By Andrew Beyer
Saturday, April 11, 2009
Halsey Minor has made hundreds of millions of dollars as a technology entrepreneur. His San Francisco-based firm bills itself as an investor in start-up companies that seek to "change the shape of business on the Internet." A man on the cutting edge of commerce seems an unlikely candidate to get involved in the moribund horse racing industry. Yet Minor aspires to own racetracks and sees a once-in-a-lifetime opportunity to acquire a portfolio of them. Magna Entertainment, the biggest owner of U.S. tracks, has declared bankruptcy and Minor hopes to buy almost all of the company's properties -- including Santa Anita, Pimlico and Laurel.
Asked if his aims were based on sentiment or a business decision, Minor said: "Turning around American racing is my passion. It's what I think about all day. It's a psychological weakness."
Minor grew up in Charlottesville, where "thoroughbred racing and horses were part of my life. My mother was one of the top breeders and trainers of English show jumpers. I had a pony in my yard when I was 5. I was 8 or 9 when Secretariat and Riva Ridge [both raised in Virginia] were ascendant. The first business I started was painting fences at horse farms."
For most of his 44 years, Minor has been consumed with his business ventures. He founded the tech-news company CNET, which became an Internet giant (and eventually was sold to CBS). For recreation, he bought a few thoroughbred racehorses. He spent $15.3 million for a horse farm -- Carter's Grove, a historic plantation near Williamsburg. But as he started to get involved in racing, "I was struck by the deplorable condition of the industry," he said.
Minor decided he wanted to do something about those conditions. He made an unsuccessful effort to buy Miami's defunct Hialeah Park -- "the grande dame of American racing, the perfect track," Minor said. As Magna Entertainment was teetering on the brink of bankruptcy, Minor publicly announced his willingness to buy the company's debt. "They wouldn't talk to us. They literally blew us off," Minor said. Magna's chairman, Frank Stronach, resisted relinquishing any control of his racetracks.
Even after the bankruptcy filing, Minor believes that Stronach still doesn't want to let go. "He absolutely believes that nothing is going to change," he said. "He's doing everything possible to make the process difficult."
Nevertheless, Minor wants to make a bid for all of the Magna tracks except Gulfstream Park. He would pay off Magna's $175 million debt to its parent company, MI Developments, and negotiate a deal with the other creditors.
"My goal," he said, "is to bring this to a close before [the bankruptcy case] turns into a shower of lawsuits."
Minor sounds undaunted by the challenges he would inherit if he is successful in this bid. "I do not worry for a minute about bringing large crowds to this sport," he said. "There are so many ways to make horse racing the coolest sport in America." He especially looks forward to tackling the problems of Pimlico and Laurel, with their dilapidated facilities and vanishing fan base. "The Maryland Jockey Club is the first place I'm going to fix," he said.
But even for an accomplished and creative entrepreneur, fixing the horse business may be nearly impossible.
Many powerful factions are involved among the sport-track owners, state regulators, horsemen and account-wagering providers -- and no individual can dictate their behavior. Minor may not have the temperament to be a consensus-builder. Portfolio magazine portrayed him as "arrogant," "pathological" and reviled by many of his colleagues in the tech world.
The Portfolio profile and other articles about Minor also raise questions about the health of his finances in the wake of a costly divorce and his penchant for lavish spending -- $22 million for his house in San Francisco, $20 million for a house in Los Angeles. Minor's ideas about reviving horse racing, often drawn from his other business experiences, sometimes sound quixotic. "I had 110 million people a day come to my Web site," he said. "Convenience is paramount for people today. Everything about a racing operation has to be convenient; people don't want to drive in traffic." Minor said he spends hours looking for open spaces in urban areas that might be potential sites for a racetrack.
The idea of building expensive new tracks, or restoring old ones in a grand fashion, collides with the reality of modern racing. Horseplayers have already opted for convenience by watching races on television or a computer and betting from home instead of going to the track. Even if an entrepreneur were to build the Taj Mahal of racetracks, many of his potential customers would still stay home to bet. Stronach, too, had grand plans for rebuilding tracks and broadening the appeal of horse racing, and the results were a debacle.
Yet even though racing fans may question Minor's chances of success, they should cheer his efforts to take control of the Magna tracks. Merely getting these tracks out of the hands of Stronach's dysfunctional company will be an important step. And if the buyer happens to be a smart, innovative optimist who believes that horse racing can be revived as a major spectator sport, the industry could scarcely hope for anything more.