There's no such thing as free trade. Did you ever play
marbles in the schoolyard? I played once against this
big guy and won the marbles and he said, "Don't you know
the latest rules?" I was a smart kid and I gave the marbles
back. That's how free trade works. The biggest guy wins.
I prefer fair trade.

--Frank Stronach, in Belinda: The Political and Private Life of Belinda Stronach


LOS ANGELES, May 25, 2010--Dennis Mills, leaving the recent meeting of the California Horse Racing Board, was heard saying to a colleague, "I thought that went pretty well."

From what I've heard about that meeting, I wonder what Mills would have said after Little Bighorn. Something like, "I thought that went pretty well, as long as you're not Custer."

Prior to the racing board meeting, there was an erroneous report that Mills, CEO of Magna International Developments, would be a no-show. "Something about not being able to find a good fit in a suit of armor," one wag said. Other than Frank Stronach, Mills is the biggest face on the company that has short-circuited the Oak Tree Racing Association, the charity-minded not-for-profit that's been running a race meet, including the hosting of five Breeders' Cups, since 1969. Smug Ph.D. candidates at the Wharton School for business might have said, "Well done, Frank," after Magna took advantage of a bankruptcy loophole, but it can be safely said that in a California popularity poll of Austrian nationals, even Arnold Schwarzenegger would finish higher.

If I didn't know better, I would suggest that the Mills before the racing board was really Stronach in a rubber mask. Mills reiterated the Stronach claptrap about the California racing model being broken, before Keith Brackpool, the no-nonsense board chairman, reminded the Magna henchman that "none of the things (Stronach) talked about (at Santa Anita) ever happened." David Israel, another of the commissioners, cut to the quick when he said: "There are a lot of things about California racing that need fixing, but Oak Tree isn't one of them."

A few days before the board meeting, I spoke with Sherwood Chillingworth, the normally upbeat vice president of Oak Tree. "I always thought we were the good guys," he said solemnly. "There's something wrong with a system that allows a business (Magna) to fail in so many areas, ruin so much of its equity, and then still wind up with Santa Anita, Gulfstream Park and the Preakness and Pimlico at the end."

Chillingworth has too much class to really unload on Stronach, and besides there's always the last-gasp chance that Oak Tree might re-emerge under a new lease with Magna. The racing board re-established Oak Tree's fall dates, and said it could run them wherever in California it could make a reasonable deal. What the board really said was that if Stronach didn't make peace with Chillingworth, there would be no fall racing under anybody's auspices at Santa Anita.

Under the cancelled lease, which was to run until 2016, Oak Tree turned over 75% of its profits to Santa Anita, a figure that amounted to $4 million in many years. Oak Tree also contributed $3 million to Santa Anita's synthetic-track kitty, then watched one failed experiment after another run up a bill that cost Stronach about $25 million. To stay at Santa Anita, Oak Tree was asked to loan $10 million to MID, mostly for yet another new surface, and MID wouldn't have to pay on the principal for two years. Other new wrinkles would have required Oak Tree to pay heavily for capital improvements (such as those rat-infested barns that Stronach kept promising to replace), and sacrifice revenue of approximately $1 million if it hosted the Breeders' Cup again. In other words, Stronach gave Chillingingworth an offer that he couldn't approve.

A few days before the racing board meeting, Ron Charles, the president of Santa Anita, flew to Toronto to tell Stronach that he had had enough. In Don Martin's book about Stronach's daughter Belinda, he quoted a former Stronach executive who said, "If you last two to five years, you've done well. Surviving is like dog years, it's seven for every one for humans." The five years Charles lasted must have seemed like 35.

May may have gone out like a lion in California, and June is expected to come in the same way. Early in the month, Mills said, his side and Oak Tree will talk again about a lease, but even without Oak Tree, Stronach's Santa Anita and Golden Gate Fields account for more than half the thoroughbred dates in the state, and that spells leverage. I can't really see the racing board revisiting the rule that says the same company can't run two tracks. If it does, Stronach just might close down Golden Gate, which could have been part of his grand plan all along. The next racing board meeting is June 24, at Hollywood Park. Stronach is expected to be there. Tickets go on sale soon.