Money for Nothing - by Eric Mitchell

 
Getting a seat at the grade I Kentucky Derby currently presented by Yum! Brands has always been tough, but getting tickets for the 2012 edition just got tougher, particularly on fans’ wallets.

Churchill Downs introduced a new policy last month requiring everyone applying for tickets online—now the only way to apply—to pay a $100 application fee. The fan then submits up to 10 different preferences for tickets ranging from $230 to $900 per seat, covering both the Kentucky Oaks and Derby days. If the fan gets tickets, then half the application fee is applied to the cost of the tickets and $50 is kept by Churchill Downs as an administrative fee. Here’s the rub: Should the fan not get tickets, Churchill Downs still keeps two Andrew Jacksons and an Alexander Hamilton.

That’s right. Fifty dollars just for the privilege of requesting and being denied Derby tickets.

Surely some other professional sports franchise has levied and justified a similarly excessive fee as a precedent for Churchill Downs’ attempt to sell this change as something besides a blatant money grab, right? Not exactly.

The New York Jets come the closest, having charged a $50 maintenance fee to the NFL franchise’s season ticket holders from 2003 through 2008, according to Jon Greenberg, executive editor of Team Marketing Report, a leading publisher of sports marketing and sponsorship information. However, the Jets have since dropped the tremendously unpopular fee. Other teams, such as the Chicago Cubs, are not charging more but are asking season ticket holders to part with their money sooner. When Cubs season ticket holders notify the team in October they are willing to commit to another year of woe, they used to have until mid-January to pay in full. Now ticket holders have to pay 10% of their ticket packages by Nov. 16.

Sports teams will continue finding new ways to wring money out of fans, but the Jets and Cubs don’t compare with Churchill Downs because their fans got something for their money. This year many Derby fans will get nothing but fleeced.

The track does have some logic behind its onerous fee. The goal is to eliminate the proliferation of tickets winding up in the hands of unscrupulous ticket brokers. In the past, brokers have hired homeless people to stand in line at the Louisville track to secure tickets. Then, when the process went solely online in 2010, many college students were in the brokers’ army, snapping up seats.

“When we went back through the purchases, you would see 15-20 people with tickets all going to the same address,” said Darren Rogers, Churchill Downs senior director of communications. “People need to understand it is a three-month process going through the requests. We have charges associated with every transaction and it is a cumbersome process.”

Besides adding the fee, Rogers said the track will strictly enforce a maximum of six tickets-per-household. So if Joe Smith is working for a broker at 123 Maple Lane, then he’ll get his six tickets and all others who applied using the 123 Maple Lane address will have their names tossed out.

“I think this will put more tickets into the hands of fans,” Rogers said. “We really feel for the customer who in the past has been sold a duplicate ticket that has already been voided when they arrive at the track or a counterfeit ticket.”

There is a group with guaranteed seats for Derby and Oaks days. It includes people who paid $3,000 to $60,000 for a personal seat license at the Louisville racetrack, season box holders, sponsors, certain VIPs, and the horsemen associated with these premier races. After that, the remaining tickets are made available through only two outlets—Churchill Downs or its partner Quint Events, based in North Carolina. As of right now, no tickets are available, Rogers said, and yet several online sites are advertising 2012 Derby tickets. StubHub.com, for example, on Oct. 8 showed available tickets ranging in price from $54 in the grandstand to a seat on Millionaires Row for $125,500.

Churchill Downs deserves credit for improving the process, but it could have done so without the $50 fee, which will hurt more fans than it will discourage inventive brokers. Also, horse racing needs as many fans as possible. Let’s not give people another reason to abandon the sport by taking their money and giving them nothing in return. At least when it happens at the betting windows, fans are being entertained at a live event and at least have an opportunity to make money.

Rogers said the market will ultimately decide the fate of Churchill Downs’ new policy. So racing fans, exercise your right as consumers and speak up.

30 Comments

Leave a Comment:

Stephie Clare

No wonder this game is in trouble.  I wonder what genius thought this up.

12 Oct 2011 3:13 PM
randy brungard

As a horse racing fan and TB Breeder who voluntarily writes articles on horse racing for local papers, this "Fee" is extremely counter-productive.

I try to promote TB racing wherever I go, but this "Fee" is insulting!!!  

We should be giving T-shirts, Hats, and stuffed horses to potential fans, not trying to "Stiff" them.

12 Oct 2011 3:33 PM
Racing Heart

Less tickets going to brokers means more tickets for fans. Can't you see that the brokers would only have jacked up the price way more than $50. I'm in, where do I apply for tickets!

12 Oct 2011 4:02 PM
Giddyup

"The track does have some logic behind its onerous fee. The goal is to eliminate the proliferation of tickets winding up in the hands of unscrupulous ticket brokers."

LMAO...In other words, Churchill Downs wants a monopoly on the extortion racket.

12 Oct 2011 5:51 PM
PomDeTerre

WHAT?  Outrageous.

13 Oct 2011 7:05 AM
Alicia McQuilkin

Honestly, props for trying to out-maneuver the scalpers, but if I was a casual fan and I had to pay $100 just to apply for tickets, I wouldn't even do it. And as a fan that follows racing, this really makes me want to put it off since I know how much of a crap-shoot it is anyway.

13 Oct 2011 9:06 AM
GoldenBroom

Thanks for crossing the derby off my life to do list with my 65 year old mother. She has always wanted to go...but throwing away money in this economy is out of the question. Shame on you Churchill! We are upper middle class too and you are cutting out the legs of your last remaining fans from under them. Can we swing it? Yes? But compare to a week at the beach, 5 days in Vegas...heck, a monthly trip to the hairdresser and manicurist for some quality time with mom...you loose. We've been lifelong horse addicts, owners, riders, and I had my stint at the track as an owner and groom. I've thrown a derby party 3 yrs in a row and have been longing to go back for the real event in person since I've gone 2x in the 90s...though not wanting infield crazy seats or the $80 crappy bleacher seats...This is Disgusting.

13 Oct 2011 9:25 AM
LcCorey33

Hey, so we are 1st timers at the derby next year and appllied for tickets a few months back ..I'm wondering if it would be better to just buy tickets at the gate ?? does anyone have any advice ??

13 Oct 2011 10:09 AM
derblin

I simply will not go along with this policy.  My derby going days at Churchill are over.  Maybe I will go to Keeneland and watch it on a big screen. Still, it wont be the same.

13 Oct 2011 1:40 PM
the artist

well friend I'll be getting my derby tickets from ebay, I guess or stubhub

13 Oct 2011 1:55 PM
deb

No wonder racing is going down.

Without the fans, there would be no sport.  Once again, only the elite will be able to attend an event.

Racing should be for everyone to come and see, first come, first serve with a price tag that everyone can afford.

Are you trying to keep regular people away?  and the young?  This will do it!  Sadly, it does me.

13 Oct 2011 2:13 PM
Convene

Sounds as if the Downs is beginning to think it's a bigger cog on the wheel than it is. I know it's a super track and it hosts many of the best races - including, of course, the Derby - but in this day, when our game is struggling, this is a pretty deadly thing to try. I'll be interested to see what the attendance figures are for the 2012 Derby Day. If they're down, maybe it's just that some people have to be hit over the head before they can see the logic of things!

14 Oct 2011 10:07 AM
dave york

Noisy bunch of comments. i am guessing none of those commenting owns a business. The costs of handling and processing tens of thousands of requests is staggering. Keeping tickets direct to fans and out of the hands of scalpers is a challenge that costs a fortune.

The cost of building the facilities at CD was a couple hundred million.  CD is a business and not a government run give away program.  They are supposed to try and make money. Those of you who have the answers for a better plan please layout the plan in writing and submit it to CD.  I am sure they would pay you nicely for a better program to handle the distribution of tickets.

 If you have noticed racing is not going down.  Attendance is up, TV ratings on the big events is up, handle on big events is up and the gross dollars spent at horse sales is up. Quit bitchin and handicap the reality of getting DERBY tickets in the hands of fans.  Reading the responses a couple of times makes a person wonder if some of these folks think they are entitled to DERBY tickets for reasons that are unclear to me.

15 Oct 2011 3:46 AM
Cris

I don't like it but I understand it. I have been behind the ticket sellers in line and they hog all the best seats and sell them for an upcharge. You can pay the track or pay the third party seller. I would rather pay the track and put these guy out of business.

15 Oct 2011 8:20 PM
Saratoga Fan

At first I thought this was a joke.  It sounds like something the "Occupy Wall Street" group should hear about.  Perhaps there should be a "Occupy the Downs" movement.

15 Oct 2011 8:48 PM
Stellar Jayne

Sounds like they are picking up tricks of the trade from Bank of America and its debit card fee!  Scalpers will not be deterred and people who have purchased from scalpers in the past will continue to do so next year and into the future.  

16 Oct 2011 12:19 AM
Sir Barton

I've never tried to get advance tickets to the Derby. Now I never will. I'll just watch it at the local OTB.

But speaking of tickets, I have two extras for the BC, if anyone is interested.

16 Oct 2011 9:41 AM
CinciMurph

Just read your opinion and as a consumer I am doing something about it.  I've been to the last 15 oaks/derbys, I go to Keeneland 8 times a year.  I go on an away trip to Fla Derby and one other annually to include Travers day or Breeders Cup.  I live in Cinci and for this years Breeders Cup I'm going down today to RIVER DOWNS and book a table for 8 for Friday and Saturday.  Oh yea and my cousin has a place for me to stay in Louisville.

16 Oct 2011 10:30 AM
Tattenham

While I appreciate the costs of ticket administration, the enforcement of the "maximum of six tickets-per-household" should reduce greatly, if not eliminate, the broker issues Churchill claims its attempting to curb with the fee.  Given the technology available today, especially now that all ticket sales are electronic, limiting the number of tickets-per-household is far more simple than charge a fee and refund half when tickets are not allocated.

16 Oct 2011 12:01 PM
depalma13

Since Churchill Downs knows exactly how many seats they have available for the event, there is no reason anyone should lose $50 by attempting to purchase tickets.  The moment the number of alloted seats available is reached, Churchill Downs should immediately stop accepting applications for tickets.  By not doing so they are breaking Kentucky law.

According to Kentucky law, it is illegal for a private company to hold a lottery.  As Dave pointed out Churchill Downs is not a government entity.  Since they are not, Churchill Downs is breaking Kentucky law by holding a lottery for their tickets.

Churchill Downs can spin it anyway they like, but the moment they take in even one application over the alloted number of tickets available, that $50 becomes nothing more than a very expensive lottery ticket.  

Pay $50 to enter to win a chance to purchase tickets to the Kentucky Derby.

16 Oct 2011 12:52 PM
Crickett Hoffman

Well, this voids the Derby off my bucket list.

There are ways to keep tickets out of the hands of scalpers, but stiffing legitimate fans is not one of them.  

I feel that there could be a lawsuit here since there is no value for the money for those who do not get tickets.  Stiff one good lawyer and it could cost them more defending their decision than it's worth.

16 Oct 2011 5:26 PM
200 lb. Jockey

$50 for nothing? That is absurd. If you are denied tickets then CD should guarantee you tickets for the next year or another future derby. That might not make everyone happy, but it is at least fair. If they are unwilling to do that then it is obvious that this is just a money grab. How many people who are denied tickets would be willing to go through that process again? Very few, if any.

17 Oct 2011 2:02 PM
Susan from VA

The only time when I throw money away on horse racing is when I bet!  And I do that only because I think I might get a payoff!  I've never wanted to be part of the drunken infield party, but I've always wanted to attend the Derby and sit in the grandstand.  I guess I'll never go to the Kentucky Derby, because I really resent having to pay $50 for the privilege of not getting tickets.  Anyway, I can see the finish better on my television at home.

19 Oct 2011 12:17 PM
Catbird

I understand the business reasons of Churchill Downs' actions, but there is also the public relations impact of what is being done.  TERRIBLE PR.  Not worth it.  Find another way to defeat the hawkers.

The more I think of it, the more I just shake my head at the blindness of it.  With 'friends' like that promoting racing, we don't need enemies.

19 Oct 2011 12:47 PM
BN

While I can understand the reasoning behind what CD is doing... it looks like my dream of going to the Kentucky is going to remain a dream. Lump me in with all the rest of the people who just can't afford to throw away $50 and not get anything back for it. Drive to KY with a friend and find the cheapest hotel available for a few nights yes... but flush $50 down the toilet? Sorry. I just don't make that much.

19 Oct 2011 6:09 PM
Bellwether

THINK ITS A JOKE???...CDI & STRONACH CROWD R A JOKE TOO!!!...ty...

24 Oct 2011 5:03 AM
furlongs

Churchill Downs is the worse run business in America it always has been, I live in Louisville and the place is a absolute joke. Why this suprises anyone is beyond me. Horseracing is in decline not because of fans interest but because of the people who run racing in America. It doesn't take much to make a fan find another "game" when they want some action because of bonehead things such as this. Horseracing was the only legal "game" in town in 95% of this country for a number of years and now it is not. Looks like they still think they are the only game in town the way they continue to treat there fans.

24 Oct 2011 11:59 PM
Drlaw

The thing that is most disturbing about this debacle is...There is  box to check to pay "20% up charge to have your order prioritized"  That 20% above  the cost of the tickets....Thats 20% above face value!! By every imaginable definition...Thats TICKET SCALPING!  Ticket scalping is illegal in Ky.  Every order they process and take in 20% over the cost of the tickets...they break the law.  And, since its against the law, they  don't pay taxes!!

29 Nov 2011 5:36 PM
Drlaw

Any favorable comment towards this absurdity is obviously from a CD employee.  Embarrassment to the Louisville, the state of Ky and to thoroughbred racing.

30 Nov 2011 3:55 PM
bsmitherson

dave york, your comment talks about the PAST this is the FIRST year they are ripping us off.

Second, the $50 to process is one thing, but $50 even if you DONT get a ticket is a sham!

I want to know if anyone has contacted a lawyer or knows a lawyer to do a group litigation. CHD should be made an example of because they are taking advantage of the consumer!

20% to have a chance at getting tickets OR lose $50 because it's EASY to just have CHD say "NO" you didnt get tickets so we are keep $50.

please pass a phone number of an attorney.

08 Mar 2012 1:25 PM

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