Magna Entertainment CP A (MECAD)

Ryan Worst — Brean Murray — Analyst

Good, thank you.

Operator

(OPERATOR INSTRUCTIONS). Anoop Prihar, JMP Securities.

Anoop Prihar — JMP Securities — Analyst

Just a couple of quick questions. Tom, on previous calls you talked about the potential of maybe doing a content distribution deal with a UK betting shop. I think of all the goals you outlined in '05 that was perhaps the one that we didn't sort of close the loop on. Can you give us a bit of an update there?

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Tom Hodgson — Magna Entertainment Corp. — President and CEO

From that perspective, I don't consider 2005 over yet.

Anoop Prihar — JMP Securities — Analyst

So it's still pending?

Tom Hodgson — Magna Entertainment Corp. — President and CEO

It's something we are continuing to work on, and stay tuned.

Anoop Prihar — JMP Securities — Analyst

With respect to the closing of The Meadows, I know you indicated earlier on in the call that everything was on track there. But from a timeline perspective, what's a reasonable expectation for that transaction to come to an end?

Tom Hodgson — Magna Entertainment Corp. — President and CEO

That is a tough one for us to answer with any precision because it's not really under our control. The critical condition is the granting of the gaming license. It was encouraging to see on Friday a report out of Pennsylvania quoting an official from the Rendell administration that the racetrack could have the spot license by June and be operating slot machines by September. There's no assurance that that will be the case. It's encouraging to hear it, and we're just working as diligently as we can to get it — get the deal closed as soon as possible.

Anoop Prihar — JMP Securities — Analyst

I noticed in the footnotes to the release there were two covenants, two separate covenants that we had that we were in breach of that were extended on both fronts, one with the parent company and one that looks like it was an arm's-length lender. How long are those waivers in place for, and how much sleep do you lose over these kinds of things?

Blake Tohana — Magna Entertainment Corp. — EVP and CFO

That waiver for was the covenant breach at December 31, 2005, and they're actually the same covenant under two different facilities. And our expectation is that we will be in compliance with those covenants during the remaining terms of the facility, based on our current budgets and forecasts.

Anoop Prihar — JMP Securities — Analyst

Last question and I will let someone else take it over. With respect to PariMax Tom, you guys outlined strategically what you hope to accomplish. Is there any sort of milestones that you can provide us with that we can look for in terms of being able to achieve between now and for the next 12 to 15 months?

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Tom Hodgson — Magna Entertainment Corp. — President and CEO

We don't give guidance with respect to MEC, and I don't propose to do so with respect to PariMax. We're going to be working very hard to achieve cost savings from integrating MagnaBet and XpressBet. We're going to be focusing significant energies on improving the financial performance of HRTV. I think probably the most sensible thing is that we just give you up-to-date reports on our quarterly conference calls of progress that's being made. As Joe said, we do believe PariMax can be significant profit contributor to MEC in the space of 18 to 24 months.

Anoop Prihar — JMP Securities — Analyst

Thank you.

Operator

Tim Rice, Rice Volker.

Ryan Worst — Brean Murray — Analyst

Okay, great, thank you.

Operator

Our next comes from the line of Anoop Prihar at GMP Securities. Please proceed.

Anoop Prihar — GMP Securities — Analyst

Morning, just a couple of questions. You indicated in the release this morning on The Meadows that the closing was subject to the granting of a license, what's your best guess as to timing there and who's paying for the license fee?

Tom Hodgson — Magna Entertainment Corp. — President and CEO

The purchaser will be putting up the license fee.

Anoop Prihar — GMP Securities — Analyst

Okay.

Tom Hodgson — Magna Entertainment Corp. — President and CEO

And our best guess would be late second quarter or — or third quarter of 2006.

Anoop Prihar — GMP Securities — Analyst

Okay. And just with respect to taxes, I know you talked about the NOL sheltering the sale of The Meadows. To date you've announced about $125 million in dispositions.

Tom Hodgson — Magna Entertainment Corp. — President and CEO

Right.

Anoop Prihar — GMP Securities — Analyst

Is it reasonable to assume that that 125 from a tax perspective can also be sheltered?

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Tom Hodgson — Magna Entertainment Corp. — President and CEO

I think the answer to that is pretty much —

Blake Tohana — Magna Entertainment Corp. — EVP, CFO

The — the answer to that Anoop is including — including the Palmetto's transactions and including The Meadows transaction that — that pretty much goes — would go through the — the tax losses at the end of — the end of this year.

Anoop Prihar — GMP Securities — Analyst

All right. That's what I wanted to hear. And just lastly the management fee that you anticipate collecting off of The Meadows, I know it's not going to come for a bit but order of magnitude, what — what would you put that number at?

Tom Hodgson — Magna Entertainment Corp. — President and CEO

If I forced me I would say it's going to be in the range of 1 million to 2 million a year.

Anoop Prihar — GMP Securities — Analyst

1 to 2 million a year?

Tom Hodgson — Magna Entertainment Corp. — President and CEO

Yes.

Anoop Prihar — GMP Securities — Analyst

Okay, great thank you.

Operator

And our next question comes from the line of Ryan Connelly at Star Banner News. Please proceed.