Purse Cuts Planned at CDI-Owned Tracks
A Churchill Downs Inc. official said May 7 purses at Churchill Downs in Louisville, Ky., could be cut the week of May 11, while Calder Race Course in South Florida could face another reduction in purses.
The announcement came as CDI and horsemen’s groups remain stalemated on contracts for revenue from advance deposit wagering. The conflict has led horsemen’s groups to withdraw their consent for the sending of signals, including those from Calder and Churchill.
CDI president and chief executive officer Bob Evans, during a morning conference call on first-quarter earnings for the company, indicated action is imminent. Calder already has cut purses 30% from levels published in the first condition book.
“We anticipate having to reduce purses at Churchill next week,” Evans said. “We also plan to reduce purses at Calder again.”
TwinSpires.com, the ADW service owned by CDI, performed well in the first quarter of 2008 with $61.7 million in handle and $14.1 million in revenue, company officials said. Whether the numbers hold in the second quarter remains to be seen, because TwinSpires.com currently can’t offer wagering on Calder and Churchill racing because of the dispute with horsemen.
“We’re very well ahead of the handle and revenue projections we made last June,” Evans said of TwinSpires.com, which began operating in the spring of 2007.
Evans during the conference call also commented on calls by the Thoroughbred Horsemen’s Group, which is negotiating on behalf of state and regional horsemen’s associations, for a business model that awards purses, tracks, and ADWs each one-third of pari-mutuel revenue.
“The proposed model has in our opinion one fundamental flaw—it makes our TwinSpires.com unprofitable,” Evans said.
TrackNet Media Group, operated by CDI and Magna Entertainment Corp., has said it generates more revenue for purses and tracks by increasing host fees.
Evans said TwinSpires.com would direct promotions toward signals it can offer patrons in what he called “an oversupplied market” with more than 50,000 Thoroughbred races offered each year.
Lone Star Park in Texas and River Downs in Ohio also have cut purses because of the conflict over the sending of signals and revenue for purses.
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