Magna removes Laurel, Pimlico and Preakness from auction list

LIZ FARMER
Daily Record Business Writer
May 1, 2009 6:43 PM

In a last-minute move, Magna Entertainment Corp. has taken Maryland’s thoroughbred racetracks and the Preakness Stakes off the auction block, but city and state officials remain cautious about the future of those properties here.

Magna, which had included Laurel and Pimlico racetracks and the Preakness in its list of assets it wanted to auction, has removed those properties from its assets up for sale in its revised auction procedures proposal submitted late Friday afternoon.

The properties belong to the Maryland Jockey Club, which was the Magna asset removed from the auction proposal. The Bowie Training Center in Prince George’s County is also no longer up for auction.

“We are still looking at our alternatives with respect to those assets, and it is unclear what value can be generated,” said Magna’s attorney, Brian S. Rosen of Weil, Gotshal & Manges LLP in New York. “Pimlico, with the Preakness, for 364 days a year it lives on that one day a year, and we’re trying to see if there something else that can be done to those assets.”

That includes looking at slots options and further discussions with the state, Rosen said.

Rosecroft Raceway may reopen this weekend

LIZ FARMER
Daily Record Business Writer
May 1, 2009 12:53 PM

Rosecroft Raceway, which earlier this week had its simulcast wagering signal yanked, may be back open to take bets on the Kentucky Derby Saturday.

A Prince George’s County Circuit Court judge has issued a temporary restraining order that would allow the track to regain its televised signal for thoroughbred racing and simulcast wagering, but it is contingent upon payment of a $2 million bond — money that raceway owner Kelley Rogers says he does not have.

Rogers and his attorney are asking the judge to change the order to require a cash bond in the “hundreds of thousands,” Rogers said. With about $700,000 in cash on hand, the bond payment would nearly deplete the raceway’s immediate funds but keep it open for one of its biggest moneymaking days of the year.

Rogers said this year’s projected profit from bets placed during the Kentucky Derby day is about $140,000, if Rosecroft reopens.

Rosecroft Raceway’s simulcast signal is pulled

LIZ FARMER
Daily Record Business Writer
April 28, 2009 7:19 PM

Four days before the Kentucky Derby, the Maryland Racing Commission has voted to cut off Rosecroft Raceway’s simulcast signal of thoroughbred races in response to the track owner’s refusal to pay a $5.9 million fee for the signal rights.

The 6-2 vote came during a contentious commission meeting held at Pimlico Race Course Tuesday. One member was absent from the meeting.

Kelley Rogers, president of Cloverleaf Enterprises Inc., the horsemen-owned parent company of Rosecroft, said after the meeting he intends to file a motion in Price George’s County Circuit Court Wednesday requesting a stay order on the commission’s action.

If granted, the order would allow Rosecroft, which has suspended live racing and functions solely as a simulcast betting site, to take bets on the Kentucky Derby this Saturday.

Preakness ticket sales down 12%

LIZ FARMER
Daily Record Business Writer
April 23, 2009 5:31 PM

With just over three weeks to go, ticket sales for the Preakness Stakes — Maryland racing’s biggest moneymaker — are down 12 percent, according to the Maryland Jockey Club.

While some blame the economy, others say the new policy banning outside alcohol and other beverages from the infield may be playing a part, despite the fact that the ticket price has not increased for the May 16 race.

“I think it’ll be fine, but they might suffer from that a little bit,” said Lee Corrigan, of Elkridge-based Corrigan Sports Enterprises, who is organizing the InfieldFEST event. “It’s a tough year and financial market to be doing what they’re doing, but I think they had to for many reasons.”

Wagering at Laurel Park falls 26 percent

LIZ FARMER
Daily Record Business Writer
April 21, 2009 7:52 PM

After a racing season at Laurel Park marked by the poor economy and the bankruptcy of its owner, total wagering at the track dropped by nearly 26 percent this winter — nearly three times the national average.

Over 58 live racing days — one fewer than last winter — the total amount wagered dropped by $56 million to $219.8 million, according to the Maryland Jockey Club. Laurel’s season ran from Jan. 1 through April 11.

According to the Equibase Company LLC, an industry research firm based in Kentucky, wagering in the U.S. from Jan. 1 through March 31 totaled $3.1 billion, a decline of 9.4 percent from the corresponding period in 2008.

Tim Rice, an industry analyst with Rice Voelker LLC in Louisiana, called Laurel’s struggle “significantly worse” than other tracks’ since the economic downturn began last fall and attributed the gap to competition from neighboring states.

Magna can’t bundle properties

LIZ FARMER
Daily Record Business Writer
April 20, 2009 8:31 PM

The state’s position in its fight to keep the Preakness Stakes got a little stronger Monday after a judge ruled that Magna Entertainment Corp.’s Maryland properties could not be bundled with its out-of-state properties in the bankruptcy auction process.

If bankruptcy judge Mary F. Walrath hadn’t ruled in Maryland’s favor, there’s no way the state could have matched bids for the Preakness, Pimlico Race Course and Laurel Park, said Raquel Guillory, spokeswoman for the Office of the Attorney General.

“It seems clear that the company is now seriously taking into account the importance of the state’s regulatory and public interest of the racing industry here in the state and it’s certainly a welcome move,” she said.

Preakness is a trademark of the Triple Crown

LIZ FARMER
Daily Record Business Writer
April 16, 2009 8:15 PM

Despite the recent efforts to keep the Preakness Stakes at Pimlico Race Course, the race’s status as the second leg of the Triple Crown is only loosely protected by a marketing group and trademark that do not legally bind it to any state.

The Kentucky Derby, Preakness Stakes and the Belmont Stakes have been referred to as the Triple Crown races since the 1930s. But their official designation as such and the Triple Crown trophy didn’t begin until 1950.And at least one member of that group is concerned about a new owner’s potential impact on the Triple Crown brand.

“I would argue that if you were to move the Preakness from Pimlico you would have a new construct, and you might still call it the Triple Crown, but I wouldn’t call it the Triple Crown,” said Charles Hayward, president and CEO of the New York Racing Association Inc., which owns the Belmont Stakes. “We’re watching this very closely.”

Technically, a developer could buy Preakness and Pimlico but still move the race to an out-of-state track without violating the articles of incorporation of Louisville-based Triple Crown Productions LLC or the Triple Crown trademark.

City officials look for legal ways to keep Preakness at Pimlico

LIZ FARMER
Daily Record Business Writer
April 10, 2009 3:54 PM

In an attempt to secure Pimlico Race Course’s future as host track of the Preakness Stakes, Baltimore officials are looking at other legal avenues to give the future owner more incentive to keep the race there.

According to City Solicitor George Nilson, the city is considering changing the track’s zoning designation to allow for retail and mixed-use properties to increase the value of the 116-acre site — but there’s a catch.

The winning bidder for the track must plan on keeping Preakness, the second leg of racing’s Triple Crown and the industry’s biggest moneymaker in the state, at Pimlico.

“It’s a big piece of land and it’s underutilized space — generally used once a year as parking for Preakness,” Nilson said last week. “There are commercial uses that could be put on the property ... that would create more density and more variety of uses while being sensitive to neighborhood ... and we’d make that available if the owner were to continue to run Preakness there.”

Nilson said city officials planned to meet this week to discuss more specific possibilities and that their next move had not been finalized yet.

Legislation seeks to keep Preakness in Maryland

ANDY ROSEN and LIZ FARMER
Daily Record Business Writers
April 8, 2009 9:36 AM

ANNAPOLIS — Gov. Martin O’Malley on Wednesday began a late-session push for stronger state control over the fates of Pimlico and Laurel racetracks and the Preakness Stakes.

All three properties are owned by Magna Entertainment Corp., which has filed for federal bankruptcy protection in Delaware. The company is asking for an auction of its assets, including the Maryland tracks, on July 30, and uncertainty over the future of the Preakness — the second jewel in horse racing’s Triple Crown — has raised increasing concern with city and state officials.

A bill proposed by O’Malley and introduced Wednesday would give the state power to seize the tracks through eminent domain, and would also give the Maryland Economic Development Corp. the authority to issue debt to buy the tracks. The state already has the right of first refusal over the sale of Preakness, but some are concerned about how that would play out in bankruptcy court.

Orioles' opening day - Vendors not selling optimism

LIZ FARMER
Daily Record Business Writer
April 6, 2009 8:01 PM

The weather may have cleared for the Orioles home opener against the Yankees on Monday but the business forecast was still gloomy from vendors who rely on the ballpark for sales.

Vendor Jay Smith, of Philadelphia, said he usually sells ‘a couple hundred’ soft pretzels at an event, ‘but Orioles [games] are usually below average for me.’“I’ll normally sell a couple hundred [pretzels] at an event, but Orioles [games] are usually below average for me,” said Jay Smith, a Philadelphia-based pretzel vendor who has been in the business for nearly a half century.

“The only games that are good are the ones against the Yankees and Red Sox,” he said. “Otherwise it’s practically a wash for me to come down here and do this.”

The sentiment was echoed up and down Howard and Conway streets outside Oriole Park at Camden Yards Monday afternoon as vendors hawked food, t-shirts and souvenirs to fans making their way to the ballpark.

“The Yankees and Boston — they’re the ones that keep us in business,” said Lauren Edgar, who works at one of Stadium Caps’ two stands on Howard Street.

Tracks draw interest from 2 prominent Baltimoreans

LIZ FARMER
Daily Record Business Writer
April 2, 2009 6:21 PM

With another Baltimorean showing interest in rescuing Laurel Park and Pimlico Race Course, keeping the Preakness Stakes from leaving the state may easier than solving the long-term problems of the Maryland racing industry.

“The state is going to have to come to grips with how to save racing in the state — we can’t just do it with keeping 40 racing days at Laurel and one race [Preakness] at Pimlico,” Alan Foreman, general counsel for the Maryland Thoroughbred Horsemen’s Association, said Thursday.

A spokesman for Baltimore developer David S. Cordish said Thursday that Cordish plans to bid for Pimlico, Laurel, the Preakness and the Bowie Training Center, which Magna Entertainment Corp. has put up for sale. Magna, more than $553 million in debt when it declared bankruptcy on March 5, is accepting bids for its assets until July 8.

Orioles owner Peter G. Angelos also met with state officials last month to offer his help in ensuring the second jewel of racing’s Triple Crown stays here.

Bringing the Markakis brand to Baltimore and beyond

LIZ FARMER
Daily Record Business Writer
April 2, 2009 6:16 PM

When the Orioles signed 25-year-old Nick Markakis to a six-year, $66.1 million contract extension in February, the team brought home its top priority in the offseason.

John Maroon: ‘So what we want people to think of is Nick [Markakis] is a guy that cares about Maryland and is an outstanding baseball player — which is what people here think now — and continue that on a national scale.’His future in Baltimore no longer a question mark, Markakis has hired a local firm to build his brand and catapult him into the national sports scene.

But for Markakis to jump from local hero to national celebrity while playing in a midsized market, the onus is on him not to just be good — he has to be great.

There are two ways that can happen, said John Maroon, president and founder of Markakis’ new agency, Marriottsville-based Maroon PR. One is to “catch lightning in a bottle” and garner national media attention through some extraordinary turn of events.

That happened to sports agent Joe Linta’s client, Ravens quarterback Joe Flacco, when the rookie led the underdog team to an 11-5 record last season and one win away from the Super Bowl. Since then, endorsement deals, including one from Pizza Hut, have been pouring in during the offseason, Linta said.

The big drop in O’s attendance doesn’t lend itself to a quick fix

LIZ FARMER
Daily Record Business Writer
April 2, 2009 6:06 PM

Come Monday, the streets around Oriole Park at Camden Yards will be alive with baseball fans coming out of their winter hibernation — a guaranteed swirl of black and orange, mixed with visiting Yankee blue — and filled with anticipation, predictions and for some, maybe a little hope.

But it’s not Opening Day Orioles marketers have to worry about. Nor will it be the other 17 days this Orioles spokesman Greg Bader: ‘Fans are less willing to commit those dollars upfront to specific games during the course of the year. They might be more willing to do that when the economy is strong.’year that the Orioles host the Yankees or the Boston Red Sox — which both draw sizable contingents of out-of-town fans.

It’s those other 63 games on Baltimore’s home schedule; those games that last year averaged about 20,700 people in a more than 48,000-seat park and highlight the fact that it hasn’t been easy to fill Camden Yards these days.

But the team’s attendance problem has been caused by a number of factors and doesn’t lend itself to a quick fix.

With 11 straight losing seasons and nine straight years of failing to crack the 3 million mark in annual attendance at Camden Yards, 2008 marked a new low for the team and its ability to draw fans.

Unfortunate milestones last year included producing the least-attended game in Camden Yards history with 10,505 fans one early April night and 1.95 million in total attendance for 78 games — a record-low for the ballpark’s 17 seasons.

Camden Yards' video boards complete HD transition

LIZ FARMER
Daily Record Business Writer
April 1, 2009 6:36 PM

If you thought there was something a little off last year with the footage on the high definition video board at Oriole Park at Camden Yards, you were right — the project was only half finished.

Bryan Krandle, in-game entertainment manager for the Orioles, works the high-definition scoreboard at Camden Yards from the stadium’s new control room.On Tuesday, after two off-seasons of work and an investment of approximately $9.1 million from the Maryland Stadium Authority, team officials unveiled the completed control room, which can now play high definition video and sound.

Last year the new video board went up — replacing the 16-year-old JumboTron — and fans got sharper graphics, but the control room at the park was still only capable of transmitting in standard definition.

“We are now one of 10 teams to be fully high definition-capable, which is an honor,” said Monica Barlow, director of public relations for the Orioles. “This is going to be a great entertainment experience for our fans.”

The Orioles join the Nationals, Mets, Yankees, Braves, Reds, Royals, Marlins, Diamondbacks and Giants in teams with ballparks that are fully HD-capable. The video board for Nationals Park, which opened a year ago, has about twice the square footage of the boards at Camden Yards.

Senate President Miller: Buy Preakness, build track if Magna sells

LIZ FARMER
Daily Record Business Writer
March 17, 2009 8:05 PM

Maryland Senate President Thomas V. Mike Miller Jr. said Tuesday that the state should consider building a racetrack and buying the Preakness Stakes if Pimlico’s bankrupt owner is forced to sell it.

Alan Forman, general council for the Maryland Thoroughbred Horseman's Association, speaks to the Maryland Racing Commission during Tuesday’s meeting at Laurel. Commission Chairman John B. Franzone, left, and Commissioner Louis Ulman listen.But at a meeting of the Maryland Racing Commission later in the day, Maryland Jockey Club owner Tom Chukas said it is “business as usual” right now.

“The bottom line is Maryland live racing will continue, simulcasting will continue and Preakness will continue,” he said.

Chuckas noted that since parent company Magna Entertainment Corp. declared bankruptcy on March 5, the Jockey Club has received a $13.4 million loan to continue operations while the corporation reorganizes.

Miller, D-Calvert and Prince George’s, told reporters Tuesday morning that building a track and buying the Preakness, by far Pimlico Race Course’s biggest money-maker, would be “last ditch” options the state might have to consider to keep Preakness here.

Racing is important to Maryland, Miller added, pointing to stories about George Washington coming from Virginia to wager on horses in Annapolis.

At Morgan State - turning March Madness bid into bucks

LIZ FARMER
Daily Record Business Writer
March 16, 2009 7:53 PM

The school pride in Morgan State University’s first-ever March Madness appearance is one of those intangibles sports marketers say can translate later into cold hard cash — but only if the school takes action now.

Morgan State Director of Athletics Floyd Kerr: ‘The excitement on campus is phenomenal…our kids are creating their own ‘good old days.’ I think the residual impact will be more clearly defined after the school year.’“When enthusiasm is high, people make the mistake of saying that’ll do it all by itself,” said Bob Leffler, a Baltimore-based sports marketer and a Morgan State alumnus.

“[Morgan] has a new stadium, a new [basketball] coach and they’re winning — you’ve got to grab that by the neck and spend money and make it happen,” he said.

For a small school like Morgan State, those crowd-pleasing rewards to making the NCAA Division I basketball tournament are the ones that can really represent big bucks.

“The excitement on campus is phenomenal ... our kids are creating their own ‘good old days,’” said Floyd Kerr, the university’s director of athletics. “I think the residual impact will be more clearly defined after the school year.”

In the meantime, Morgan’s marketing company plans on doing a promotion for 2009-10 basketball season ticket sales around the tournament appearance and is creating other athletics department promotions based on the berth, according to Kerr.

Pepsi wants its products back from Magna

LIZ FARMER
Daily Record Business Writer
March 10, 2009 12:33 PM

With the owner of Laurel and Pimlico race tracks filing for bankruptcy, Pepsi is asking Magna Entertainment Corp. to return nearly $45,500-worth of product recently delivered to Maryland tracks and others across the country.

The Pepsi Bottling Group filed a notice in bankruptcy court Monday asking for the return of products it delivered to the company’s U.S. tracks in the 45 days before the Canadian-based company — North America’s biggest race track owner — filed for bankruptcy last Thursday.

According to the reclamation demand, Pepsi made eight deliveries to the Maryland Jockey Club, Laurel Park, Pimlico Racecourse and Bowie Training Center between Jan. 29 and Feb. 20 totaling $1,583.

A reclamation demand is the right of a vendor to reclaim goods sold to a financially insolvent buyer.

After bankruptcy filing, Magna to seek approval to sell all its assets

LIZ FARMER
Daily Record Business Writer
March 5, 2009 1:54 PM

The future of horse racing in Maryland lurched further toward uncertainty Thursday after the owner of Laurel Park and Pimlico Race Course filed for bankruptcy. Magna Entertainment, the company that owns Laurel and Pimlico racetracks, has filed for bankruptcy protection.

To raise cash, Magna Entertainment Corp. said it was selling its race tracks in Florida, California and Texas to its parent company, and would seek court approval to market its “other” assets — including Laurel and Pimlico — during the Chapter 11 process.

The prospect of Pimlico, home of the Preakness Stakes and the biggest racing day in Maryland, and Laurel Park being up for grabs to the highest bidder has state racing officials upset.

“The thing that concerns me is we don’t know who that could be, and someone could come in and ... run [races for] three weeks at Pimlico because the Preakness is a gold mine, then stay dark the rest of the year,” said John Franzone, chairman of the Maryland Racing Commission. “And that’s not acceptable by any means.”

Pimlico owner Magna's stock delisted

LIZ FARMER
Daily Record Business Writer
March 4, 2009 7:32 PM

On the day before many believe it will declare bankruptcy, the Canadian-based company that owns Laurel and Pimlico racetracks has notified the federal government its stock will be delisted from the Toronto Stock Exchange.

Magna owns racetracks in Maryland including Pimilico.Magna Entertainment Corp.’s stock, which opened at 30 cents a share on Wednesday, will be delisted on April 1. Following the news, shares fell more than 31 percent for the day, closing at 20 cents. Two years ago, the stock was worth $76 a share.

Magna received the delisting notice from the Toronto Stock Exchange Tuesday, two days before its payment on a $40 million loan to a Canadian bank is due — the first of three loans totaling $226 million due this month for the financially distressed company. After watching Magna accumulate more than $600 million in losses over the last six years, racing industry analysts and officials have said they expect the company to declare bankruptcy as early as Thursday.

Dew Tour not returning to Baltimore

LIZ FARMER
Daily Record Business Writer
March 2, 2009 11:08 AM

After kicking off its season in Baltimore for the last two years, the 2009 AST Dew Tour will bypass Baltimore, state officials announced Monday.

Last June’s stop drew more than 52,500 fans to the parking lots surrounding M&T Bank Stadium over four days and generated about $10 million in economic impact, according to city tourism officials. Michael Frenz, executive director of the Maryland Stadium Authority, said they were disappointed in the decision but he hoped the loss would be buffered by other sporting events coming to Baltimore this year.

“The economic impact is not so great for us to say all is lost,” he said, noting that the state Office of Sports Marketing’s director, Terry Hasseltine, is continuing to work on bringing new and return events to Maryland such as the NCAA men’s lacrosse final four, which Baltimore will host again in 2010 and 2011.

The stadium authority said a conflict with the Orioles’ schedule in June and a change in the tour’s format contributed to the decision.

“We’re disappointed they are not coming this summer and we welcome them back in the future,” said Frenz.