G. Michael Finnigan
Company: Hollywood Park Inc.
Position: CFO and President
Born: Porcupine, Ontario; 1948
Education: McMaster University in Hamilton, Ontario. B.A in economics and an M.B.A.
Hobbies: family, sports, recreation and reading
Most Admired Person: His father, Gordon Finnigan.
Personal: Married, four children.
By JOE BEL BRUNO
Staff Reporter
G. Michael Finnigan’s role at Hollywood Park Inc. is more than just making sure the race track pulls in fans each year.
In fact, horse racing has become second on the list of priorities. Finnigan is leading the company through a major expansion as Hollywood Park attempts to diversify into casinos and other ventures.
In the past five years, Hollywood Park has built a casino, made alliances with American Indian gaming halls and pursued a professional sports franchise to locate on the company’s Inglewood property. The biggest boost came earlier this year when Hollywood Park bought Boomtown Inc., which owns casinos in the Mississipi Delta and Reno.
Finnigan came to Hollywood Park as chief financial officer in 1989. One year later, race course magnate R.D. Hubbard launched a bitter takeover battle for control of the company.
When it was over, Hubbard ousted Marje Everett as chief executive officer and proceeded to clean house. Finnigan, who said he kept a low profile during the bitter proxy fight, was one of only a handful of managers who stayed on after the transition.
Finnigan who also serves as chairman of the Southern California Special Olympics and Centinela Hospital recently spoke to the Business Journal about his vision for the company.
Question: Is the horse racing industry a business that’s on the decline?
Answer: Generally speaking, the business is expanding rapidly off-track and at a slight reduction on-track. That’s the major trend. It means we operate a solid and mature business that generates a lot of cash, but won’t likely grow much in the future. That’s why this company’s board has determined it wants to get into other opportunities as a gaming, sports and entertainment company.
Q: Will that include a takeover of your competition, Santa Anita?
A: We have not entered into any discussions with Santa Anita, though this has been a subject that has been discussed for many years now. Right now, we’re interested in a consolidation not a merger of the companies. This could be something like a joint-venture between the two companies, where ultimately one facility would be closed down and developed into something else.
Q: How does the recent acquisition of Boomtown bolster Hollywood Park’s finances?
A: It brings three properties Biloxi, Reno and New Orleans into our business that are solid earners. Their cash flow is strong, and they are both highly profitable. Obviously, it expands us into other markets in other portions of the country. We’ve become more diversified because of this.
Q: Do you see any conflicts of interest in owning casinos where gamblers might be wagering on horse races going on at a Hubbard-owned race course?
A: You’re talking about an industry that is heavily regulated. We’re looked at by Nevada authorities who have determined there is no conflict of interest. There are very stringent guidelines that we must follow and obviously we are following them.
Q: What is the newest opportunity Hollywood Park is pursuing?
A: We want to restore what is fondly referred to as the paired-share REIT structure. There are only five of them grandfathered under the IRS, and we’re one of those. Hollywood Park elected to not be taxed as a Real Estate Investment Trust in 1992, but because this structure had become so valued by the marketplace, we’re looking to restore it. The easiest way to describe it is two companies a REIT that holds the land and building and an operating company enter into an agreement. The REIT leases the land and buildings to the operating company; the operating company pays over much of its profits in the form of a lease to the REIT; and the REIT passes that income to the stockholders tax free.
Q: When do you expect this to happen?
A: We hope to get this voted on by the stockholders sometime in the fourth quarter. This is something that has already attracted investors like Apollo Co., which filed a 13-B for 5 percent stake in the company. It is the potential of this paired-share REIT that is causing the interest.
Q: Have you given up hope of getting a professional football or basketball team to locate on the Hollywood Park grounds?
A: We’ve had extended discussions with the Lakers and Kings before they decided to move downtown. We continue to have discussions with Clippers owner Don Sterling. And we continue to have talks with the NFL after negotiations with Al Davis to move the Raiders here broke down years ago. Football at the moment seems to be our best chance. The NFL has not made a decision on this point, and right now we’re just waiting and showing them our continued interest.
Q: What if you don’t get an arena or stadium?
A: This property is 378 acres a massive piece of developable property located three miles from Los Angeles International Airport. We have proposals every month or so for major developments here if neither the stadium or the arena comes to fruition. We also have an improved environmental impact report that allows us to build a power center one of those big bucks retail centers.
Q: Will you move to buy the Forum once the Lakers and Kings go downtown?
A: That was part of the proposal when we were discussing building a new arena for them here. It is not out of the question that we might be a buyer for that property under the right circumstances. Previously, the price was too high but we expect it may go lower once the teams move to Los Angeles.
Q: During Hubbard’s proxy battle five years ago, did you feel your job was threatened?
A: Mr. Hubbard, of course, was involved in a bitter proxy battle in 1990, and it culminated in early 1991. There was a change in the chairman and CEO of the company, as well as many of the board members. I expected to leave after the change, but Mr. Hubbard is a very pragmatic and solid businessman. He is certainly the best that I have worked with. We decided to give each other six months after the merger to see how things worked out. And I’m delighted that I stayed, and hope he has the same opinion of me.
Q: Five years after the proxy battle, what is the company’s mission?
A: Like any company, we’re looking to expand and attract new audiences. We’re looking for new ways to expand Hollywood Park. At the same time, we have been making deals and buying out other companies (like Boomtown) throughout the rest of the nation. We’re not just a company that runs a race track.
