Brilliant moves by Churchill

[philcski]

Originally Posted by Cannon Shell

Phil you know this sentence is not exactly true.

CDI conveniently trots this out whenever they do something that will piss people off like their hands are tied because of shareholders. While Fiduciary responsibility is a part of every publicly traded companies accountability, the idea that free programs for the backside or a few hundred comped seats on a day when 150k people will be there has zero to do with shareholders. Management has a lot of leeway on day to day business decisions and pricing. This has far more to do with intentionally alienating the racing industry to the point where the backlash allows them to feel free to slash racing to the absolute bare minimum and eventually sell off or eliminate it completely. Except of course the Derby/Oaks weekend.

People mistakenly believe that because of the name "Churchill Downs" the company is a racing company. They might as well be named Acme Gaming. They have decided that instead of trying to grow the racing product, they will just squeeze it for every drop of blood and then dump it when the politicians are desperate.

Let's say they hold back 1,000 seats for owners and trainers on Derby Weekend. Got to be clubhouse 300's at minimum, as though not to offend a guy like Porter, right? Those seats are almost $1,000 for the two days. That's a million bucks of lost revenue. You know what a million bucks is to CD's CEO? 2% of Net Income in 2013. Let's just say that correlated 1:1 to the stock (which it's often magnified, but for argument's sake)... 2% is a difference of $30 million to the market cap.

I've said it before and I'll say it again... they don't have people who understand racing and gaming in place, they have knucklehead MBA's who see everything as an asset or liability on the balance sheet and P&L on the income statement. Not saying it's right, but that's what they're doing.