CDI president and chief executive officer Robert L. Evans shared the assessment with a crowd of about 200 gathered in the Triple Crown Room at Churchill Downs for the company’s annual meeting of shareholders.
Horsemen groups and CDI are locked in a disagreement over how wagering revenues placed through Internet and telephone platforms should be shared, and horsemen have withheld consent for track signals to go out to advance deposit wagering companies.
The battle has resulted in respective drops of more than 10% and 70% in handle at Churchill Downs and Calder Race Course, which is also locked in a fight over future slot revenues and purse contracts.
“I can’t tell you when the situation will end,” Evans said. “But I can tell you that Churchill Downs is committed to finding a solution that will be beneficial to all the parties involved, including horsemen, customers, and you, our shareholders.
“The horseplayers know what an inconvenience this has been: being unable to bet on races they want,” he added. “Our customers have been unable to do this, and I'm sympathetic with the fact that it is frustrating. It is equally frustrating to me.”
Handle on the Churchill Downs meet is down 10.14% to $416,889,932, according to data collected by The Jockey Club Information Systems, and is off 21.08% since a 20% purse cut was implemented by CDI at its signature Louisville track May 14. Purses for the entire meet have fallen 7.02% to a daily average of $493,238, and are down 14.19% to $357,621 since the purse cut was enacted.
“This dispute has resulted in their limiting our ability to send our signal into the ADW and simulcast markets, which has resulted in a reduction of revenue for our company, and also a reduction in revenue for our horsemen,” Evans said.
But Evans said the company was moving forward.
“We will also work to resolve our outstanding advance deposit wagering … disputes with horsemen, because we feel that is one of the greatest opportunities to grow our company across the country,” he said. “The demographic of the horse racing fan is on the older rather than the younger side of the ledger, but the future of our youth is heavily built around the Internet. And we need to utilize that to increase the growth of horse racing.”
Arlington Park owner Richard L. Duchossois, whose family businesses and trusts accounts for about 24% of all CDI stock, said in a post-meeting interview he approved of the way the company is being run by Evans, who assumed his roles in August 2006.
“Bob has put together one of the strongest teams in the industry,” said Duchossois, who is also a CDI director. “Racing is our core business. Now Bob is bringing (CDI’s) technology coverage to a higher leverage. We are trying to catch up, but also trying to get ahead.”
Duchossois declined to comment on the horsemen dispute. “There are so many things going on, and I’m not part of working things out,” he said.
In an informal mingle period following the 22-minute shareholders meeting, Evans was approached by a representative of the People for the Ethical Treatment of Animals advocacy group. Lindsay Rajt asked Evans if a meeting could be set up to discuss proposals the group has published concerning horse safety.
“Well, how about right now?” Evans responded. “Do you have time today?”
Rajt said she would prefer to set up a future meeting between Evans and PETA president Ingrid Newkirk.
PETA announced June 18 it had purchased 80 shares of CDI stock so representatives could attend the shareholders meeting, a fact which Evans acknowledged.
“You guys are also shareholders, right?” he said with a smile to Rajt. “We’ll try and do a good job, return some money, and you can use it for your business.”
About a dozen PETA demonstrators carried signs on Central Avenue near Gate 1 of Churchill Downs prior to the meeting, but had dispersed by the time the event was finished.
CDI shares closed June 18 trading at $39.97, the lowest price realized since company stock closed at $39.80 on Dec. 26, 2006, but rallied to close June 19 trading at $40.79, up 2.05%. The stock price hit a 52-week high of $57.55 on Dec. 24, 2007.