Archive for the ‘Churchill Downs Inc.’ Category

By Ray Paulick
Those who think all the “suits” in racing’s ivory towers know nothing about the people who put on the show at racetracks across the country should talk with Churchill Downs Inc.’s chief operating officer Bill Carstanjen. He had a crash course for 10 days last September working incognito alongside employees on the front and backside of Churchill Downs, Arlington Park and Calder, and the experience was enlightening if not life-changing.

Carstanjen played the starring role in the new CBS television series “Undercover Boss,” which puts executives at major companies alongside front-line workers.

“Each week a different executive will leave the comfort of their corner office for an undercover mission to examine the inner workings of their company,” the reality show’s website explains. “While working alongside their employees, they will see the effects their decisions have on others, where the problems lie within their organization and get an up-close look at both the good and the bad while discovering the unsung heroes who make their company run.”

Other companies profiled so far include Waste Management, 7-Eleven, White Castle, and Hooters.

The episode featuring Carstanjen and Churchill Downs Inc. employees is scheduled to air at 9 p.m. (eastern) March 14. Click here to see a preview.

Originally, CBS tried to get CDI’s chief executive officer Bob Evans to go undercover, but he was convinced too many employees would recognize him and his cover would be blown. Too bad: the Paulick Report has learned Evans has plenty of experience toiling in the trenches, reportedly helping pay his way through college by working as a janitor for the local school district.

Carstanjen disguised his look, replacing glasses with contact lenses and growing a scruffy beard on his jaw. Cameras followed him around through various jobs—as part of the clean-up crew on the front side, mucking stalls in the stable area, shadowing the track’s outrider, working with a jockey valet, and even the bugler for the call to the post.

Employees were told someone hoping to land an entry-level position was being documented by a film crew. “They thought he was an unemployed schmo trying out some entry-level jobs,” said Julie Koenig-Loignon, CDI’s vice president of brand development and marketing. “They were giving him a trial run as much as anything.”

Carstanjen didn’t just pose for the cameras. He was put to work alongside CDI employees.

“There are some very high pressure jobs in horse racing where you’ve got to keep up,” Koenig-Loignon said. “Bill definitely got put to the stress test. There was also some down time spent with employees. In some cases, he got to understand more about their families, along with personal and professional challenges.”

Carstanjen learned a lot more than how to much out a stall or clean a urinal.

“The best part of the 10-day voyage into the workings of the company was seeing and feeling the passion and dedication of the employees,” Carstanjen said. “Being undercover meant the people I was working side by side with, could speak frankly about their work.  They could freely speak about their personal sacrifice, health issues and time management, all while showing up every day for work with the same attitudes so many of us feel for this business—the passion, dedication and drive to get more fans to love the sport as much as we do. 

“For me, it was a lifetime experience.  There was a lot of enjoyment in experiencing the fun and passion without the corner office pressure, which focuses on the problems.”

Did he learn any lessons about how corporations like Churchill Downs can better connect with their employees?

“I could see all the things we’re doing right and all that we’re doing wrong and one takeaway and initiative will be to have a ‘Walk a mile in the other people’s shoes day’ at Churchill Downs Incorporated properties.  Not forgetting about safety or security, we plan to have people switch roles to really appreciate and teach everyone from the front side to the backside, what it takes to run a racetrack operation.”

The show’s preview indicates there are some emotional moments between Carstanjen and those he worked alongside.

“There are so many moments we worked and lived through,” he said. “I performed many different jobs and I don’t know what is in the final film; that is part of the arrangement with CBS.  I can tell you there are moments of joy, pride, and a whole lot of humble moments.  I truly did very few of the jobs very well.

“Probably the most raw, emotional moment was when we revealed who I was.  I really can’t say anymore, other than to tune in with us on March 14.”

Carstanjen plans to be with some of his family and Churchill Downs team members at the track on the night of March 14 “so we can all watch for the first time together and have a good laugh at my expense.”

Copyright © 2010, The Paulick Report

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Jennie Rees of the Courier-Journal makes the case to bring Drew Brees, Super Bowl Champion and MVP for the New Orleans Saints, to Louisville for the Kentucky Derby. She rightly states that he would be a perfect grand marshall for the Kentucky Derby Festival’s Pegasus Parade and smart addition for the Barnstable Brown party.

Owning a piece of racehorse Daddy Forty Niner, Brees has proven himself a fan of the sport and would make headlines across the country for being so heavily involved in racing’s biggest day. It’s a strong play and the type of pop culture melding our industry desperately needs.

Read it at the Courier-Journal

Then come back to the Paulick Report and let us know what you think

- Bradford Cummings

In the third annual ‘Best of’ voting, Zenyatta took the prize as best horse, Calvin Borel won as best jockey and Churchill Downs received accolades for their foray into night racing.

Click here to read the entire article and tell us where you stand. But beware, 3,797 online voters can’t be wrong…or can they?

- Bradford Cummings

ONLINE KENTUCKY DERBY, OAKS TICKET SALE
RESCHEDULED FOR WEDNESDAY, JAN. 6 AT 12 P.M. EST

Churchill Downs’ online sale of limited two-day Kentucky Derby and Kentucky Oaks ticket packages, which was delayed Wednesday by a potential data error with its new online box office, has been rescheduled for Wednesday, Jan. 6 at noon EST. A total of 3,000 seats have been allocated for this online exclusive at http://tickets.churchilldowns.com.
 
“Our concern regarding a potential data error that temporarily delayed our online sale of Kentucky Derby and Oaks tickets has been erased, and we’re pleased to announce that those coveted tickets will go on sale shortly after the holidays on Wednesday, Jan. 6 at noon,” Churchill Downs Racetrack President Kevin Flanery said. “The customer experience with this first-of-its-kind online offering is paramount, and we truly appreciate our patrons’ patience as we worked through this process.”
 
As promised, reserved seating packages to be sold, which include tickets to both the Kentucky Oaks on Friday, April 30 and Kentucky Derby Presented by Yum! Brands on Saturday, May 1, include:
 

• Third-floor clubhouse box seats in sections 312-314 and access to the Secretariat Lounge, an exclusive, upscale, indoor hospitality area that will feature premium gourmet food, an open bar, televisions, betting kiosks and live music between races (50 boxes or 300 seats which range from $6,132-$6,390 per six-seat box);
• First-floor clubhouse box seats in section 111 (166 boxes or 996 seats which cost $1,500 per six-seat box);
• Second-floor grandstand bleacher seats in sections 222-225 (300 seats which range from $214-$225 per seat); and
• First-floor grandstand bleacher seats in sections 121-128 (1,404 seats which range from $172-$207 per seat).
  

Ticket prices vary based on location. There is a purchase limit of six seats or one box per order. Those who want to purchase box seats must purchase the entire box, which includes seats for six. Tickets must be purchased with a Visa credit or debit card. Minimal ticket processing charges will apply.
 
This offer is exclusive to http://tickets.churchilldowns.com; no sales will be made in person or by submitting letters, e-mail or telephone calls to Churchill Downs.
 
Already available for purchase on the Website are advance general admission tickets to the Kentucky Derby and Kentucky Oaks, which cost $40 and $25, respectively, as well as reserved seat packages to other 2010 events, including six “Downs After Dark” nighttime racing events scheduled for June 11, June 18, June 25, July 2, Oct. 31 and Nov. 19.
 
Churchill Downs, the world’s most legendary racetrack, has conducted Thoroughbred racing and presented America’s greatest race, the Kentucky Derby, continuously since 1875. Located in Louisville, the flagship racetrack of Churchill Downs Incorporated (NASDAQ Global Select Market: CHDN) also operates Trackside at Churchill Downs, which offers year-round simulcast wagering at the historic track. Churchill Downs will host the 136th running of the Kentucky Derby Presented by Yum! Brands on Saturday, May 1 and the Kentucky Oaks on Friday, April 30. The track will conduct its 2010 Spring Meet from Saturday, April 24 through Sunday, July 5. Churchill Downs is scheduled to host the Breeders’ Cup World Championships for a record seventh time on Nov. 5 and 6, 2010. Churchill Downs tickets are available at tickets.churchilldowns.com or by calling (502) 636-4400. Additional information about Churchill Downs can be found on the Internet at www.churchilldowns.com.

That darn technology! Churchill Downs Inc., the Louisville, Ky., racetrack company with the world’s most legendeary propeller heads, had to postpone the start of online ticket sales to the 2010 Kentucky Oaks and Derby due to, you guessed it, technology glitches at its new online box office. Can anyone say "Stub Hub"?

Following is the press release distributed by CDI late Wednesday morning, just minutes before the online sales were supposed to begin.  – Paulick Report

• Third-floor clubhouse box seats in sections 312-314 and access to the Secretariat Lounge, an exclusive, upscale, indoor hospitality area that will feature premium gourmet food, an open bar, televisions, betting kiosks and live music between races (50 boxes or 300 seats which range from $6,132-$6,390 per six-seat box);
• First-floor clubhouse box seats in section 111 (166 boxes or 996 seats which cost $1,500 per six-seat box);
• Second-floor grandstand bleacher seats in sections 222-225 (300 seats which range from $214-$225 per seat); and
• First-floor grandstand bleacher seats in sections 121-128 (1,404 seats which range from $172-$207 per seat).

By Ray Paulick
A number of people I respect most in the Thoroughbred industry consider Churchill Downs Inc. CEO Bob Evans to be the smartest man in the racing business. Last week’s $126.8 million stock and cash acquisition of youbet.com, which also includes the totalizator company United Tote, only strengthens that assessment.

With the deal, which won’t close until sometime in the first half of 2010, CDI will own roughly half of the Advance Deposit Wagering market share. According to a presentation made by youbet.com at an investment bank conference last month (click here to read the presentation), youbet.com and TVG are the market leaders, with about 29% market share each, followed by the Churchill Downs-owned TwinSpires at 21% and Magna Entertainment’s XpressBet at 14%.

The current North American ADW market is roughly 14% of the $14 billion expected to be wagered on horse racing this year. It has been growing steadily, but not nearly as quickly as online transactions in other businesses such as event ticketing, travel, or music. It is widely viewed as the only current growth sector in racing. The growth of online wagering is in Evans’ sweet spot.

ADW wagers are also more profitable for a company like CDI than other types of bets, including those made on-track, especially when they are made at one of the tracks the company owns (Churchill Downs, Arlington Park, Calder, Fair Grounds).

So the acquisition of youbet.com looks very much like a win for CDI shareholders, because of the anticipated jump in both revenue and earnings, stemming from the bigger share of the ADW market and the reduced costs of personnel, marketing, technology, etc that Evans discussed in a conference call following the deal. It also gives the company a stronger technology platform than it has with TwinSpires. CDI’s purchase of AmericaTab from Bloodstock Research Information Services jump-started the company’s ADW business, which it was slow in developing. “I’ve been pretty impressed by the technology capabilities of the youbet organization,” Evans said in the Nov. 13 conference call.

The United Tote part of the deal makes sense, too. United Tote currently has contracts with Churchill Downs, Keeneland and the New York Racing Association tracks, but not with CDI-owned Arlington, Calder, Fair Grounds, 19 off-track betting parlors and TwinSpires—all of which use AmTote. Look for United Tote to pick up those contracts either as existing deals expire or buyout clauses are used.

There is the potential for pushback from some of United Tote’s current customers who might fear that Churchill Downs is becoming too powerful, but the upside to the ownership of United Tote far outweighs any downside.  Also, as Evans said, United Tote might be able to improve tote system stability, performance and wagering integrity. If that occurs, it’s good news for the entire industry and especially for horse players, who have serious concerns about the integrity and dependability of the current wagering systems.

Of course, there could be some losers in this deal. As CDI gains more market share with its ADW company, it will wield even more clout than it currently carries in contract negotiations with horsemen around the country through TrackNet Media, which negotiates its simulcast contracts with wagering outlets. That could reduce purse revenues from ADW wagers even more than the already-too-low levels that currently exist.

The other obvious losers will be some employees at either TwinSpires or youbet.com, but that’s pretty standard in corporate mergers and acquisitions. There will be plenty of corporate carnage, either at the youbet.com offices in Woodland Hills, Calif., at CDI’s Louisville, Ky., headquarters or its Silicon Valley “digital think tank.”

One of the unanswered questions of Churchill’s acquisition is whether youbet.com will continue to operate in “gray” states where Advance Deposit Wagering is neither expressly legal or illegal and if TwinSpires will move into those states. In the past, youbet.com recruited customers in states where other ADW companies, including TVG and TwinSpires, did not conduct business.

One final note about the deal. Youbet.com executive chairman Michael Brodsky will join the CDI board of directors, a move that some insiders greeted with a yawn. Neither Brodsky or youbet.com’s largest shareholder, Hyatt Hotel mogul Jay Pritzker, were viewed as visionaries in the online gaming world. They both held onto longshot hopes that youbet.com would somehow, with approval from Congress, be able to move into the sports betting or online casino gaming business.

When that didn’t happen, their energies shifted toward selling the company, something they managed to accomplish.

But it looks to me like CDI and Bob Evans got the better end of the deal.

Copyright © 2009, The Paulick Report

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By Ray Paulick
I’m not sure how often Kentucky’s Senate president, David “Blackjack” Williams of Burkesville, finds his way into Louisville, but I’ve got some good news for him when he does visit the home town of Churchill Downs and the Kentucky Derby.

During that same Rotary Club talk in early September, Williams said it wasn’t the people in his home district of Burkesville (population 1,756, located near the Tennessee border west of the Daniel Boone National Forest) he was trying to protect, that it was the citizens of Louisville. Yes, those same citizens who now are spending millions of dollars across the river in Indiana every year at places like the Horseshoe Casino. If Williams really wanted to protect them, he might consider blowing up the bridges that span the Ohio River separating Kentucky from Indiana.

On a related note, a few months ago, someone used the social networking site FACEBOOK to bring together people with a common interest, namely to "Get David Williams Out of the Kentucky Senate." There now are at least 1,800 members of this group who say they are "dedicated to defeating David Williams in any election from this day forward and taking any power that he now has in this state." Click here if you are interested in joining the group and supporting the cause.

Copyright © 2009, The Paulick Report

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By Ray Paulick
I’m not sure how I learned this little trick, but during my high school years in the late 1960s I had a transistor radio that fit perfectly into the cutout pages of a hard-cover book that I would dutifully carry into all of my classes each autumn afternoon when Major League’s Baseball’s World Series was under way. I’d plug an earpiece into the radio and run the wire up my shirtsleeve and into my ear, surreptitiously listening to the play-by-play accounts of the games as my teachers droned on about Herodotus or Themistocles.

That sneaky little maneuver ended in 1971. That was the year I graduated from high school, but it also marked the first time a World Series game was held at night, under lights. I didn’t understand then why the men who ran our national pastime were intent on ruining the game. Baseball was meant to be played in natural light, wasn’t it? Certainly, they would see the error of their ways.

I was overruled on that decision. In fact, as the years went on, more and more playoff and World Series games were played at night, and in fact the last day game for a World Series was more than 20 years ago. The reasoning was quite simple: more people watch television at night than during the daytime, even on weekends. Larger television audiences meant bigger rights fee for Major League Baseball.

So it goes with just about every other major sporting event, except perhaps tennis and golf (and the television networks have experimented with hosting golf tournaments under temporary lights). Nearly every major sporting event–from college football’s BCS Championship game and the NFL’s Super Bowl in January to the NCAA’s Final Four in March to the NBA Finals and World Series—have one thing in common: they are held at night to capture the largest possible television audience during what is known as “prime time.”

It’s about time horse racing started thinking like those other sports.

“Oh, but we’re different,” racing traditionalists will almost certainly say in protest to a transition to nighttime. “We can’t have the Kentucky Derby or Preakness or Belmont Stakes or Breeders’ Cup at night. We’ve never done that before.”

Well, guess what? That’s the way we’re heading with at least one of those events, and it’s the biggest one of all: the Kentucky Derby.

With Monday’s announcement that Churchill Downs is planning to install permanent lights, there is no question that a plan will soon be in place to hold the Kentucky Derby at night. And just like baseball’s World Series, years from now a few old-timers like me will rue about the good old days when the big race was held in the bright sunshine of afternoon.

Moving a race like the Derby from day to night isn’t quite as simple as shifting a baseball or football game, however. There is the not-so-small matter of wagering to consider. Horseplayers bet more than $150 million on the Kentucky Derby day card from Churchill Downs (more than two-thirds of that amount on the Derby itself), and they make the majority of those bets at other tracks around the country or at off-track betting facilities. What impact would moving the Derby to a nine or 10 p.m. starting time have on handle?

The ace up the sleeve to help Churchill Downs’ chief executive officer Bob Evans answer that question is account wagering. As more and more horseplayers wager legally by telephone or computer, it will be that much easier to envision a night-time Derby. In fact, how better to get new people to sign up for account wagering than to dangle that very proposition in front of them—many who might learn about it for the first time—during a prime-time telecast of racing’s marquee event?

Make no mistake about it, night racing is not a new thing. Harness racing programs have been held at night for as long as I can remember, and tracks like the Meadowlands in New Jersey have night-time Thoroughbred cards. Churchill Downs may have added some bells and whistles to its Friday night experiments last summer, but Hollywood Park and other tracks have been doing that for years.

The only thing missing from racing’s night-time schedule is a truly major event on prime-time television. And that could be just around the corner.

Copyright © 2009, The Paulick Report

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By Bradford Cummings
As the state of Kentucky continues to spit in the eye of the Thoroughbred industry, it is essential the power brokers and decision makers capitalize on the few openings available to improve our product and bring racing to the casual fan. And quite frankly, until this summer there seemed to be little outside of the usual steps taken to grow our sport. That is why Churchill Downs’ extremely successful Downs After Dark has been such a bright spot for the historic racing landmark.
 
Many racing fans chortle at calling nighttime racing at Churchill out of the box thinking. Night racing has been part of the sport of kings for years. But for those of you high-fallutin naysayers, the magic of those three nights this summer came out of an understanding that racing to the average fan is about more than what’s on the track. What few in this business grasp onto is this sport’s greatest advantage is also its greatest disadvantage, the long delays between races. What you do with that gap clearly defines the experience for the casual fan and proved to be the difference between a one-night flash in the pan and a successful budding enterprise.
 
The thought process behind Downs After Dark actually began in 2001 when permanent lighting was part of Churchill’s expansion plan. But after 9/11 and the popular concern that the economy would tank, the lights were cut from the funding package. But as they say, the dream never died and remained in the plans to explore down the road.
 
Fast forward to last year when the folks at CDI decided to revisit the idea of a nighttime extravaganza. Looking at their properties across the country, it seemed only logical to test market the concept with temporary lighting at their flagship track. But even in test mode, they had the foresight to know night racing alone would not expand their fan base over several nights.
 
“We asked ourselves, what can we do to trigger those fans that may have attended Derby and Oaks to come back,” said Darren Rogers, senior director of communications and media services.
 
With this mantra, Churchill set up an evening for people with a wide variety of interests. For those with more expensive tastes, options included everything from high-end dinners cooked by celebrity chefs to dinner and dancing packages complete with multi-course meals. And for those who were not so picky, happy hour pricing and live music all night long gave the track a nightlife feel and an air of excitement that in some ways was better than those historic first Saturdays in May.
 
And yet, after the first event, those in charge of the evening’s festivities found themselves conflicted on the night’s story. As Rogers told the Paulick Report, “We knew this could be something special. And we knew at the end of the night, we messed it up.” While attendance expectations ranged from 12,000 – 30,000, Rogers insisted they should have been better prepared and continued to take full responsibility for the shortcomings and long beverage lines.
 
But it’s not if a mistake is made that shows true colors, it’s how well you respond and clean up the mess. With those parameters in mind, Churchill taught us all a virtual master class in altering public opinion and turning lemons into lemonade.
 
They took out full page ads in both major Louisville newspapers apologizing for the mistakes and promising to make things better. They tripled their food and beverage staff, lowered ticket prices, offered dollar drinks and even had executives work behind the bars shelling out drinks and hot dogs to patrons.
 
And yet still, the question remained, “How much will the food and beverage blunders of the first week affect the second night?” The answer: not by much at all. The second night, exactly a week after the first, brought in only 388 fewer fans, proving they had effectively neutralized the bad word of mouth from the first night. Even better, the same magic was there from the week prior.
 
“Our original plan was to scale back the ancillaries the second night,” said Rogers. But they solidified after that night, Downs After Dark was as much about the nightlife as it was about the racing. “If you weren’t here, it is very difficult to explain to people,” said Rogers. And as most know, their reward for sticking with the concept was a record 33,481 fans on the final evening, the most for any Churchill Downs date not called Derby or Oaks.
 
While they are still going through the handle numbers for the three nights, the early returns prove the theory that night racing was about more than the horses on the track. While the first two nights were significantly above the average race day, attendance was nearly four times more than usual. And if you were judging Downs After Dark on handle alone, the third day of record attendance was a disaster, barely performing above the average for a day of 7,500. There are factors that help explain these numbers with Belmont’s twilight racing being the only action for bettors to play the first and second night and there being nothing accompanying the final night. But still it is abundantly clear that night racing at the Downs is not a night geared for the hardcore horseplayer.
 
When looking to the future, Rogers told the Paulick Report there was no option not on the table at this point. It is too soon to give hard numbers on the business figures, but they are clearly gearing up for another round of this extremely successful experiment by asking how to take the next step.
 
Will they install permanent lights? It’s certainly a possibility, although the cost is prohibitive and may delay a final decision. If you want to be of influence on this decision, Churchill is running a poll on their website and one lucky voter will receive a box seat for six at next year’s Derby. Of course, all decisions of this magnitude will have to be brought to the board of directors, but it would be difficult to believe there wouldn’t be support for more of the same success. When asked if a night Derby was on its way, Rogers said, “There are currently no serious discussions on the Derby being at night.” On the other hand, Rogers reiterated “There is no option that is not on the table at this point.”
 
Could Downs After Dark be the precursor to a primetime Derby that would benefit the sport with primetime ratings? Only time will tell. But one thing is for sure. Churchill Downs has stumbled upon a winner with this new format. It may not be a hit with the institutional gamblers, but if we are to grow this sport it is important we give the average fan what they want: to be entertained. We have a feeling Churchill will gladly plead guilty to that charge.