Posts Tagged ‘bob evans’

Whether you are for slots at racetracks or not, it is clear that the path to salvation for the racing industry will not ride on gaming alone. Long term, the industry will grow based on the ability of its leaders to think outside of the box and utilize some much-needed creativity. To that end, the executives at Churchill Downs led by CEO Bob Evans deserve a lot of credit for the overwhelming success for the implementation of Friday’s  first Downs After Dark, Churchill’s new series of night racing dates throughout the summer meet.

Excitement was clearly in the air as a younger than usual crowd filled the seats at Kentucky’s most famous track. At a somewhat controversial $10 a ticket, it is clear Friday night was a revenue generator in a struggling economy, proving that racetracks can draw a crowd if the product is marketed correctly. On a night that featured no major stakes races, one long shot Derby contender in Flying Pegasus and a top purse of $57,000, the feeling was more like the Kentucky Oaks than a typical weekday of American racing.

The beer lines were long, the betting windows overpopulated and it was a struggle to walk from one end to the other. It was as if the ’50s and ’60s heyday of racing returned for one night in 2009. A crowd of 28,011 was on hand.

"We had to park and walk like it was Oaks or Derby day," said Jeff Ratanapool, a mortgage broker at Century mortgage and semi-regular at Churchill. "It’s a great way to attract fans who don’t usually come to the track"

But the buzz at Churchill was different than those mainstays of American racing. It had a feel that only comes after 8 p.m. "It’s more like nightlife, a night on the town," added Blair Isham, a veteran of the Navy Special Forces turned real estate broker for a local real estate company. He indicated he was not a regular at the track by any means, typically only coming for the Kentucky Oaks each year. "I had to see what this was like. It’s exciting."

The Paulick Report also caught up with Derby winning jockey and local celebrity Calvin Borel after an unsuccessful ride on long shot Saltgrass Trail in the eighth race, a $5,000 claimer. "I think this is awesome!" he exclaimed. "This definitely compares to Oaks as far as the crowd is concerned. "Anything to help racing and bring in the fans is a good thing for racing."

Of course, this is a different schedule for the riders and horses alike. When asked if he thought the different hours affected his preparation, Borel shrugged off the suggestion. "It doesn’t affect my preparation. The only difference is I get to sleep in till 7 instead of getting up at 5." Did he feel any fatigue or body aches from a late night at the track? A simple "no" was his response.

But again, the real story was the enthusiasm of the crowd. Heading up to the press box, Pat Day ended up on the elevator ride with a mass of pleasantly lit fans exuberant about sharing the trip with a Hall of Fame jockey. As he left the ride, the still packed transport started rocking with the chant "Pat Day! Pat Day!" People were having a fantastic time and Churchill’s signature jockey was appropriately taking in the adulation.

Is this a flash in the pan or can the brain trust at Churchill maintain the nightlife atmosphere on June 26th and July 2nd that seems to have brought many non-traditional fans? Just like the question of Calvin’s possible Saturday afternoon fatigue, only time will tell.

Copyright © 2009, The Paulick Report

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By Ray Paulick

Random notes while waiting for the ice to melt …

The devastating snow and ice storm that hit Kentucky earlier this week has created serious economic hardships on Thoroughbred farms, many of which are without electricity and have suffered major damage, just as the foaling season is hitting full swing and the breeding season about to begin. Let’s hope organizations like the American Horse Council, the NTRA, Thoroughbred Owners and Breeders Association, the Kentucky Thoroughbred Association and the Kentucky Equine Education Project are in contact with government officials to seek relief, now that Gov. Steve Beshear has asked the Obama administration to declare a federal emergency.

Horse farms are already under extreme economic pressure because of the plunge in bloodstock prices, and this latest problem is only making things worse for them. It’s at times like these that these alphabet soup organizations can actually do some good.

DID FRANK STRONACH’S ONE-VOTE MARGIN over IEAH Stables in the Eclipse Awards outstanding owner category come by virtue of several racing secretaries who work for him? I have a great deal of respect for Stronach’s racing and breeding operation, which has produced solid numbers for many years now, but I just can’t fathom how 2008 was an Eclipse Award-winning year for him.  Ahmed Zayat’s stable earned slightly more money but only ranked sixth in the number of first-place votes. IEAH had a far superior year in terms of Grade 1 winners. George Strawbridge’s Augustin Stable had a better year when the number of starters was taken into consideration, as did the racing stables associated with Sheikh Mohammed. Here is the year-end ownership standings by money.

Apart from the National Turf Writers Association, which has historically published how its members vote, there is no disclosure from Daily Racing Form or the National Thoroughbred Racing Association about who votes – never mind who each individual votes for. But the NTRA should insist that racing secretaries or any other voters who work for racetracks owned by Stronach’s Magna Entertainment not be allowed to vote in categories where there is a potential conflict of interest. That would include the leading owner and leading breeder categories. The awards are too important to permit any conflicts of interest or suspicions of impropriety.

In the owner and breeder categories (the latter of which was for years determined by a committee vote), there seems to be little imagination or thought put in by voters, who more often than not look at which owner and breeder is at the top of the money list that is supplied with the ballot. If the people who vote for Academy Awards were that lazy, then “Paul Blart: Mall Cop” would win the Oscar for best picture this year.

Opportunity (the number of starters) should play a role in voting for outstanding achievement by an owner or breeder. Twice in the last eight years, a breeder who produced two individual champions in the same year from a small band of broodmares (Virginia Kraft Payson, with Farda Amiga and Vindication in 2002, and Aaron and Marie Jones, with Speightstown and Ashado in 2004) did not even get enough votes to be among the three finalists! That’s insulting to the thousands of Thoroughbred breeders who either can’t afford to or don’t choose to maintain massive numbers of broodmares.  (Click here to see what I wrote about this issue a few years ago at Bloodhorse.)

The NTRA needs to address this, either by eliminating the vote and simply giving the awards for leading owner and breeder to whoever wins the most money, or by changing the system of selecting the outstanding individuals in these two categories. I don’t think enough voters understand the importance of this category or what “outstanding” means when it comes to owning or breeding Thoroughbreds.

SPEAKING OF THE NTRA, what is its future? The organization is a shell of its former self, when it had widespread industry support and a mission to improve the economics of racing and breeding through increased pari-mutuel handle, marketing and greater exposure on television. Following its split from the Breeders’ Cup, the NTRA has lost much of its economic clout and influence, as it no longer has the annual championships to promote to the general public or to race sponsors that were tied in to group purchasing (i.e., John Deere, NetJets, Dodge), which only a few years ago produced upwards of $100 million a year in sales. Following the NTRA-Breeders’ Cup “divorce,” group purchasing through NTRA Advantage has dropped significantly.

Today, the NTRA seems to be playing more defense than offense, reacting to crises (i.e., the death of Eight Belles in the Kentucky Derby, Congressional inquiries, totalizator problems) but not really having the resources to go on the offensive in any areas, including marketing and promotion.

Complicating matters (and this isn’t new) is the ongoing struggle to maintain membership in the NTRA. Churchill Downs Inc., which is tabbed to pay approximately $400,000 in dues for its various tracks in 2009, hasn’t recommitted to membership. A source says Churchill might considering paying $200,000 in dues.  An NTRA official told the Paulick Report he hopes Churchill executives see value in the NTRA’s legislative activities, the “Racing to the Kentucky Derby” television series on ESPN, NTRA Advantage purchasing, the National Handicapping Championship, and the Safety and Integrity Alliance. The interesting thing about the latter, I’ve been told by sources, is that Churchill Downs CEO Bob Evans is the one who insisted the NTRA do something about the safety issues that led to the creation of the Safety and Integrity Alliance.

Magna apparently hasn’t committed to renewing its NTRA membership, either. If the NTRA loses the two largest track ownership companies, it will be further weakened, perhaps terminally.

CORPORATE SPONSORSHIPS ARE A CHALLENGE in the current economic climate, whether it’s the PGA Tour, NASCAR or horse racing. But it was, nevertheless, a surprise to see Bessemer Trust drop its sponsorship with the Breeders’ Cup. I would think the wealth management firm formerly chaired by Ogden Mills (Dinny) Phipps and now run by his cousin, Stuart Janney Jr., is encountering the same economic challenges that many financial institutions are (though Bessemer’s investment strategy is believed to be conservative).  

Janney responded to an email with the following comments: “I would say our reasons for dropping out are as follows. First, we have been a sponsor for some time, which means many of our clients have been entertained at a Breeders’ Cup event and having them back again is possibly less appealing than providing a different venue. Second, the two-day format works better for others than it does for us. Third, we have never been able to really derive full value from the TV ads as our target audience is very narrowly focused. Fourth, as we look at other sponsorships and ways to thank our clients or meet prospects, it helps in tighter times to have this money available. We believe our involvement with the Breeders’ Cup has been beneficial to Bessemer and the staff at the Breeders’ Cup has been a pleasure to work with.”

Copyright © 2009, The Paulick Report

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By Ray Paulick

Though Tom Meeker hasn’t been directly involved with the Thoroughbred industry since stepping down as CEO of Churchill Downs Inc. in August 2006 after 22 years at the helm, he has been an interested sidelines observer. Never one to mince words, Meeker said he doesn’t like what he sees right now, particularly the battle going on between racetracks and horsemen over advance deposit wagering. At the center of the fight on the racetrack side is the man who replaced him at Churchill Downs, Bob Evans.

“The squabbling that is going on right now could not have occurred at a more inopportune time,” Meeker told the Paulick Report. “Throwing grenades back and forth while the industry is crumbling around them does no one any good.”

Meeker said he doesn’t side with either party in the dispute. “In the cold light of day I side with horsemen on a couple of things, but track management is investing their capital and trying to put together a system. I’m not sure there’s a whole lot of money in the ADW business, and the margins can’t be great. I don’t think TVG and Youbet have done that well.

“Racing needs to get much more aggressive about marketing, and there needs to be a consolidation of racetracks and a number of functions so you can run the business in a more orderly manner. With the economic downturn and the squabbling that’s going on, it’s not a good thing. Everyone is just trying to whack up a smaller and smaller pie.

“The fighting makes no sense. There may be irrational people on the racetrack side or among the horsemen, but at some point even the most ill-informed or most radical will have to realize that we can’t keep doing this.

“And I don’t see any sense of urgency on anybody’s part,” he added. “I could think of 10 different things that can be done. Let’s agree that we don’t know the answer today, but let’s come to an agreement and have a reopener in a year or two years. We can’t afford not to have this thing out in the marketplace right now because we are losing customers. It takes five times as much energy and money to regain customers that you’ve lost than it does to keep them.”

Meeker said it’s important for racetracks to get into the ADW business . “They will use it as their primary marketing tool, whether it’s ADW or the various deployment devices – interactive television, telephone , the internet, whatever.  That’s going to be the marketing arm of racing.”

Meeker sees other issues that have plagued the industry for decades. “We need consolidation in so many areas,” he said. “We have all these racing commissions, horsemen’s groups, what have you.  There’s no sense of coordination at all on racing programs among different tracks. If Churchill were to cut out a few days of racing, somebody else would jump in and add more days. We need to cut back on the number of racing days."

He seems happy to let someone else deal with those issues. “For the last few years I’ve just been a mere mortal. I get online now and then and read the racing rags and other things, but I haven’t spoke to Evans since the day I left.”

Copyright © 2008, The Paulick Report 

By Ray Paulick

It was billed as the “Biggest Vegas Qualifier Ever,” but horseplayers who paid $250 to enter Saturday’s TwinSpires.com contest in hopes of getting a berth in the annual National Handicapping Championship might call it the biggest online screw-up since the Churchill Downs-owned wagering platform melted down on Kentucky Derby Day earlier this year.

Midway through Saturday’s 15-race contest, many of the 550 entrants were unable to make their online selections. Instead they got an error message saying “database connection failed; too many connections.” The problem went on for at least five races, and there was no communication from TwinSpires.com to participants. “Obviously, it was not pleasant for the players,” one contestant wrote to the Paulick Report.

Vernon Niven, president of TwinSpires.com and executive vice president of Churchill Downs Inc., told the Paulick Report a decision was made to cancel the contest, refund all entry fees and reschedule the qualifying event as soon as possible. Fifteen berths were scheduled to be awarded for the National Handicapping Championship, to be held in Las Vegas Jan. 23-24. Prize money in that event, sponsored by the National Thoroughbred Racing Association and Daily Racing Form, is expected to be $1 million.

“We had a database failure with the contest engine that overloaded some queues and caused the login process to freeze,” Niven told the Paulick Report. “Not every player was affected but due to the nature of this we had to cancel the contest and will be refunding everyone.”

No wagers were processed incorrectly, according to Niven, although he said the issue also prevented TwinSpires.com telephone operators from placing wagers via telephone. Some TwinSpires customers not involved in the handicapping contest also experienced log-in problems.

“It’s a huge embarrassment for all of us, and we pride ourselves in our contests,” Niven added. “It’s a slap in our players’ faces. We’ll look at who was affected and how they were affected.”

Saturday’s problem, on top of the Derby Day online wagering malfunction, comes from a company that hired a CEO in Bob Evans with a tech-savvy reputation and has a “think tank” division based in California’s Silicon Valley.

“CDI, which promotes itself as racing’s technology company has failed to deliver,” a contest player wrote to the Paulick Report. “I know I’ll be cancelling my account after this and the Derby Day fiasco.”

“We do pride ourselves on having an outstanding technology team and are working on this as best we can,” Niven said. “We did have problems on Derby Day 2008. That was a different issue – a wagering platform problem. We fixed that issue, as evidenced by Breeders’ Cup Day. This was a different issue. It is one of those things that our guys missed. It was a programming error on our part having to do with database queries that allowed our queues to overflow.

“Our players should not have to worry about that. We are contacting our players to let them know that we apologize and that we will be refunding them within 24 hours.”

Copyright © 2008, The Paulick Report

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By Ray Paulick

Bob Evans, president and chief executive officer of Churchill Downs Inc., said during a Friday morning press conference at the company’s flagship track in Louisville, Ky., that the CDI board of directors discussed the possibility of reducing the field size of the Kentucky Derby during a regularly scheduled meeting in New Orleans last week.

The Derby’s maximum field size of 20 is under scrutiny in the wake of the death of the filly Eight Belles in last year’s Derby, even though her fatal injuries occurred after the finish and apparently were unrelated to the number of runners or trouble she may have encountered in the race. The Derby traditionally has the largest field of any race in the United States. No Derby starter has fallen during the running of the race since 1970, when Holy Land clipped heels and fell going into the far turn.

By contrast, Breeders’ Cup fields are limited to 14 starters.

Maximum field size of 14 horses and the prohibition of fillies running against males were considerations in an original discussion document circulated by the National Thoroughbred Racing Association to industry leaders who formed what ultimately came to be known as the NTRA Safety and Integrity Alliance.

Field size or sex limitations were not part of the final recommendations of the NTRA Safety and Integrity Alliance Pledge, which can be viewed by clicking here.

Evans said CDI has devoted a great deal of time and resources to examine a wide range of safety issues since the death of Eight Belles and has adopted all of the safety recommendations made by committees formed earlier this year by the Jockey Club and Thoroughbred Owners and Breeders Association.

The CDI board discussed the reduction of the field size, Evans said, though he gave no indication whether a change will be made. “For now, it’s the way it’s always been,” he said. Nominations to the Triple Crown races, including the Derby, state that the size of the Derby can be “up to 20 horses.”

A reduction in field size might not be greeted favorably by horse owners and trainers who throughout the winter and spring closely follow whether their 3-year-olds are in the leading 20 contenders, based on money earned in graded or group stakes races. Churchill recently announced a marketing agreement with Kempton racecourse in England that will guarantee one spot in the Derby field to the winner of the Kentucky Derby Challenge Stakes, a 1 1/8-mile race on Polytrack, on March 18.

Handle on the Derby would also decline in the event of a reduction in the field size. Evans said Churchill has researched Derby handle in relationship to field size but would not say how much handle might fall. A reduction from 20 to 14 starters would also cost Churchill Downs $300,000 in lost entry and starting fees ($25,000 to enter and $25,000 to start).

Evans discussed the Derby field size and other safety measures following a media briefing announcing that Oaks and Derby ticket prices, with a few exceptions, would be frozen in 2009. “Our slowing economy is having a pronounced effect, and many of our customers have been affected in various ways as well,” Evans said. “Although the Kentucky Derby occupies an elite spot in the world of sports and tickets are typically in high demand, we want to keep our price points at the same level to help our customers in this challenging economic climate.” Click here to read more about the ticket price freeze.

The only exceptions will be scheduled price increases in the 30-year personal seat license program, which are coming off a three-year price freeze; some luxury suites and Marquee Village accommodations; and reserved seats in the infield.

Churchill Downs is also offering the opportunity for on-track customers to buy Derby reserved seats in a sweepstakes running each day from tomorrow (Saturday, Nov. 22) through Nov. 29. Individuals whose names are drawn will be eligible to buy two Derby tickets ranging in price from $88 to $207. (Derby tickets range in price from $88 for infield reserved seats to $693 on millionaire’s row.) One thousand of the tracks 55,000 seats are being offered in the sweepstakes. For more details, click here.

Copyright © 2008, The Paulick Report

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By Ray Paulick

Richard Duchossois, who became the largest shareholder in Churchill Downs Inc. when his wholly owned Arlington Park racetrack was merged with Churchill in September 2000, has been steadily adding to his holdings over the last 10 months. In September alone, the Chicago industrialist has purchased 17,296 shares of CDI.

As part of the original agreement to merge Arlington into Churchill, Duchossois Industries received 3,150,000 shares of CDI and had a right to receive another 1,250,000 shares.

Last November, Duchossois bought nearly 15,000 additional shares in the $49-$50 per share range. In December he bought approximately 25,000 in the $52 range. In March he purchased 69,000 at prices between $45-$47 per share. In August he bought 29,000 shares, about a third of them at $37 per share and the rest around $43.

Churchill stock (CHDN) closed at $50.48 per share on Friday.

The only other major insider trading transactions of CDI stock in the last year was the sale of 15,931 shares by CEO Bob Evans.

Churchill officials are hoping the Kentucky legislature passes legislation permitting racetracks in the state to add slot machines as several other racing states have done, including to the north and West Virginia to the east. Pro-slots legislator Greg Stumbo (formerly the state’s attorney general) said recently he will mount a challenge to be Kentucky’s speaker of the house, a position currently held by Jody Richards, who has fallen into disfavor with many in the horse industry because he blocked a casino bill earlier this year.

The company has had some difficulties in 2008 over contract negotiations with horsemen at CDI-owned Calder in Florida and its flagship track in Louisville, Ky. Purse cuts resulted at both tracks. It will be adding slot machines at Calder after a local referendum was approved, and its other track, Fair Grounds, will be offering record purses at its upcoming meeting, thanks to slot machine revenue.