Churchill Downs' wager that customers would respond to a new ultra-premium seating area, the Mansion, appears to be paying off.
One year after Churchill saw its 2012 Kentucky Derby Presented by Yum! Brands (gr. I) week profits improve by $5.4 million compared with 2011, chief financial officer Bill Mudd said in a Feb. 28 conference call on the company's fourth quarter earnings that early interest in premium seating for the Derby and Kentucky Oaks (gr. I) suggest more success could follow in 2013.
Churchill reported fourth quarter deferred revenue of $43.9 million, up more than $10 million from last year's fourth quarter. Mudd said the largest driver of that deferred revenue is Derby-week ticket sales.
"At this point 65 days out, our premium admissions revenue—that is boxes, suites, and tables in our premium areas—are very strong compared with last year," Mudd said. "Sales of our personal seat licenses are significantly ahead of last year. Sponsorships sales are on track to outpace last year."
Despite increased prices, fans continue to purchase Churchill's premium seating and Mudd said there has been strong interest in Churchill's new ultra premium seating area, the Mansion. The Mansion was built on the sixth floor at Churchill as part of a $9-million renovation at the Louisville track after last year's Run for the Roses. It will offer exclusive seating for 320.
Mudd said the strong early sales bode well for Derby week but cautioned that weather can impact gate ticket sales. He also added that revenues from pari-mutuel wagering are impacted by the depth and quality of the fields in the Derby and Oaks as well as other top races those days.