Churchill will buy, rebuild Turfway

[Kasept]

Churchill Downs Incorporated Announces Agreement to Acquire Turfway Park

LOUISVILLE, Ky., Oct. 03, 2019 (GLOBE NEWSWIRE) -- Churchill Downs Incorporated (“CDI” or “the Company”) (Nasdaq: CHDN) announced today that, through its wholly-owned subsidiary NKYRG, LLC (“NKYRG”), it has signed a definitive agreement to acquire Turfway Park in Florence, Kentucky from Jack Ohio LLC, an affiliate of JACK Entertainment LLC (“JACK”) and Hard Rock International for total consideration of $46 million in cash, subject to certain working capital and other purchase price adjustments.

The closing of the transaction is contingent upon approval by the Kentucky Horse Racing Commission (“KHRC”). The KHRC has scheduled a meeting for October 8th and, if the change of control is approved, the parties expect to close the transaction shortly thereafter.

Subject to KHRC approval, the 2019-2020 winter Thoroughbred racing meet at Turfway Park will be conducted on racing dates previously awarded to Turfway Park for December 2019 and in accordance with the schedule of racing dates submitted by JACK to the KHRC for 2020. Upon receiving approval for the change of control, CDI will not pursue its previously announced New Latonia Racing & Gaming project in northern Kentucky and will withdraw its New Latonia race dates application with the KHRC.

Immediately after closing, CDI will commence planning for the demolition of the existing grandstand after the 2019-2020 meet, making way for development of Turfway Park Racing & Gaming (“New Turfway Park”), an up to $150 million (including today’s announced purchase price) state-of-the art live and historical Thoroughbred racing facility.

“We are thrilled to welcome Turfway Park to the Churchill Downs racing family,” said Kevin Flanery, President of Churchill Downs Race Track. “Our team is poised to restore Turfway to its former glory, anchored by northern Kentucky’s first historical racing machine facility. The result will be a first-class racing product fueled by increased purses that keeps high-quality horses in Kentucky year-round and appeals to horseplayers nationwide.”

New Turfway Park is anticipated to support up to 400 direct full and part time equivalent positions and create an estimated 800 direct construction jobs. The project will include a historical racing machine facility featuring up to 1,500 machines, a state-of-the-art clubhouse, food/beverage venues and a new inner dirt track to complement the existing one-mile synthetic main race track.

The transaction is structured as an acquisition of all of the outstanding equity of Turfway Park, LLC and the $46 million acquisition price will be funded with cash from CDI’s balance sheet. Of this amount, $36 million (subject to certain working capital and other adjustments) will be paid to JACK and will be capitalized on CDI’s balance sheet. The remaining $10 million will be paid to Hard Rock and will be expensed.

[Konk]

If they want year round racing, why not just keep CD open?
Why screw around with a perfectly good track and probably ruin it?

Is it in writing anywhere that once demolished, it be rebuilt?
Arlington Park, Part II?

[Kasept]

Originally Posted by Konk

If they want year round racing, why not just keep CD open? Why screw around with a perfectly good track and probably ruin it?

Is it in writing anywhere that once demolished, it be rebuilt?
Arlington Park, Part II?

Northern Kentucky/Cincinnati is a substantial racing market with a long history. It's not a perfectly good track. It desperately needed a freshening and the mechanics for the Historic Horse Racing machinery is in place to warrant investment as Churchill's previously announced incursion ("New Latonia") indicated.

Kentucky is not Illinois. The HHR provisions are thoroughly tied to the racetracks (Kentucky Downs, Red Mile, Ellis, etc.).

[-BT-]

I find it comical these guys dig deep in their pockets to shell out the money to buy a place like Turfway Park, but can't even apply for a casino/historical racing machine license on behalf of a property they already own, because it will tamper with their Rivers Casino investment 10 miles away.

As someone who has been to the last 19 Derby's, this acquisition will cost us patrons even more at the turnstyles and the concession stands, awesome. All the while i get to watch, probably the nicest track in the country go dormant. Greed at it's finest.

-bt-

[freddymo]

Originally Posted by -BT-

I find it comical these guys dig deep in their pockets to shell out the money to buy a place like Turfway Park, but can't even apply for a casino/historical racing machine license on behalf of a property they already own, because it will tamper with their Rivers Casino investment 10 miles away.

As someone who has been to the last 19 Derby's, this acquisition will cost us patrons even more at the turnstyles and the concession stands, awesome. All the while i get to watch, probably the nicest track in the country go dormant. Greed at it's finest.

-bt-

Capitalism sucks

[Konk]

It's not a dump when you bet off site.
What percentage of their customers actually go there?

[Kasept]

Originally Posted by Konk

It's not a dump when you bet off site.
What percentage of their customers actually go there?

Several years ago they enjoyed a highly successful 'Friday Date Night' promo that got them tabbed by either Cincinnati magazine or the Enquirer as the best night out value in the Tri-State. It produced very nice crowds for an extended period.

A rebuilt Turfway will be a big hit. Occurs too that the Battaglia-Jeff Ruby Steaks will be heavily supported as a Derby prep avenue as a result of this development.

[tywizard]

As someone who lives minutes from Turfway I want this to succeed (and think it will).

But a nicer facility doesn’t mean it suddenly becomes a more important stop on the Derby Trail. What am I missing there? Less than ideal timing and still contested over Poly.

[Kasept]

Originally Posted by tywizard

As someone who lives minutes from Turfway I want this to succeed (and think it will).

But a nicer facility doesn’t mean it suddenly becomes a more important stop on the Derby Trail. What am I missing there? Less than ideal timing and still contested over Poly.

Expect purse (and Derby points) will increase. Wouldn't be surprised if some kind of Ruby/Derby bonus materializes, etc. With all the surface switching that goes on these days, I don't think the Synthetic is a deterrent/hindrance.

[Kasept]

KHRC ok’s CDI Turfway plans

Purses to double; added inner dirt track could be option for Ruby..

https://www.bloodhorse.com/horse-rac...hurchill-downs

[tanner12oz]

I didn't think turfway was that bad..I know they have weird flea market like events there but it was in 2000x better shape then pimlico

[philcski]

Note at the bottom about the dates is bothersome to me. There's an easy solution: run some 7 and 7 days (or 8 and 8 days!), 7 dirt races at Ellis and 7 turf races at Kentucky Downs. Like they used to do in Ohio back in the day. The bettors loved it- action on the same circuit every 15 minutes.

[Alydar]

The problem the way I see it is that Churchill is now a casino operator first and aside form the Derby horse racing is a secondary concern at best. I can't blame them, they are a publicly owned company that needs to show its shareholders as good a return as possible. As anybody who follows the industry knows, there are better investments out there than a horse racing track. Just ask Frank Stronach. What some tracks can offer is a gateway to other gaming, which clearly what is going on here. Bottom line is, what is good for Churchill is not necessarily good for horse racing.

The Turfway purchase is all about historical racing and the revenue derived from the Cincinnati market. Will the track benefit from it? In the short term yes, long term I am doubtful. Just look at Calder, Hollywood and now Arlington. As gaming laws become more permissible, it is likely that Turfway as a racing venue may be just a found memory.

[Alydar]

https://www.paulickreport.com/news/t...rlington-park/

Worth a read, and something that anyone that Churchill takes over should be aware of the potential issues down the road.

Churchill bought the crown jewel of Illinois racing and is slowly killing it, like Calder, Hollywood and others.