By Bill Finley
First things first. Let’s all take a deep breath. There will still be racing at Santa Anita, Gulfstream and Laurel Saturday and The Stronach Group (TSG) isn’t going anywhere.
Yes, Frank Stronach, 86, has sued his daughter, Belinda, in an effort to retake control of The Stronach Group. He is alleging that Belinda and TSG Chief Executive Alon Ossip have pulled a power play and have kicked him to the curb.
The 73-page lawsuit that was filed by Frank Stronach in a Toronto court and first obtained by the TDN reveals a messy story filled with accusations against Belinda and Ossip claiming there was…”a series of unlawful actions undertaken by Belinda, together with Alon and others associated with them, to appropriate Stronach family assets for their own personal benefits.” What makes this even uglier, and sadder, is that this is a fight between father and daughter.
Let’s hope there is a reconciliation and an outcome that is satisfactory to both Stronachs and that they can resume a peaceful business and personal relationship.
But for the horse racing industry, that is of secondary importance. The Stronach Group owns six racetracks (Laurel, Pimlico, Santa Anita, Gulfstream, Portland Meadows and Golden Gate Fields), the Xpressbet ADW, AmTote and dozens of other racing related companies. Additionally, TSG is a company that cares about horse racing and is devoted to securing its future. In an age where so many tracks are run by corporations where the casinos come first, that’s no small thing.
It’s no exaggeration to say that TSG is the single most important company in the sport and the industry desperately needs a healthy Stronach Group, a healthy Santa Anita, a healthy Gulfstream. Now it is hamstrung by a lawsuit. I don’t think it is going to happen, but if Stronach vs. Stronach causes TSG to implode, well, there’s no need to tell you how bad that would be for the sport.
So what does this lawsuit mean for horse racing and the future of TSG? Unfortunately, nobody really knows. That’s what’s so scary about this.
We know Frank’s side of the story because it’s all there in a lawsuit, but no one has heard from Belinda. That’s important because we only have one side of the story and, therefore, an incomplete picture of what is really going on behind the scenes of The Stronach Group.
So far, though, at least from the outside, it doesn’t appear that much has changed since Frank left for Austria in 2013 to run for public office and handed Belinda the keys to his empire. Though his party was voted in, he did an about-face and returned to the TSG offices in Toronto in 2014 and, according to the lawsuit, believed everything would be back to normal, that he would be in charge. In the lawsuit, he alleges that his daughter and Ossip pulled off a coup, remained in control and stripped Frank of most of his power.
If that is indeed the case, then Belinda, and not Frank Stronach, has actually been running the company since 2013. What has changed? From the outside, really, nothing other than the creation of the GI Pegasus World Cup, which most people believe has been a good thing for the industry. No tracks or major assets have been sold. No prominent executives have been fired. The racing at Gulfstream has never been better and they have taken summer racing in South Florida, which was once as dead as it gets, and turned it into a simulcasting juggernaut. That is nothing short of a miracle.
Well before the lawsuit surfaced, some believed that once her father passed away, Belinda would shut down and sell some of the company’s tracks, particularly Santa Anita. The land they sit on is extremely valuable, so from a pure business standpoint, selling would be the right call. There was also the fear that she didn’t share her father’s love for the sport, which exacerbated the rumors that she was eager to sell off assets.
The most notable difference between Belinda’s running of TSG versus Frank’s is that she has a flair for the extravagant, even more so than her father, which is saying something. For the initial Pegasus World Cup, she hired UFC superstar Conor McGregor to help promote the race. In the past, the entertainment in the Preakness infield was usually someone you never heard of. This year it was another major star, rapper Post Malone. These guys don’t work cheap.
None of which means all is rosy within the Stronach world. The allegations in the lawsuit brought to light some problems that are going to hamper the company going forward.
According to the lawsuit, TSG is experiencing serious liquidity problems. We don’t know the state of TSG’s financial health, but when Frank Stronach says there is a serious liquidity problem and it would appear that solving that problem would be difficult, well, that is indeed something that could cause chaos.
This can’t be an easy time either for TSG’s top executives. Do they take orders from Frank or from Belinda? If Frank tells them to do something and Belinda tells them to do the opposite, what do they do and how do they avoid getting fired?
I don’t know Belinda Stronach, have never met her or talked to her. With Frank, I have long ago formed an opinion. This is a man who loves horse racing and is devoted to seeing that it not only survives, but prospers well into the future. He must know that the internal Stronach squabble has the potential to do great damage to the sport. He can’t let that happen.
There’s only one solution. Father and daughter need to get together in a room, make nice and not leave until they have reached an amicable compromise that is good not only for TSG but, more importantly, good for horse racing.