Published>Wed, Apr 28 10 12:28 AM
Up to 20 horses will vie to win the Kentucky Derby on Saturday, and the chief executive of Churchill Downs Inc expects sponsorship revenue and wagering on the industry's most popular race to be rosier than last year's recession-hit results.
The 136th running of the storied horse race at the Churchill Downs track in Louisville, Kentucky, comes at a time when the industry has seen wagering decline, but Robert Evans's company has worked to diversify into casino gambling and entertainment like music festivals.
However, the first Saturday in May, when the Kentucky Derby as well as the Kentucky Oaks race for fillies are held, remains a major focus for the company.
"People have to keep in mind that last year was exceptionally weak," the CEO said in a telephone interview. "In economic terms, I would think when we tally it up we'll have done better on sponsorships than the previous year."
Evans said reserved seating for the Derby is essentially sold out, while general admission is always weather-dependent.
Analysts have said wagering on the Derby fell 9 percent last year, but the company does not disclose detailed attendance or wagering figures.
Evans thinks betting on this year's race will at least outperform the still-struggling industry.
"My guess is the industry is down about 10 percent through March compared to last year," he said. "The Oaks and Derby will do better than that, but it's very dependent on how the race actually sets up that day."
Many will watch on television to see the outcome.
TV viewership for the "Run for the Roses" hit a 20-year high last year when 16.3 million tuned in for the Derby, the most since 18.5 million in 1989. NBC officials said it is one of only three major sports events, along with the Winter and Summer Olympic Games, that draws more women viewers than men.
This year, Churchill Downs added a food event to further strengthen the Derby brand. The track will also host the company's first major music festival -- HullabaLOU -- in July in what could be the first of many such events.
"We're good at large, live entertainment events," Evans said. "Things like music festivals; you'll see some other stuff from us in the food, fashion kind of genres. Most of that will get announced later this summer."
He said Churchill Downs would be happy if its entertainment unit grew into a business that hosts up to 10 such events annually -- not necessarily at one of its four tracks -- that "would all be multimillion-dollar revenue and hopefully multimillion-dollar EBITDA producers."
Meanwhile, the company expects a casino it opened in January at its Calder track in Miami to hit a target for an annual gross gaming revenue rate of $80 million to $100 million in another few months.
Churchill Downs, whose 2009 revenue rose 2 percent to about $440 million, also has a casino at its Fair Grounds track in Louisiana but lacks them at its namesake track in Louisville and at Arlington Park outside Chicago, and has warned that the economics for the sport do not work without casino gambling.
"If you don't have a casino nearby, you're going to suffer over the next three, five, seven years," Evans said.
He remains optimistic that Churchill Downs can close its $126.4 million acquisition of online wagering site Youbet.com Inc in the second quarter.
Evans said the company would love to host the Breeder's Cup championship races permanently, as that group's board is weighing ending rotating the host sites. However, he added that Churchill Downs is not campaigning for such a move and even a favourable decision would not be significant financially.
Source: Web Search
0 comments:
Post a Comment