Change of Plans

- Thanks much to reader Kevin for catching that item in the Form, buried in Jay Privman's lead article, regarding the apparent change of plans for King of the Roxy. And shame on me for ever assuming that logic would prevail when it comes to the Derby Trail, especially with a character like Barry Irwin. I had the horse in the Hutcheson, but precisely because of the cutback in distance. By Littleexpectations, a full brother to Valid Expectations, by Valid Appeal, and out of a Bold Forbes mare, you'd think he'd prefer to stick to the shorter races, but he won impressively, and do you expect Team Valor to pass up taking a shot at the roses?

On the Team Valor website, we read of the picture perfect ride from masterful Eclipse Award winner Edgar Prado. That's funny. It wasn't long ago that they skewered Prado over his ride on Oh So Awesome in their private newsletter. I guess all is forgiven. Until the next time they need somebody to blame.

- Magna officials stated during an investors conference call that slot revenues at Gulfstream have fallen off “significantly” in January and February. [Bloodhorse] They discussed some of the proposed legislative changes I posted about yesterday as possibly providing relief. Maybe there's just too much gambling around - the former Hollywood Dog Track and the Hard Rock Cafe are close by - and neither Pompano Park nor Dania Jai Alai have even opened their slots parlors yet. Though the company announced that it had narrowed its losses and reduced expenses in the 4th quarter, Matt Hegarty of the Form read the fine print.

In a note to its financial statements, the company said that it had an accumulated deficit of $396.3 million and a working capital deficiency of $94.2 million as of the end of last year. "The company's ability to continue as a going concern is in substantial doubt and is dependent on the company generating cash flows that are adequate to sustain the operations of the business," the note stated.

Magna's financial statements for 2005 also questioned the company's ability to continue as a going concern.

That last statement is true, but my recollection is that that was based on the possibility of the sale of the Meadows harness track falling through. The $87.5 million loss for 2006 came despite a $126.4 million gain from that sale. Most ominously, keep in mind that Magna Entertainment (MEC), the track company, is 59% owned by MI Developments, the real estate company which additionally controls some 96% of the voting power of outstanding MEC stock, and to which the track company owes much of its debt.

MID’s relationship with MEC provides the Real Estate Business with the opportunity to participate in the development or redevelopment of MEC’s lands and properties, including those used in its core racing and alternative gaming operations. [MID Development Website]

I imagine that land that Gulfstream sits on would be most valuable as a spot for yet more condos in Hallandale. Already, the company is talking about selling off the Palm Meadows training center.

- The entries are already in for Saturday's Louisiana Derby card at Fair Grounds; no excuse for not being prepared for these races. Unless of course it rains, and all of our work goes right down the drain. I'm most excited for the Louisiana Derby, a fascinating matchup of horses from east and west, some, such as Circular Quay and Liquidity, showing some solid form, and others, like Soaring By and Ketchikan, with seemingly untapped potential, . My very early impression is that you gotta look long and hard at Liquidity, another California horse with solid, improving form who has been working steadily over the Cushion Track at Hollywood. His one trip east was a bust, but what exactly was he doing running in the Grade 1 Champagne off of one race? He does look like a logical favorite given his gaudy Beyer in the Sham, but Circular Quay should take a ton of money from the perception that the accident in the Risen Star prevented him from making a big winning move. But more on this later. (Though one more thought - if Liquidity does win, then how good does Ravel look?)