Stronach Group will rely entirely on cash flow the tracks generate

Jul 4, 2011 7:21 PM

One criticism of industrialist Frank Stronach’s operation of bankrupt Magna Entertainment Corp., a company he founded, was that in acquiring a dozen North American racetracks he didn’t hesitate to spend other people’s money.

That won’t be the case with the Stronach Group, the company that will operate Santa Anita and Gulfstream racetracks, as well as the Maryland Jockey Club, owners of Pimlico and Laurel.

Stronach sold an estimate $850 million of stock in the Canadian auto-parts company that he founded and which became a major source of his wealth. The sale was made to provide capital for the new privately-owned Stronach Group.

The company, with hands-on operator Greg Avioli, is set to rely entirely on what ever cash flow the tracks generate for its operation.