Even before the pandemic we knew it took a certain sense of humor to understand the business of the Thoroughbred industry. Attempting to read the tea leaves in 2020 outside in the “real” business world isn’t easy. As corporations have released their second-quarter earnings reports over the last few weeks, there have been some alarming figures. Energy giant ExxonMobil, with a precipitous drop in the price of oil and decreased demand, recently reported a loss of $1.1 billion for its quarter. And that figure was half of what was expected.
With that in mind, we guess the $118.8 million loss reported by Churchill Downs Inc. July 29 for its second quarter has to be taken in stride. A sizable loss of racing dates (along with on-track patrons), casino/gaming facility closures, and a delayed Kentucky Derby Presented by Woodford Reserve (G1) were obviously the culprits for the red ink, but that wasn’t really the news of the day.
While investing in Kentucky—Churchill Downs Inc. last year purchased Turfway Park, demolished the plant, and is constructing a new facility—the corporation apparently doesn’t feel the same way about Arlington International Racecourse in the Chicago suburbs. Bill Carstanjen didn’t directly put a fork in the racing there but did say “that land will have a higher and better purpose for something else at some point, but we want to work constructively with all of the constituencies in the market to see if there’s an opportunity to move the license or otherwise change the circumstances so that racing can continue in Illinois.”
It took a lot of back and forth, but Churchill and Illinois horsemen inked a two-year deal this summer and racing at Arlington finally got underway June 23 and will run through the end of September sans a stakes schedule. The future of the sport in the nation’s third largest city has many chapters yet to be written and will keep our Illinois correspondent Bob Kieckhefer in the chips for quite awhile.
The big play in the short-term for Churchill Downs is the Sept. 5 Derby. Usually a month out from the Run for the Roses, the talk is all about who will make the field. That’s still a good part of it, and we have revived the “Derby Dozen” for a special COVID-19 fall edition this week. Louisville native and sharp handicapper Byron King takes the reins at deciphering the nation’s most bedeviling race between now and Labor Day weekend.
Beyond who is making the starting field, a bigger question is who will be let in to watch. Carstanjen was also peppered with questions regarding attendance at the Derby during the conference call.
“We are not selling any GA (general admission) tickets right now,” Carstanjen said. “We had sold a bunch. But we have stopped selling GA. We are well under the capacity we had discussed with the governor, but we’ve stopped anyway…because we want to ensure that customers feel safe.”
The Derby is the sport’s and CDI’s main attraction. High-priced tickets for well-appointed seats, concessions, food, and hospitality, all make the event a key component to annual revenue. General admission tickets also keep the company in the black, but just how many will be allowed entry remains a mystery despite the big race being just a month out.
Amid the pandemic, CDI has been working closely with Kentucky Gov. Andy Beshear and his team regarding being able to allow patrons under the Twin Spires for this year’s race.
All we can speculate on this date is that this year’s running will be the least-attended Derby in our lifetime.
The announcement of delaying the Derby came March 16—that was a long time ago, right?—when Labor Day weekend seemed a long way off. A continued rise in COVID-19 positives in Kentucky and around the country, and travel restrictions for global participants are bigger threats to the First Saturday in September than anything else.
At present, “house parties” of more than 10 are discouraged in Kentucky by the governor’s office, so events such as the Derby and the upcoming September and October yearling sales, while having exemptions, figure to be kind of iffy. In speaking with those on the governor’s team, the term “in flux” is the phrase most often used to describe the near-term future. That can be said for most any event these days.
We’re not doubting there will be a Derby; we’re just not sure we’re ready to set an over/under on what the capacity will be.