Frank Stronach Questions TSG Management

As Frank Stronach stood on the grass course May 18 at Pimlico Race Course while horses were being saddled for the Preakness Stakes (G1), the feeling was considerably different for him than in past years.

Since 2002, when he first purchased a share of Pimlico and Laurel Park from the De Francis family, he could walk the grounds at the Preakness as an owner of the facility, knowing he had a major say in every detail of the racetrack's operation.

Yet at the 144th Preakness, 2 1/2 years after his daughter, Belinda, was introduced as new chairman of The Stronach Group and seven months after Frank Stronach filed a lawsuit seeking to regain control of The Stronach Group, the TSG founder was as much of a guest on the Pimlico grounds as anyone else.

"I've been shut out of the process," said the 86-year-old Stronach, who filed a CA$520 million ($386 million) lawsuit Oct. 1 to regain authority of the company he built.

While Belinda Stronach has control of the company's racetracks pending the results of her father's lawsuit and the countersuit she filed Jan. 21, Frank Stronach stands on the outside looking in. He remains committed to being involved in the horse racing industry and is as determined as ever to enacting measures he believes will benefit the sport.

He also places blame for the catastrophic winter at TSG's Santa Anita Park, which includes 26 fatalities from Dec. 26 to the present day and a stoppage of racing for more than three weeks, on key management at the company.

"My concern is what's the future of horse racing," he said Preakness Day. "What we have done means we could be ruled off, and I don't want to see that."

Looking back at this winter's ugly events at Santa Anita, Frank Stronach said they were the result of "gross neglect by a small number of people at The Stronach Group.

"Belinda hasn't been in it enough to understand. So, there are other people who are grossly negligent," he said. "There's enough evidence and a paper trail. They did not implement the medication protocol program. They did not implement plans I had to improve the racetrack."

In response, The Stronach Group issued a statement disputing Frank Stronach's claims, pointing out the company's work with stakeholders to improve the sport and that he has no official role with the company.

"The Stronach Group is proud to have worked with the California Horse Racing Board, as well as jockeys, trainers, and horsemen from all over the country, to push for generational reforms aimed at protecting riders and horses throughout our sport," the statement said. "To avoid any confusion, it should be noted that Frank Stronach has no official role with The Stronach Group, nor does he speak on behalf of, or have oversight of any of our tracks, including Santa Anita. The statements made by Mr. Stronach are untrue and will be addressed in the appropriate legal forum.

"TSG will continue to work with our sport's stakeholders on progressive reforms to augment safety and bring the sport of horse racing into a new era."

Four days after Stronach made his comments, Belinda Stronach addressed California lawmakers and detailed how more than 100,000 horses have safely used the racing surface since Santa Anita re-opened March 29 with new regulations for equine care and safety. Santa Anita reduced the maximum dosage of race-day Lasix, made veterinary records available, and set in place limitations on the use of any pain or anti-inflammatory medication and treatments.

Since those new house rules have been put in place at Santa Anita, the catastrophic breakdown rate during racing has been reduced below both the track's 2018 rate and the national 2018 rate. There have been three fatal breakdowns during racing and one during training since the new rules were put in place March 29. The industry standard, the Equine Injury Database, tracks breakdowns during racing—allowing for comparison from track to track.

From March 29-May 27 there have been three catastrophic breakdowns racing at Santa Anita from 1,911 starts, or 1.57 per 1,000 starts. While a small sample size, the 1.57 rate is down 23% from the 2018 rate at Santa Anita and down 7% from the 2018 national rate of 1.68.

While reflecting on his legal battle with his daughter, Frank Stronach said he tried to work out an agreement with Belinda on how to handle the racetracks and was rebuffed.

"The big rift started because my daughter wanted to sell the racetracks. The racetracks are worth more than racing. I said I don't want to sell. You have to make a commitment," he said. "I tried, I tried, I tried with Belinda. I created everything. I said there's enough money for the grandchildren. Work hard, and try to create a legacy which society benefits from. I've always been driven to do the right thing. What's the big problem in doing the right thing?

"The big question is that I should be able to decide what's right for me and my family. I see this as a wake-up call. Maybe if I had left things alone, down the road grandchildren would have fought for money. To avoid the fights, I want a trust run by a charter (to run the racetracks). I feel it's my right to do it. I am the rightful owner. Agreements were signed so I could run it, so all the indications are that I'm the owner. I've paid for everything. I've done everything. The situation is sad but on the other hand, life has been so good to me. The next step is maybe a judge decides. I've tried for the last two years (to resolve the dispute), but I've made no headway."

Stronach reiterated past comments that he would like to place control of the TSG racetracks (like Santa Anita, Gulfstream Park, Laurel, Pimlico, Golden Gate Fields) in the hands of a trust that would operate them under the guidelines of a racing charter.

"I feel if we put the tracks in a trust and it's run by stakeholders and governed by a racing charter of rights, it would be a good dividend for the future," he said. "It should not only preserve racing but it should take it to the next level. I worked very hard. I built one of the world's No. 1 companies from the ground up. I built Magna International with 175,000 employees. The reason we were successful was because we had a corporate charter of rights and a labor charter of rights. Therefore, there was harmony in the company and the employees felt they were part owners.

"I want to make sure the racetracks don't go down. You have to make sure there is not bureaucratic control. (The trust has to consist) of the stakeholders, people who have skin in the game. Maybe you would have to have five horses in order to vote for a director or at least five broodmares and 200 acres (of farmland).

"Could we develop some hotels, condominiums, and stores? Of course, but not to the detriment of the racetracks. We must complement them. I want to ensure that. I came to that conclusion. That's why I want to place the racetracks in the hands of a trust and the trust is made up of stakeholders, the horse owners, the trainers, the jockeys, the vets, and the breeders. The stakeholders have to govern by the racing charter of rights to prove there's no cheating and that we take care of horses while they race and after they race. A small portion of the handle has to go to a pension plan for horses. This is what I want. It's what the family, my wife (Elfriede), and my son (Andrew) want. We are united. I hope we can convince Belinda. I hope."

Stronach said he was willing to make adjustments in the proposed racing charter and expressed an interest in having a representative from an animal rights group among the trustees.

"My interest is, 'Can we bring racing to a higher level?' Horses render a great service to mankind. Where would we be without them, especially in America? The racing charter would contain a minimum of at least three weeks of rest for a horse twice a year. The horse has rights that will be in the racing charter," he said. "There are a lot of animal rights groups, and rightfully so. I have no problem with them. On the board we would invite a person from an animal rights organization because we have no secrets. We love horses. We want to make sure they are properly treated and make sure they do not wind up in a slaughter house. We want to focus on that."

Stronach also said he was in favor of keeping Pimlico open. 

At the present time during a 12-day spring meet, the crumbling facility is in disrepair. TSG has showed little interest in racing at the Baltimore racetrack and has devoted considerable resources toward improvements at Laurel, which is located about 30 miles south of Baltimore.

Nearly 7,000 seats in the grandstand were unavailable for the Preakness because the structure was found to be unsafe, forcing that section of the building to be covered by a long, black tarp with "Preakness 144" written on it. Beyond that, because of a water main break several days earlier, finding running water inside the facility was difficult on Preakness Day and several restrooms were shut down.

In addition, in March, Baltimore mayor Catherine Pugh, who resigned earlier this month, sued TSG in order to block the company from moving the Preakness to Laurel Park or using state bonds to finance improvements at Laurel. The suit also asked the court for ownership of the racetrack and the Preakness through condemnation of the property.

"You always want to give people choices. Management says we want to have the track at Laurel, never mind here at Pimlico. I say, look, I have plans which would totally revamp this area here (at Pimlico) and totally revamp Laurel," Stronach said. 

Part of his plans for Pimlico would call for redevelopment of the surrounding neighborhood and the establishment of an urban farm to generate jobs and income through the harvesting of crops.

"The inner cities have a big problem with poverty and money won't fix it. Only meaningful jobs. I had a plan to build the world's most advanced urban farm here. We could have given hundreds of people meaningful jobs. Do people get fresh produce? We could supply all of Baltimore with fresh produce. We could work with the agriculture department of universities and have produce free of chemicals. But I have another plan, too, so let the people decide what's good for Maryland. The other plan is revamp everything here and the surrounding area as well," he said. "When I bought Pimlico I looked around and I told my management I want to meet the people in the neighborhood here. I met them and pointed out a rundown, abandoned school and I told them if they wanted, I would build them the most technical trade school. They were skeptical. Two years later when we opened it up, there were tears in their eyes.

"Now what I want to tell them is that when we build the urban farm, the neighborhood would own 20 percent of it. I want to have the young people say this is the nicest and safest place to go anywhere in the world. That's my objective here. I want to stay here."

Frank Stronach also wants to stay involved in racing, and not just from the sidelines.

"Racing and horses mean a lot to me. I want to do my part," he said.