Posts Tagged ‘churchill downs’

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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To hear Carl Pascarella tell it, you’d think corporate marketers would have lined up from Louisville, Ky., all the way to New York’s Madison Avenue to bid on the Triple Crown sponsorship that Visa USA dropped in 1995 after a 10-year run. The relationship between the Triple Crown and Visa ended the same year Pascarella retired as the credit card giant’s chief executive officer.

Pascarella, speaking at a Tuesday afternoon session on Marketing & the Customer Experience at the 32^nd Asian Racing Conference in Tokyo, used the familiar introduction from ABC’s “Wide World of Sports” to describe sponsorship of American racing’s highest-profile series, which begins with the Kentucky Derby on the first Saturday in May, continues two weeks later in the Preakness, and concludes three weeks after that with the Belmont Stakes.

On the other hand, he said, there is “the agony of defeat. In six of eight years we had horses that won the first two legs and didn’t win the Belmont.” That defeat eliminated the possibility of further promotions congratulating the winner of the Visa Triple Crown Challenge and the accompanying $5-million bonus, as well as any additional races the winner might compete in, including the Travers Stakes or Breeders’ Cup.

The Triple Crown was one of several world-class sponsorships for Visa in the sports and entertainment world. “Each one of them,” Pascarella said, “had a common focus on a couple of very important things: understanding who their fan and audience was; and secondly, they understood how to drive value to that fan base. They had an unwavering commitment to both things. At Visa, we looked more to sports as being the pinnacle of entertainment for fans, or our customers. No other form of entertainment brings the same kind of excitement or elation as sports does.

“The sports that are best for our sponsorship,” Pascarella continued, “put the fan in the center of the activity. They create deeper relationships because it’s a fan-centric approach. They give the fan a way to get into the event itself.”
 
Pascarella recalled how much value he was able to give to Visa’s best customers — bankers and merchants — who would come to Louisville for the Kentucky Derby. “We’d bring them on a backside tour of Churchill Downs on the day before the Derby,” he said. “They’d see the horses who would be racing in the Derby the next day, meet trainers like Bobby Baffert and D. Wayne Lukas, and these people felt like they were part of it all. We were giving them something special because of a sponsorship that was invaluable. That’s what we were paying for, that extra feeling that allowed our customers to get inside the sport.

“We’re not looking at fan numbers, we are looking at fans who are engaged, fans who will be engaged with us and our products and services,” Pascarella said. “We look at selecting and evaluating sponsorships based on being able to drive consumer behavior. How have we lifted the brand, how have we changed behavior, how have we made the consumer closer to us as a result of the association? The more we win, the more we put into a sponsorship. But it’s not just about the money. It’s about the relationships you can build with your sponsor and what you can give your sponsor in return. You need mutually beneficial objectives.”

Interestingly, while Visa dropped its sponsorship of the Triple Crown, it entered into a five-year agreement with Churchill Downs to sponsor the Kentucky Derby. No company has stepped forward to sponsor the Triple Crown since Visa’s exit from the series. One reason may have been a decision by the New York Racing Association to end its association with NBC Sports, and put the Belmont on ABC/ESPN. Another may have been fragmentation within the three tracks that comprise Triple Crown Productions and a power struggle over how sponsorship revenues were divided. Currently, of course, they have nothing to divide from a Triple Crown title sponsor.

 Pascarella, now an executive adviser to TPG Capital, also cautioned racing associations that the current economic climate will cause nearly every major corporation to reevaluate its advertising, marketing and sponsorship budgets. “Every economist projects a very deep and long recession,” he said. “That means your sponsors are going to be under a great deal of pressure. You need to reach out to them, even though your revenues also are going to be under pressure. If you reach out to them, and say, ‘How do we work together to get through this?’ that will go a long way.”

BRANDING GURU DAVID AAKER , professor emeritus of marketing strategy at the Haas School of Business at the University of California-Berkeley, talked about how racing can build its brand.

At a time when brand trustworthiness and quality perceptions of most brands are down significantly in the minds of the public, Aaker said there are opportunities to improve branding through increased energy. He cited the Nintendo video game brand as one recent phenomenon in the branding world. Five years ago, Aker said, Nintendo ranked 165^th among brand names in Japan, moved up to 65^th three y ears ago, fifth two years ago, and now ranks as the country’s leading brand, thanks to the energy created by the Nintendo Wii platform and games.

He cited five other very diverse brands that have energized themselves in recent years: 1) the Memphis Redbirds minor league baseball team; 2) the Indianapolis Motor Speedway; 3) PGA Tour golf; 4) Harley Davidson; and 5) Avon cosmetics.

All of those brands used one of two methods: energizing the business itself, or finding something with energy that is interesting and involving and attach it to the brand. “Both options are really powerful,” Aaker said.

The Memphis Redbirds, Indianapolis Speedway and Harley Davidson energized their brand by engaging their customers in multiple activities that built on the customer experience. The PGA Tour and Avon tied themselves to something with energy. The PGA Tour used Tiger Woods to its best advantage, and Avon linked its products to a breast cancer crusade and created the Avon Walk for Breast Cancer, with millions of people engaged each year. Similarly, Aaker said, Lowe’s home improvement stores attach their brand to Habitat for Humanity. In the case of Avon, he said, “Breast cancer is so important an issue and involving to the target audience that it provides Avon a way to get energy that it could never do through their products and services.”

In addition, he said, self-reflection is necessary. “What about the customer experience is boring or unpleasant? How can you mitigate that? What can be added to en rich and improve the customer experience.”

“You have one of the most exciting events in sports and entertainment,” Aaker said. “But you need to ask yourself, ‘How can I add energy to my brand?’”

TELEVISION ADVERTISEMENTS PROMOTING RACING around the world were shown to the group and  audience members were asked to vote on their favorites. The ads were divided into five categories: Celebrating the Horse; Sex and Glamour; The Punt; A Good Laugh; and The Buzz.Most provocative were ads from Australia promoting sex and glamour. Other countries featured included France, Turkey, Japan, Hong Kong, Germany, Ireland and the United States (two ads from Santa Anita were featured). Details tomorrow on the winning ad.

We’re hearing a lot recently about what a good thing it is to be a maverick. Jackson seemed worthy of that title as a supporter, ironically, of tradition; and restoring the BC’s more appropriate role in championship racing. By running in the Turf instead of the Classic, Curlin’s master would not only maintain his personal credibility, but would also assume a leadership role in righting racing’s course.

Finishing second in his lone turf start — sandwiched between two previous BC Turf winners — Curlin’s defeat in the Man o’ War appeared to be more a function of riders than horses. Curlin could redeem himself against the returning Red Rocks and add to his Horse of the Year resume in the process. The best part would be that Curlin’s fans would be able to bet him with the confidence they would be getting a competitive as well as sporting effort from both horse and owner.

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By Ray Paulick

THOROUGHBRED HORSEMEN’S ASSOCIATION: CEO Alan Foreman said the organization has not taken a position on the current legislation. “There will be a new Congress in January and we will visit the issue then,” Foreman said.

THOROUGHBRED OWNERS AND BREEDERS ASSOCIATION:  Position statement from TOBA president Dan Metzger: “We are categorically opposed to the slaughter of Thoroughbreds, and urge all those involved in the Thoroughbred industry to support rescue and adoption efforts and to work together to find humane means of dealing with the problems presented by Thoroughbreds no longer suitable for racing or breeding.” Metzger did not indicate whether or not TOBA has a position on H.B. 6598. TOBA is a member of the Unwanted Horse Coalition and is affiliated with Thoroughbred Charities of America, which supports numerous horse retirement and retraining operations.

THOROUGHBRED OWNERS OF CALIFORNIA: Did not reply to requests for a position statement. TOC’s Web site offers advice to a horse’s “last owner” and pushed for a first-of-its-kind charitable fund, the Calfornia Retirement Management Account  (CARMA), to solicit and distribute purse checkoffs for retirement and retraining programs. Transport for slaughter is illegal in California.

THOROUGHBRED RACING ASSOCIATIONS: Executive vice president Chris Scherf said the organization of North American racetracks has adopted no official position.

By Ray Paulick

Best unintentionally funny line of the week came from John Brunetti, the owner of Hialeah Park. Discussing a conversation he had with Halsey Minor about the technology wizard’s interest in buying and reviving the shuttered South Florida racetrack, Brunetti was quoted in a trade publication as saying: “I have told him that in some ways I don’t think he understands this business.”

Does Brunetti think he understands this business? How could he? If he did, how did he let Doug Donn outsmart him on every move and get control of the best winter racing dates for Gulfstream Park? Why did state legislators and regulators turn their back on him? How did Calder crush Hialeah in head-to-head competition? Why did Brunetti raise take out to the point that he chased away any remaining horseplayers Hialeah had? Why has the track sat empty for more than seven years?

It’s a mortal lock that Hialeah will never reopen successfully with Brunetti as the owner and operator. I happen to think John Brunetti is a nice guy who loves racing, but I have zero confidence that he can revive Hialeah Park on his own (and I may be more optimistic than state officials or Florida horsemen).

Does Halsey Minor know everything there is to know about Thoroughbred racing? Of course not. But he comes to the game with passion, enthusiasm, capital and confidence that he can return Hialeah to some semblance of its past glory.

Brunetti isn’t the only industry veteran who thinks Minor may be nothing but a dreamer if he thinks he can revive horse racing as a sport. I’ve heard from a number of racetrack executives and horse owners who said they’ve heard it all before. But what is the alternative for Hialeah Park or operating tracks that are hanging on by a thread? Lobby to get slot machines, turn the facility over to a casino company and hope it will subsidize the money-losing portion of the business indefinitely?

Should Brunetti and others in the industry just blow off this opportunity that Minor presents to give horse racing in the Miami area one last chance to stand on its own as a sport?

I remember when Frank Stronach came into racetrack ownership and said he would try to make the sport more compelling and entertaining. In the beginning, Stronach said he had no interest in getting slot machines at his tracks. But Stronach became a victim of his ego, forcing in too many of his own bad ideas and forcing out too many executives who dared to disagree with him. He almost seemed obsessed with getting control of as many tracks as possible without having any idea what he was going to do with them all.

Gulfstream Park was the first Florida racetrack to get slot machines. Under Stronach’s vision, Gulfstream became the least successful slot machine operation in North America, based on the benchmark of dollars won per machine per day. Calder will be adding slots as early as 2009 after getting approval in a local referendum in January of this year. The rebuilt Gulfstream Park is more slots parlor and simulcast theater than it is a facility to host live racing. In short, it’s a disaster.

Calder, built to host hot-weather summer racing, has always struck me as a cold and impersonal track, but it’s never seemed colder or more impersonal than it is today. In a recent weekday visit there I stumbled across what seemed like no more than several hundred fans scattered throughout the first two floors (most of the third floor is closed).

Count on Churchill Downs management to pigeonhole those fans in as small an area as possible once the slot machines are installed and plugged in. Racing at Calder will become secondary, though its purses will be healthier than they are today because of the slot subsidies. But what will Churchill Downs management’s long-term vision be for racing at Calder?

Minor said he has no interest in bringing slot machines to Hialeah Park. The competition for slots players is intense, with the Seminole Native American tribe holding the market share advantage at their Hard Rock Casino in Hollywood, Fla. Minor wants to focus on the excitement of racing and the fact that it’s the only sport you can legally bet on. 

Racing needs people like Halsey Minor, and people in the industry should be doing everything possible to help him succeed.

Copyright © 2008, The Paulick Report

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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.

Investors haven’t been wild about Churchill Downs stock (CHDN), which closed at $46.45 Friday and hasn’t seen $50 a share since May 1. It’s 52-week high, $57.55, was achieved last December.

CEO Bob Evans and the TrackNet Media Group that was formed with Magna Entertainment to broker simulcast deals has refused to talk seriously with the Thoroughbred Horsemen’s Group, which is negotiating account wagering contracts with racetracks on behalf of local horsemen’s groups such as the Kentucky or Florida Horsemen’s Benevolent and Protective Associations. In fact, Churchill has filed anti-trust lawsuits against the organizations. Evans may be hoping that the longer he puts off dealing with the THG, the less resolve the horsemen will have to stick together in attempting to forge a better contract on account wagering.

That strategy doesn’t appear to be working. To the contrary, it looks more like Churchill Downs’ partner in TrackNet Media is bailing. Frank Stronach, the chairman and acting CEO of Magna Entertainment, sent out a press release a couple of weeks ago saying that Magna recognizes the THG as a beneficial national organization and is negotiating with THG.

SPEAKING OF WAGERING, hats off to Bloodhorse editor Dan Liebman for calling out the Jockey Club after it capitulated to Evans and to Churchill Downs’ biggest shareholder, Dick Duchossois, and decided to no longer provide the trade magazine with meet ending pari-mutuel handle figures. Churchill tracks under Evans and Duchossois have said that handle is no longer a meaningful statistic. Oh, really?

The decision by the Jockey Club to no longer provide this key economic indicator was disgraceful, but I wouldn’t hold out any hope the poobahs there will change their mind.