One track too many?

SANTA ANITA UP FOR SALE AMID MIXED OUTLOOK FOR L.A. RACING

News that Santa Anita Park racetrack is once again up for sale has rekindled an old question - can L.A. support two horse racing facilities?

The consensus among racing-industry insiders is that there remains room for both Santa Anita in Arcadia and Hollywood Park in Inglewood - at least for now. To support that assertion they point out that:

* Gambling on horse races, both at on-site and off-site locations, remains strong, making it likely that the tracks will continue to be profitable.

* Even though the tracks' profits have dwindled, they still have the ability to attract visitors to adjacent facilities, such as shopping malls and casinos. (Santa Anita owns a 50 percent stake in the adjacent Santa Anita Fashion Park mall and Hollywood Park owns and operates a card club on its racetrack property.)

* Los Angeles is big enough and the two sites far enough apart to attract distinctly different crowds.

"If one or the other was gone, imagine getting from the Westside to Arcadia," said Rick Baedeker, senior vice president of marketing for the National Thoroughbred Racing Association, which was formed last year to help market the sport.

Even so, speculation about the future of the two tracks picked up last week on word that Meditrust, a Massachusetts-based real estate investment trust that took over Santa Anita Cos. last November, is now trying to sell the track. A group of investors led by Meditrust Chairman William Baker is said to be a leading contender to buy the facility.

Meditrust and Santa Anita officials declined to comment.

Hollywood Park also in recent weeks made a bid for Santa Anita, but it was rejected. Hollywood Park officials gave no indication whether they would make a second offer.

Anthony Gerstein, an analyst at Bear Stearns & Co. in New York, said such a deal would make sense. "A play for Santa Anita by Hollywood Park would be a clever one," he said. "If they succeed in getting it, Hollywood Park would have a lock on racing in Los Angeles."

He doubted that Hollywood Park Chairman R.D. Hubbard has any intention of shutting down Santa Anita because "racing is his passion."

The aggregate amount of money bet on the races held at Hollywood Park and Santa Anita has climbed dramatically in recent years. Most of that growth has come from out of state, however, through the live satellite transmission of local races to casinos in Las Vegas, Atlantic City and Louisiana - as well as transmissions to other racetracks.

Such growth has been vital, as the tracks get about a 4 percent cut of the gross of those off-site bets. The rise in off-site betting has helped partially offset the drop-off in revenues resulting from dwindling track attendance.

In 1997, racing at Hollywood Park generated $68.8 million in revenue, down from $78.7 million in 1994. Expenses over the period remained constant at around $30 million.

While both tracks' financial performance has slipped, they are still operating well into the black. "Both tracks make money every day they are open," said Dick Gonzalez of the California Horse Racing Board in Sacramento.

Looking ahead, however, the key to the future of both racetracks is attracting a younger audience.

"Los Angeles has so many other forms of entertainment and sports," said David Carter, a sports marketing consultant and USC business professor. "And racing plays to an older, shrinking demographic."

Santa Anita's marketing effort is relying heavily on its extensive database on visitors to its track, said Craig Dado, vice president of marketing. The track collects information on its visitors' tastes and habits, and then targets its direct-mail campaign to similar people.

Hollywood Park's marketing emphasizes its Friday-night races, for which the entrance fee is $1 for customers under 30. The track also offers $1 beers, along with live rock music.

"They have to go to a broader base, get younger people, and they have to make racing understandable," said John Van de Kamp, president of the Thoroughbred Owners of California. "We'd like to see (Santa Anita) remain open and get to a new level."

Keith Chamblin, vice president of marketing for Hollywood Park, said the results of its campaign could take a few more years to bear fruit.

"It is a very competitive environment for the sports-gambling dollar," he said. "There has been a general decline in on-track wagering, and I think that trend will continue for a couple more years before we see a rejuvenation as younger people are introduced to the sport."

Both tracks are also eyeing their surrounding real estate for profit-producing potential.

Meditrust's plans for a $60 million, 500,000-square-foot retail center and multiplex theater adjacent to its track are pending with the city of Arcadia. Hollywood Park is also pursuing plans for a retail complex near its track.

Also supporting the two local tracks' efforts this year has been a national marketing and advertising campaign by the industry association and increased television coverage of the sport.

"What has happened in the horse racing business is, we've probably hit bottom. The question is, how far back up we can pull it?" Van de Kamp said.

Not everyone is so sure.

"Probably, eventually, you could get a consensus that you'll see one major track in San Francisco instead of two, and one major one in L.A. instead of two. I think that's the eventual resolution," said Ed Friendly, who serves on the boards of the Thoroughbred Owners of California and the national association.

Having two tracks in one area is a "terribly inefficient" use of personnel and real estate, he said: "Look at how many acres are involved in each hack, and they're used a third of the year and dormant the rest."