Updated on 09/16/2011 8:12AM

Stronach's vision bumps up against reality


WASHINGTON - At a time when most people are pessimistic about the future of Thoroughbred racing, Frank Stronach has a messianic passion for the sport. He believes in it so strongly that his company has spent hundreds of millions of dollars purchasing racetracks, most recently Laurel and Pimlico. He is unwaveringly confident in his own ability and his vision, declaring: "I know this business. I can make it work." And he is undaunted that his latest acquisitions have been in the doldrums for a decade. He predicted, "We'll get Maryland back to being a major racing state again. We'll bring it back to its glory days."

Those of us who share his love of the game want to see Stronach succeed. If a man with his commitment and resources can't do it, who can? Yet within the industry his ambitions have generated reactions ranging from skepticism to contempt. Although he has a grand plan to revive business at American racetracks, he has no evidence whatsoever that it will work. In fact, Stronach's ideas run counter to most of the recent trends in the sport.

Stronach came to The Washington Post on Thursday for a luncheon with editors and writers, and introduced himself by telling about his entry into the auto-parts business. After emigrating from Austria to Canada, he started a small tool-and-die company with a single employee and built it into a powerhouse, Magna International, that today employs 70,000 people around the world. Magna has achieved such an impressive growth rate that Stronach envisions the day that his company will be bigger than General Motors.

Stronach surely has the business credentials to question the way the racing industry has been run. He has ill-concealed contempt for the members of the racing establishment who have complacently watched their industry decline. "There is a shortage of people with good business heads who understand horse racing," he said.

Stronach fell in love with racing after buying his first yearling for $700 in the early 1960's; his financial success has allowed him to indulge in his hobby on a grand scale, operating one of the nation's most successful racing stables. Four years ago he bought his first racetrack, Santa Anita Park, for $126 million, and created a new company, Magna Entertainment, which has subsequently gone on a binge of racetrack acquisitions. When the Maryland deal is finalized, Magna will have 14 tracks in its corporate stable.

Many of Magna's goals are unassailably logical. Jim McAlpine, the company's president and CEO, noted that the Magna tracks have "huge economies of scale" by being part of the same organization; there is no need, for example, for 14 different marketing departments. Its network of tracks gives Magna a package of racing products that it can televise into people's homes. "We see a great national and international opportunity," McAlpine said.

But Stronach does not accept the premise that the sport can prosper only by beaming races to as many television sets as possible. Even though racetrack attendance has been steadily eroding for decades, he believes that the sport can once again attract large crowds. The key, he says, is to have attractive facilities that offer a variety of entertainment options besides racing. Stronach proudly displayed an artist's rendition of a new Pimlico, a building that would have "a night club, an entertainment floor, a big sports bar" in addition to all of the usual racetrack amenities.

Recognizing that Pimlico now is a seedy facility in a seedy location, Stronach promised that the new Pimlico would be "a very safe place and an exciting place where couples can go, single women can go." Magna has been criticized for making such grand promises and failing to deliver, but Stronach dismissed those criticisms. "We can't easily fix what was neglected for 80 years," he said. "Imagine what we've done in just a short period of time!" He said he expected that a whole new Pimlico would be built in time for the 2005 Preakness.

But even if Stronach does make good on his promises, it is by no means certain that these glamorous new racetracks will significantly stimulate the racing business. Another entrepreneur, Richard Duchossois, built the best racetrack in the world, Arlington Park in Chicago, but its virtues weren't enough to make it a financial success. Stronach's belief that tracks should offer non-racing diversions is an unproved concept. Last winter, Gulfstream Park aggressively promoted weekend rock concerts held during the races, but in the process it significantly alienated its core constituency.

Stronach's ideas seem fanciful because they are such a contrast with the reality of much modern-day racing. On a typical day, Pimlico is populated by a couple thousand hard-core horseplayers who stare at television monitors and wager on simulcasts. It is hard to imagine families and couples coming to this desolate neighborhood to enjoy a day of varied entertainment. But Stronach not only envisions such a scene, he thinks this is key to racing's salvation. Magna's chairman has plenty of critics, but none would ever accuse him of failing to think and act ambitiously.

(c) 2002, The Washington Post