of the most prominent trainers back East and they are open and receptive to potentially bringing part of a stable out here. It's something we haven't been very good at in the past. We'll try to sell the attractiveness of racing in California.

What are the chances Magna's California tracks will come to an agreement with the other account-wagering companies?

That has been one of the most frustrating things in the short time I've been at Magna. I can tell you that Magna has truly tried in every possible way to find, or to try to work with, TVG to find a solution for this problem. Up until now we haven't been able to do it, but I think there will be ongoing talks. Again, I'm an optimist and I think those talks will eventually be productive. It just makes sense for us as an industry for us to work together.

Could anything happen in 2005?

It's not impossible.

At the recent Symposium, Magna officials said they have been told to cooperate with other parts of the racing industry. How will this new philosophy play out in California?

I think it already is. One of the areas that was most important to me when I joined Magna was that we need to change the image of Magna. There is no question we need to be more man-friendly and industry-friendly. I think if you ask people that were in Tucson, that came across, and not only in Jim McAlpine's speech.

Magna has a new executive committee, chaired by Dennis Mills. I can tell you that Dennis Mills is a name that will be a very positive influence in this industry. With Dennis chairing that committee and him being someone who wants to work with this industry, I think you'll see Magna in a complete new direction.

Why did you choose to take a position in racetrack management at such a tumultuous time in California racing?

There were actually a couple of offers. I did it because I love racing and am so passionate about racing, especially in California, where I've raced all my life. As I said before, Frank Stronach is a very persuasive man, and the assurance that Magna was going to go in a different direction was a major factor. Combine that with Magna's commitment and Frank Stronach's commitment to racing, which I think is the best in the industry, it's something that personally I really look forward to. Everyone believes they can help, and I truly think I can make a difference.

What are you goals for 2005?

Probably, to get the industry working together, so that Magna isn't out there on its own. I think we're starting to do that. We're looking to have a very successful Santa Anita meeting. We've made some changes at Golden Gate that are very productive. The racing fans and the horsemen are going to see a real difference in the approach by Magna in this industry.

We have made a tremendous investment by going on the Dish network [with HRTV]. Combined with our Comcast distribution, we have improved dramatically our Xpressbet wagering format.

What will change at HRTV for the upcoming Santa Anita meeting?

We're going to give more of an on-air presence to [commentator] Kurt Hoover. We'll have a camera on the roof with Trevor Denman and we'll get his opinion on races and his analysis on what's happened during the races. I think we've got the greatest announcer in the world and we're only using him for 15 minutes a day.

CHRB chairman John Harris recently suggested it's not smart to try to attract horses from out of state with high stakes purses, rather than using the money for overnight and California-bred purses. Do you share this philosophy?

I think it's a fine balance, but basically, no, I wouldn't agree with it. I think it's important to try and draw marquee names. I think that's what generates fans. That's what fans want to see. In addition to large fields, they want to identify with the Smarty Joneses of racing. When I was with the TOC, we would encourage the racetracks to try and attract the marquee-type horses to come out here and run and stimulate interest in racing.

How will you divide your time between Northern and Southern California?

I've spent a lot of my time recently in Northern California because the Golden Gate meeting has been going on. For the last two weeks or so, I've been at Santa Anita and trying to work with everyone. We have a terrific team at Santa Anita.

It will depend on where I think I can do the most good and help and try to make some tweaks that will benefit the industry.

What role will you have in the day-to-day management of Santa Anita?

It will be kind of an overview position, making sure we continue to head in the right direction. Anyone that goes to Santa Anita on the 26th will see the most beautiful Santa Anita they have ever seen. It's truly spectacular, from the landscaping and the additional improvement we've done on the inside.

To answer the original question, I will be involved with issues of any department that wants to ask me my opinion.

It's interesting to hear about the beautification, because Magna has changed its master plan for Santa Anita several times, and not much has been built besides the Frontrunner restaurant and a bar near the paddock. Are there plans to remodel other parts of the facility, including the dilapidated barn area?

There are plans. I think we've run out of time [for this meet], but the plans are there that by racing next year there will definitely be a beginning of new barns. It's a little difficult in working with the city. You can't just go in and do what you want to do. But the plans are there now to begin a slow process of replacing those old barns with brand new state-of-the-art barns that will be an absolute showcase.

How long will that process take?

I talked to the contractors [in mid-December] and they wanted three months to do a 32-stall barn. We originally thought we would try to begin doing it before this meeting. It's not impossible that we may try to do one during the meeting.

It will be a slow process of slowly replacing those barns and making it a real showcase.

With the growth of simulcasting and in-home wagering, what can you do to attract people to the track?

We are going to be trying to make Santa Anita more of a destination center. I think you'll see a number of new group events. We're adding a tram that will allow us to do over 10,000 visitors a day to the Seabiscuit tour on the backstretch.

I think it's more about exposing Santa Anita to people who normally wouldn't come there. I think with the new management team that's at Santa Anita that's a high priority.

Santa Anita once led the circuit in purses and handle. Now Del Mar is the leader. How can you get Santa Anita back on top?

I think that's going to be difficult. I think what we need to do is get back to being fan-friendly. We are at a real disadvantage. Del Mar has only seven weeks and has fantastic weather in an ideal location. We're facing certain types of weather.

I'm very confident that our attendance and handle are going to up dramatically this year.

How do you plan to grow purses?

I think one small step is be able to acquire more revenue from our wagers. Some of the simulcasting arrangements and [account wagering] arrangements that have been made over the years are just not working. We're in the process of restructuring those. Once again, any dramatic improvement in increased purses is probably going to come in a relationship with the tribes. That is where we can put Santa Anita as the premier racing capital of the world, if we can work out the right arrangement.

Would all the tracks benefit from that, or would it be a track-by-track situation?

The way the talks are going now, all the tracks would benefit.

What would racing have to give the Indians in return?

Well, that's part of the negotiations, and I'd hate to get into that (laughs). Obviously, I think we have some things the tribes would like to work with us in cross-marketing.

What about the legislative agenda for 2005?

We're having meetings on that subject. We'll meet with the TOC on that. After those meetings, we will have an update.

Some suggest you can build handle by offering rebates. Others suggest rebates make for an inequitable playing field. What's your view?

As someone who has been the most outspoken about rebates, the misconception is that racetracks are against the player getting a rebate. Where we have a problem as a racetrack and the racing industry, is the rebate companies making just gigantic profits.

Some of the rebates are just excessive. That's why we're trying to work with the rebate companies now on what is a fair model as to what would be fair to the player, the company, and our industry - both our industry and the horsemen's groups.