Saturday Sept 3, 2011
Bond holders agree to a four month extension on the $538,000 payment due this past Thursday.
So class, why did the bond holders agree to do this? Because if they foreclose at this point they still won't get paid and it is clear the present operating business plan does not work. The horse race track simply does not make money.
Now the strategy is to convince some Las Vegas casino operators (who are not in the best shape themselves) to buy into the track. This would give the track some funds while they attempt to persuade state legislators to allow slot machine and or table stakes gambling. The latter seems a very long shot to me.
As I said in class, this is the same predicament that the Atlantis Resorts in the Bahamas and Dubai are experiencing. Cash flow will not support operations much less cover debt service. An entirely new plan needs to be adopted. But frankly, I don't see much light at the end of this tunnel.
These two examples demonstrate my point that the economy will re visit the March 2009 lows in the stock market because both business and governments are overloaded with debt.
I see no way out for Retama. Racetracks are a thing of the past. Gamblers today aren't going to go through the trouble of researching a horse's history (at least not gamblers in and around San Antonio). Gamblers here might flock to slot machines and card tables, but I don't think Las Vegas would be happy with that. Even so, I don't see four months as long enough to come up with a solution. The bond holders are sunk.
Posted by: Luis Martinez | September 03, 2011 at 12:20 PM
The bond holders extended this because they of course want to get paid. This bail out they are waiting for is highly unlikely. This is one idea that looked good on paper but in reality was a very poor investment. I do not see anyone being the savior in this and Retama Park will be closed like many others throughout Texas
Posted by: Javier Carvajal | September 05, 2011 at 12:49 PM
Javier
Okay so you think it is toes up for Retama
Now never mind that, what do we do with the track in the future, think forward not rear view mirror
Posted by: Dennis Elam | September 05, 2011 at 04:12 PM
The reason the bond holders agree to extend this one payment is because they would probably get zero dollars. It reminds me of a movie called "It’s a Wonderful Life." In the movie George the small town owner of the Savings and Loans had a calm head when the Great Depression came to the small town. It is good that these bond holders agreed to extend this one payment. But, I wonder how many times the bond holders will give Retama this break, before the bond holders start to take legal action.
Posted by: Phillip Garcia | September 05, 2011 at 07:49 PM
I live near the Retama and I have never ever seen it packed or even half full of cars or people. There is no survival for them. I hope the employees have already found new jobs, including the jockies. I have been the once and it was not near as exciting as I anticipated.
Posted by: Dustin Yaklin | September 11, 2011 at 03:21 PM