During the first 10 months of Robert Evans’ tenure as president and chief executive officer of Churchill Downs Inc., the racetrack operating company has undergone some major changes that did not please fans or shareholders.
While acknowledging that some decisions -- such as changing television networks and advance deposit wagering platforms -- were controversial and subject to criticism, Evans said the moves were necessary to position the company for future growth.
“I understand our objectives on occasion may ruffle a few feathers,” Evans told the standing-room-only crowd during the annual CDI shareholders’ meeting at Churchill Downs June 28. “That is one of the things about competition. It is not really our intent to just go out and be disruptive. Our intent is to compete aggressively and to attract more customers to our business…there are always a few potential consequences when you challenge the status quo. We are committed to this path of change.”
Among the most controversial developments was the company’s establishment, with rival racetrack operator Magna Entertainment Corp., of TrackNet Media Group, a content-provider venture. Evans said TrackNet Media was formed to “improve our simulcast and intertrack signals and at the same time to enhance the distribution and integrity of those signals.”
CDI also purchased a 50% interest in HRTV, also a MEC venture, “to ensure that at all times we would have a vehicle through which we can distribute our televised races to a national audience,” Evans said.
Those moves ended CDI’s longstanding business relationships with Youbet.com and TVG.
As a replacement for Youbet.com, CDI established its own Internet wagering venture called twinspires.com, which opened for business during the days prior to the Kentucky Derby Presented by Yum! Brands (gr. I). Because the wagering platform was just getting established on the day of the race, overall wagering on the classic through twinspires.com did not match previous levels when those wagers were placed through Youbet.com, prompting criticism from Youbet.com management.
“As we have put these changes in place, we have been very much aware that we have created some disruptions for some of our fans,” Evans said. “We have tried to do everything possible to minimize those disruptions, but I know personally that we have made it somewhat more difficult on occasion to watch our races on television or get a bet placed. We apologize for any inconvenience and will get that transition completed in second half of the year and move forward in much better way than we have in the past.”
Evans said establishment of twinspires.com and the subsequent acquisition of three Internet wagering companies gives CDI 20% of the Internet wagering market, the fastest growing segment of horse race wagering. Noting that wagering on Thoroughbred racing has been flat for the past decade, Evans said the challenge for CDI is to increase its market share.
As part of the company’s efforts to increase handle, Evans said an initiative is under way within CDI to review the 150,000 races run at North American racetracks over the past year to determine which types of races attract the most betting dollars. ”We are trying to figure out what is it that generates handle,” he said. “We hope to use that information to write a better race card and produce better races.”
Evans said other keys to CDI’s growth in the competitive racing and wagering marketplace are leveraging its three distinctive brands – the Twin Spires, the historic track itself, and the Derby; continuing to attract and retain the best people in the business; continuing the company’s customer service programs; and embracing technology.
“In short, we want to be the best and plan to be the best,” said Evans, who assumed his position in August 2006 after the retirement of president/CEO Tom Meeker. “I think that when 2007 comes to a close your company will have significantly outperformed its competition in the Thoroughbred business and will have achieved growth in what I think will be a very tough industry climate this year.”
In a departure from previous shareholder meetings, there was no question and answer session at the end of the meeting. Generally, the questions ranging from everything such as customer service to management decisions, were answered by directors or CDI management. Instead, those in attendance were given complimentary passes for lunch and afternoon at the races, during which they could pose questions on a more informal basis.
During the business part of the meeting, four directors were re-elected to three-year terms as Class II directors: Richard L. Duchossois, J. David Grissom, Seth W. Hancock, and Susan Elizabeth Packard.
Duchossois, 85, CDI’s largest shareholder, said he supports the developments made so far under Evans’ tenure, especially the decisions to focus on technological advances. “I think we have tremendous leadership and are moving forward at a rapid pace because we are bringing ourselves up to the times, with new technology,” he said. “All businesses are moving toward more technology, it is the way of the future.”