CDI Takes Financial Hit in Florida Racing Dates Battle

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The South Florida racing wars will enter their sixth month soon, and Churchill Downs Inc. has paid a steep price for the lack of agreement between the track it operates, Calder Race Course and Casino, and Gulfstream Park, which is owned by the Stronach Group. For the first time in history, the two Miami-area tracks have been operating head-to-head on weekends since July, with Calder racing three days a week and Gulfstream on Fridays and Saturdays.

In a recent third-quarter earnings call, Churchill Downs Inc. chief financial officer Bill Mudd said the company’s racing revenues were down 19% and attributed $14 million of the decline to Calder’s competition for both live racing and host status for simulcasting into Florida. In previous years, Calder benefited as simulcast host for all of Florida during its live meeting throughout the late spring, summer and fall. That revenue is now divided among Calder, Gulfstream and Tampa Bay Downs, the latter of which defined itself as operating a “year-round” meeting by holding a single race-day on the first and last day of the fiscal year.


In that same earnings call, Mudd said the Florida legislature’s Joint Administrative Procedures Committee issued a letter to the state’s Division of Pari-Mutuel Wagering (DPMW) questioning whether Gulfstream should qualify as simulcast host because of a statute defining a “meet” as three days of live racing each week.

“We will pursue the recovery of the lost hosting revenues since the dispute started on May 7 using all means available to us,” Mudd said.

The DPMW, meanwhile, held a hearing Nov. 7 on a proposed new rule that would define a race meet as one with “at least two days” of on-track live racing.

That proposed rule was challenged in a letter to DPMW director Leon Biegalski from Marjorie Holladay, chief attorney for the Joint Administrative Procedures Committee. Citing chapter 550 of Florida statute that defines “live racing” as no fewer than eight races (with limited exceptions) for “each of a minimum of three performances each week,” Holladay asked Biegalski how the proposed two-day rule “does not contravene” Florida law.

The DPMW has until Thursday to receive written comments on the proposed rule defining a meet as two days. A spokesperson for DPMW said Biegalski will then “evaluate and determine whether it is appropriate to have an additional hearing, proceed with the next step and/or publish a notice of change in the rule-making process.”

In the meantime, Churchill Downs found a silver lining in the storm clouds. Mudd said the company expects to make up some of the lost revenue in the first quarter of 2014 when Calder plans to race 39 days during a period it has traditionally been closed and Gulfstream has been open.

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  • Bob C

    The vultures are trying to pluck clean any remaining meat on the carcass. They thoroughly disgust me. This is a deplorable situation brought about by greedy racetrack management.

    • 4Bellwether666

      Would you really expect any different from these two groups of clowns???…

      • c bea

        Truly only one group of clowns and they call the Twin Spires home!!!

        • 4Bellwether666

          Go into that cave they call Laurel Park and check out that circus…

          • shakeyoudown

            Not sure what your talking about here. Laurel is thriving and the new Maryland program has the farms bringing in new stallions and the horsemen are very happy. 2x Allowance purse=45k. They are getting ready to start building new barns and the Maryland Casino revenues are higher than what the revenue projections were.

          • 4Bellwether666

            Thriving???…With all due respect…What’s the avg. head count per day @ the track and how long is the casino $$$ really going to last in the future…New stallions they no longer want in KY. N.Y. PA. FL…Is that what you call thriving???…If it wasn’t for the Preakness they (Frankie boy) would have been gone…Period…

          • shakeyoudown

            Well I entered a horse last week in a race that had 38 and they did not even used the race! Bowie is full and trainers that were late getting in their stall applications were shut out.

            The smallest field in Friday’s card is 9 and 6 or the nine carded have full fields with the turf having 14 starters and a full AE list. The casino revenue just came online last year so they are in their infancy stages.

            I would never expect MD to compete with Kentucky for stallions however Kentucky Derby winner Giacomo will be standing there in 2014.

            Look at the numbers from last winters meet. Total wagering from Jan. 1 to March 30 was $117.4 million, compared with $96.6 million in 2012.
            Ontrack handle figures increased 7 percent from $485,500 to $518,900, while the export numbers increased 22.5 percent from $1.16 million to $1.42 million per day. Mind you these numbers are in the middle of the winter season.
            What other tracks are experiencing growth like that with daily purses for the current meet are just under 300k.
            Better times are ahead for Maryland.

          • 4Bellwether666

            I really hope you are right…Good luck to you and Maryland racing in the near future…ty…

          • Jay Stone

            Good use of real numbers to prove a point. Maryland racing is thriving under Stronach’s leadership despite his critics. This is the exact opposite of the CDI tracks. It’s hard to argue with pure numbers.

  • Right then, Right now

    Gee, maybe Evans will be forced to give up some of his $4.5 million annual paycheck. Or, more likely, CD will just cut back on purses.

    • Jay Stone

      You must have a crystal ball.

  • Mudd is My Name

    So Mudd, let me ask you something….how do you expect to make up for lost revenue during the first quarter when your paying more for purses than your earning and you have no ITW? What are we all missing?

  • Bob F

    I could care less about Churchill Downs. They buried Hollywood Park when they sold it to Bay Meadows Land and could care less about horse racing.
    I hope Gulfstream puts Calder out of business unless CDI sells Calder to a company that cares about racing.

  • John D’Amato

    Churchill Downs, in ALL if its venues, is the enemy of horseman and the thoroughbred industry – PERIOD !

    • Steve

      The horsemen are the enemy of the Horseplayers.

      • John D’Amato

        Hard to understand why but, if so, who are the friends of the of the Horseplayers – Government, tracks, who ?

        • Steve

          Can you name one Horseman group(that accepts ten’s if not hundreds of millions from slots)that has called for lower takeout to help increase interest and handle?

          • John D’Amato

            ALL horseman, (groups), call for lower takeout to help increase interest and handle – FROM THE STATE – where no investment has been made and no takeout is deserved.

          • Steve

            Not one horseman group (that accepts slot money) has even ASKED too lower the takeout. They have no respect for the Horseplayer.

      • Jay Stone

        Steve, you have it wrong. The large majority of horsemen know there is no game if you don’t have the players. That is why the tracks that treat the players the best will prosper and the rest will struggle to survive. Best example would be Gulf versus Calder. The answer to where the players are treated better is obvious by just looking at the parking lots.

        • Steve

          Gulfstream has been good to the horseman. How about the horseplayer? Has Gulfstream lowered the takeout since receiving slots? The answer is no! 26% takeout is a joke.

          • Jay Stone

            You are correct in saying takeouts should be lowered. This is something that needs to be addressed by management, the state, and horsemen’s groups. My point was that the players are treated better there than other venues their customers service and perks are far superior than other tracks. I do believe the horsemen who put on the show know without the players they wouldn’t exist.

          • Steve

            “I do believe the horsemen who put on the show know without the players they wouldn’t exist.”… Where’s the proof Jay?

            Blah Blah Blah…come on Jay. I’ll repeat please give me the name of a Horsemen’s group who has asked to lower the takeout.

          • guest

            HANA

          • Steve

            What about HANA?

          • Jay Stone

            As both a player and a horseman I Understand the dilemma you are presenting. The Horsemens groups are not the ones responsible for lowering the takeouts. This falls on track management and state. I still believe that most individual Horseman know the importance of the players to the game. The problem is most of the horsemen don’t belong to the Horsemens groups And thus would not have a say In any of the voting done by the horseman’s groups. The state of Florida would be the best Place to get something like this started off the ground. There is enough cooperation between Gulfstream and the Florida Horsemens groups that this could be tried here.

          • Steve

            jay, horsemen’s groups are against lowering the takeout.

          • Boca Ronnie

            That Gulfstream kool aid must be tasty, Jay. You seem to drink a lot of it.

          • Jay Stone

            Not really. You have two choices here. You have Magna or CDI. I believe Magna is the lesser of the two evils. It’s a pretty easy choice right now. Until another alternative surfaces it would seem an obvious choice.

          • Boca Ronnie

            Actually, if you want to be technical, there is no Magna when it comes to racing anymore. Magna was the name of Frank Stronach’s company until they declared bankruptcy, stiffed many of their vendors and debtors, and resumed business with a “clean slate” under the current name The Stronach Group.

            I agree both companies are “evils” though.

    • c bea

      Steve how exactly are the horsemen enemies of the horseplayers? Without the horsemen getting up at daybreak, working through all sorts of weather, working weekends and holidays there’s no event to wager on. The horseplayers are important but they’re one leg of the stool not the stool.

    • David

      A racing-only license isn’t worth what it was prior to the early seventies. CD nor any track no longer have the kind of volume/margins to be the partner of yesterday. Pre-Stronach and with the advent of slots, CD had a sweetheart deal with Calder. To keep it, however, required a strong lobby, an area in which CD – wherever it has/had properties – is a chronic underachiever.

    • LOU RACING FAN

      ALSO INCLUDE THE FANS,THEY HAVE ZERO RESPECT OFR US!!!!!

  • c bea

    Couldn’t happen to a better (read worse) group than CDI. It’s a tragedy that our sport’s biggest event is owned by this group of pirates!!!

  • Richard C

    Both arrogant ownership groups only care about scorched earth and could care less about the fans & horsemen.

  • Jay Stone

    If those 39 days are considered a silver lining by CDC management and accountants they had better go back to school and take night classes for continuing education. They are getting destroyed by a 3 to 1 margin running against Gulfstream. Throw Tampa into the mix and their handle on atrocious racing will be even worse. If their purses stay at the present low levels and the handle decreases they will loose more money but that’s a silver lining?

    • THE ENFORCER

      WILL THE WINTER WEEKEND RACING CONSUMER GO TO GP OR CRC ??.. WON’T BOTH PROGRAMS BE DEPLETED OF QUALITY STOCK??..

      WILL AN AGREEMENT BE REACHED?? WILL ONE OF THE TRACKS CALL IT QUITS??.. WHOM HAS DEEPER POCKETS??

      JAY — YOU ARE SO RIGHT ABOUT THE ATROCIOUS CRC RACING–WHY ATTEND OR EVEN PLAY THE OFFERINGS??.. I WILL GO TO HIALEAH FOR THE Q-HORSE CARD– JUST TO BE AT THE GRAND OLD DAME..

      IS THERE A MORE EGO-ORIENTED BUSINESS THAN T-BRED RACING??

      • Jay Stone

        If there is a winter Crc it won’t affect gulf in the better level of racing. I wish I did know what the final fate will be but that will be determined by people far smarter than me. Most of Calder’s races will be cheap claimers which would have more effect on Tampa than Gulf. You will have a cheap allowance thrown in. As to where the people will go that is a no brainer considering the ambience at Gulf is somewhat better. They both have deep pockets but CDI has to show a profit and Magna is private.

        • Jonathan Berger

          Opinions of people who are close friends of one track’s management as well as on the payroll of that track’s most influential horse owner (as Mr. Stone is with Gulfstream’s Tim Ritvo and horse owner Frank Calabrese, respectively) are totally biased and therefore useless.

          Both tracks have offered TERRIBLE races over the past 4-5 months, and both tracks are LOSING money. Yes…GP is LOSING money with this ridiculous head-to-head nonsense. The handle is much higher than Calder’s, but not high enough to overcome the higher purses and the $500 PER HORSE that they’re bribing the trainers with.

          You’re right about one thing, Mr. Stone…CDI is a public company and has to show a profit. What you’re not stating is that Calder racing is a minor blip on their model right now. They lose a little with Calder’s racing and make MILLIONS with everything else, including Calder’s casino. I would guess they’re not nearly as worried as those who support GP think.

          As a bettor residing in Miami both places are putrid t

          • Jay Stone

            Who I have as friends doesn’t paint this picture any Differently. These two tracks are heading in totally opposite directions. That is a matter of fact bias or no bias. CDI Doesn’t want to be in the horse business. It is just waiting for the right time and place to get out of it. When the right financial position is put in front of them they will get out.

          • Meg Gunderson

            I don’t believe Stronach cares about the welfare of the horse business either, but in a different sort of way.

            CDI, at least in regards to Calder, seems to not care. The facility is run-down, the barn area is a pit, and the racing sucks. Stronach seems to act like he cares as long as it results in a monopoly, then Katy bar the door! The bettors don’t want a monopoly, and the horsemen are scared of having all their eggs in one basket (the Stronach basket, as it were). Can you blame them?

            The best thing for the welfare of Florida racing is to have legislation and regulation. It’s obviously been proven that having free market and allowing the companies to work out racing dates amongst themselves DOES NOT WORK. Calder is too stubborn. Gulfstream is too stubborn.

            They are incapable of working together to do what’s “best” for racing, so that privilege should be removed.

          • Jay Stone

            What we saw when Calder ran without competition was a slow deterioration of the racing product. If this industry came under regulation as far as dates are concerned you would go back to the same. If the gamblers want a choice they are not showing it by betting on the Calder signal. Without first class racing the Gulf signal is outhandling it by 3 to 1.

    • mike

      You don’t get it? They want to get rid of Calder – and only have the slots and simo.

      • Jay Stone

        Exactly, Mike. That is their ultimate goal but it can only be accomplished by de coupling , which is a legislative process. That is why CDI is hanging in there to see if it gets done. When the answer comes from Tallahassee then you will see CDI make their move.

  • taxicab

    Florida racing is so screwed up.
    Calder is a cheaters paradise.
    GP is run by a flat out bully who doesn’t care about anybody but himself.
    They were made for each other….

  • slewcat

    I recall Garden State and Philly Park going head to head Only a river was between them. GS lost.

  • THE ENFORCER

    BOB C.. AS YOU MAY KNOW THE JAN./14 EXPIRING ADW LAW IS TIED TO THE GAMBLING/CASINO/ RACETRACK SLOTS BILL THAT IS DEAD UNTIL THE IL. PEN$IONS CRISIS IS ADDRESSED..IT DOES NOT LOOK LIKE THE RACING COMMUNITY IS UNITED– THERE IS A LACK OF STATE PASSION AND URGENCY TO KEEP OUR ADW ACCOUNTS ACTIVE..

    CURRENTLY, IT LOOKS VERY BLEAK FOR IL. RACING IN 2014..IT COULD CHANGE..

    • David

      What’s with caps.

  • not really

    So CDI is the villain….hahaha.
    Stronach declare bankruptcy and buries $1 billion in stockholder equity.
    CDI invests in its products and returns shareholders dividends and price appreciation.
    Stronach (rightfully) realizes he has the better product and buries Calder-who is the villain here?
    Churchill sees Hollywood Park does not fit into their portfolio and they sell it. Villian? Should they have kept a non performing asset or declared bankruptcy like Stronach?
    Sell Calder to Frank, including the casino, for 300 million and let a single owner-who has prove-prove=he has only his best interests in mind, than see who the real villain is.

    • c bea

      Stronach has invested tens or hundreds of millions of dollars in Horse Racing. What has Churchill done other than take from Racing? There are more shareholders they’re responsible to beyond just those that hold stock. Churchill is the worst ambassador for Racing there is.

      • racebannan

        Umm, let’s see: in the past 20 years, CHDN will have spent about $200 million on its Churchill Downs facility, $85 million on a slots facility that keeps Calder racing, $45 million on a slots facility that keeps Fairgrounds racing, $13 million to build Hoosier Park, more than $100 million on the racino in OH, and well over $300 million on cap ex at its racetracks.

        Your boy, Frank, on the other hand, bankrupted a racing company and shut down a few tracks. But, he did spend $ building that mall at Gulfstream and the training facility at Palm Meadows. And, he gave the industry “Streuflex.”

        • brussellky

          Did I miss something? What tracks has Frank shut down? I can’t recall any.

          • racebannan

            Bay Meadows, Great Lakes Downs off the top of my head. Throw in a training facility in SoCal (San Luis Rey?)…He also nearly buried racing in Maryland by failing to apply for a slots license and pretty much killed racing in Michigan by backing out of a project. Yet he’s a hero to the CDI haters (who probably lost their coveted box seats when Churchill discovered it could charge SuperBowl prices for the SuperBowl of racing).

          • brussellky

            Frank/Magna did not close Bay Meadows and, in fact, never owned it. They leased the operating rights and the lease expired 3-4 years prior to the owner closing it. You are correct on Great Lakes Downs, I forgot about that one.

        • Jay Stone

          As somebody who is biased towards Magna I have to reply to some of these things. CDI did spend a fortune on the frontside of Churchill but it was just to keep the huge profits coming from that track. The other tracks are in disarray. If the backside of Calder was open to the public they would be in total awe just as they are when seeing Churchill. The casinos weren’t built out of the goodness of the shareholder’ s hearts but because of the huge profits they bring in. The Calder facility pre CDI was the gold standard for a small operation. Stronach’s vision of the future of racing through Gulfstream is far more realistic than what remains of Calder.

          • racebannan

            From everything I’ve read or heard, it does sound like CDI has neglected Calder — ONE of it’s other tracks. Yet, you gave the blanket statement, “the other tracks are in disarray.”

            Last time I visited Fairgrounds, I didn’t see anything that looked like “disarray.” It’s a relatively small, new facility. And, the guy really running Arlington doesn’t have “disarray” in his vocabulary.

            Go ahead and rip the company for one bad apple. Your boy Frank had a basketful of them when he bankrupted Magna Ent, stuck the $1 billion bill to shareholders then got some court to let him handpick which tracks he got to keep.

            If somehow that makes him better for racing, whatever…

        • c bea

          Isn’t San Luis Rey Downs still open?

      • c bea

        racebannan, Churchill spending $200 million on Churchill is hardly them supporting racing or our sport out of the goodness of their hearts. Frank may or may not be making money on breeding and racing who knows. But his support of the horsemen is far beyond anything Churchill has ever thought to do. And the executive management team at Churchill couldn’t be a bigger group of creeps!

    • c bea

      Try and do business with Churchill in any regard….hahaha…good luck! Horrible human beings run that company.

  • jack

    even more outrageous, Arlington/CDI is calling for an increase in takeout in Illinois.

  • Kingturf

    I live in Florida…ask me how many bets have I made since the final day of Gulfstream Park meet in April? Zero…I make all of my bets through online wagering and not one Florida track got a single wager from me. Hialeah almost ruined horse racing for the bettors 20 years ago down here,now Team Stronach is about to finish off what Brunetti started. Doping cases at Tampa while short fields at Gulfstream and Calder is not my idea of horse racing. Greed is not good!

  • we’re watching

    Oh, you mean CDI who sold HollyPark knowing that it would go down to destruction. Maybe they need to rethink their philosophy for the good of the sport. They seem to be making many wrong decisions. The next bad decision will be the Kentucky Derby at night, God forbid.

    • racebannan

      I personally really enjoyed Hollywood Park — loved the place and wish it could stay open. But, CDI is a business, and they got an offer no one could refuse ($260M for an operation they bought 6 years earlier for $140M). Considering the difficulty of making a buck as an operator in California — and assurances from the buyer that they would keep the track open for several years — how can you fault them for that decision? The new owner, by the way, ultimately pulled the plug — 8 years later.

  • Mort the Sport

    GP has been at this for years since the Donn family’s ownership days when they put a fork in Hialeah’s t-bred industry.

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