Record Revenues for Churchill Downs in 2014 but...

[Augenj]

Also on the racing side, CDI said Fair Grounds Race Course & Slots revenues declined $2.1 million for the year, Churchill Downs racetrack had losses outside of Oaks-Derby week, and Arlington Park revenues declined. CDI blamed the Fair Grounds losses on a decreased number of turf races, the Arlington decline on increased simulcast competition, and the Churchill decline on smaller field sizes.

Smaller field sizes or a boycott? ;)

Record Revenues for Churchill Downs in 2014 (http://www.bloodhorse.com/horse-racing/articles/90344/record-revenues-for-churchill-downs-in-2014?source=rss)

[OTM Al]

Also on the racing side, CDI said Fair Grounds Race Course & Slots revenues declined $2.1 million for the year, Churchill Downs racetrack had losses outside of Oaks-Derby week, and Arlington Park revenues declined. CDI blamed the Fair Grounds losses on a decreased number of turf races, the Arlington decline on increased simulcast competition, and the Churchill decline on smaller field sizes.

Smaller field sizes or a boycott? ;)

Record Revenues for Churchill Downs in 2014 (http://www.bloodhorse.com/horse-racing/articles/90344/record-revenues-for-churchill-downs-in-2014?source=rss)

Doesn't really matter. Record Revenues for the company. You think the "boycott" is bothering them one bit?

[Augenj]

Doesn't really matter. Record Revenues for the company. You think the "boycott" is bothering them one bit?
Knowing bean counters as I do..... yes. :D

[acorn54]

i think the boys at woodbine racetrack did some intelligent research on the correlation of field size of horseraces and pool volume and saw a direct correlation.
of course a business only cares about its net profit and right now it seems churchill has a hodgepodge of things going on bringing in revenue and causing losses. we will have to see how things pan out for the future when the dust clears. i am sure horserace betting activities would be phased out if they conclusively showed a consistent loss for the churchill operations. after all they are not a charitable operation.

[AndyC]

Also on the racing side, CDI said Fair Grounds Race Course & Slots revenues declined $2.1 million for the year, Churchill Downs racetrack had losses outside of Oaks-Derby week, and Arlington Park revenues declined. CDI blamed the Fair Grounds losses on a decreased number of turf races, the Arlington decline on increased simulcast competition, and the Churchill decline on smaller field sizes.

Smaller field sizes or a boycott? ;)

Record Revenues for Churchill Downs in 2014 (http://www.bloodhorse.com/horse-racing/articles/90344/record-revenues-for-churchill-downs-in-2014?source=rss)

Are you giddy because CDI is reporting increased profits? If the boycott continues I may have to buy some stock.

[duncan04]

Knowing bean counters as I do..... yes. :D

No it doesn't bother them at all. Racing is secondary to them. They are making profits and that is all that matters to them. If you think any boycott is bothering them, I have some oceanfront property in Arizona I'd like to see you.

[AndyC]

Knowing bean counters as I do..... yes. :D

At the end of the day CDI has more beans then they started with and isn't that the object of being in business?

[duncan04]

Revenues for CDI were $812.9M in 2014, up four percent over 2013; racing rev down 5%; casino rev up 11%; twinspires rev up 3%.

Revenue at Churchill Downs racetrack was up 8% vs. 2013; while rev was down 6% at AP, down 47% at CRC, and down 5% at FG.

From @drfhegarty on twitter earlier

[Augenj]

At the end of the day CDI has more beans then they started with and isn't that the object of being in business?
I worked in large corporations and sat in many meetings over the years. Every facet of the business is looked at for improvement. The "small field sizes" at Churchill is nothing but a red herring. Somebody there is evaluating the decrease, even if it means they want to shed this part of their business so the fat cats can get even fatter.

[AndyC]

I worked in large corporations and sat in many meetings over the years. Every facet of the business is looked at for improvement. The "small field sizes" at Churchill is nothing but a red herring. Somebody there is evaluating the decrease, even if it means they want to shed this part of their business so the fat cats can get even fatter.

I am missing your point. Do you think that CDI hasn't looked at the issue of take-out percentages and there overall affect on business?

The way fat cats get fatter is by having a profitable business. Having a profitable business means having customers that want to buy your product. Is there a reason someone would want to carry on an unprofitable business that really doesn't look like it has a future?

[Augenj]

I am missing your point. Do you think that CDI hasn't looked at the issue of take-out percentages and there overall affect on business?

The way fat cats get fatter is by having a profitable business. Having a profitable business means having customers that want to buy your product. Is there a reason someone would want to carry on an unprofitable business that really doesn't look like it has a future?
My guess is that the CEO thought raising the takeout would mean more revenue/profit. That turns out to not be the case as we all know. Now he has a choice to keep things as they are and continue a revenue/profit decline or reduce the takeout and possibly make more revenue/profit. My guess is he's unwilling to admit his mistake because of ego and revenue/profit will continue to decline. Some on this board have said that this has been his intention all along in order to be able to reduce racing at CD except for the Derby weekend. All he has left then is high margin divisions of his business, assuming this is his "grand scheme".

[Fingal]

No it doesn't bother them at all. Racing is secondary to them. They are making profits and that is all that matters to them. If you think any boycott is bothering them, I have some oceanfront property in Arizona I'd like to sell you.


Churchill is Churchill in name only, might as well change their name to the Kentucky Casino Corp.

Why did they tell Stronach he could have Calder but they got to keep the casino revenue ?

Why did Churchill buy Hollywood Park ? It was in the hope California racetracks would get slots but when the Indian Lobby defeated that ballot initiative couldn't wait to get rid of HP to anyone making an offer.

Why did Churchill let the Fairgrounds become a dump before they were forced to make some improvements ?

Churchill would LOVE to get rid of Arlington but when CDI bought it they gave Duchossois so much stock it'd be virtually impossible to buy him out.

Other than the brand recognition they get from Derby & Oaks week, Churchill could give a rat's patootie about racing.

[duncan04]

Churchill is Churchill in name only, might as well change their name to the Kentucky Casino Corp.

Why did they tell Stronach he could have Calder but they got to keep the casino revenue ?

Why did Churchill buy Hollywood Park ? It was in the hope California racetracks would get slots but when the Indian Lobby defeated that ballot initiative couldn't wait to get rid of HP to anyone making an offer.

Why did Churchill let the Fairgrounds become a dump before they were forced to make some improvements ?

Churchill would LOVE to get rid of Arlington but when CDI bought it they gave Duchossois so much stock it'd be virtually impossible to buy him out.

Other than the brand recognition they get from Derby & Oaks week, Churchill could give a rat's patootie about racing.

Does this surprise anyone? Everyone is claiming racing is dying. Casino gambling is doing well. Don't have to pay anything out of pocket before hand to play any casino game like you do with racing. CDI is all about their shareholders now and raking in the money from the casinos

[AndyC]

My guess is that the CEO thought raising the takeout would mean more revenue/profit. That turns out to not be the case as we all know. Now he has a choice to keep things as they are and continue a revenue/profit decline or reduce the takeout and possibly make more revenue/profit. My guess is he's unwilling to admit his mistake because of ego and revenue/profit will continue to decline. Some on this board have said that this has been his intention all along in order to be able to reduce racing at CD except for the Derby weekend. All he has left then is high margin divisions of his business, assuming this is his "grand scheme".

If lowering the takeout was the panacea for all of racings problems every track would immediately reduce the rates. Can you name a US track that has increased their bottom line do to a rate reduction? Just increasing handle doesn't mean an increase in profit.

[AndyC]

Does this surprise anyone? Everyone is claiming racing is dying. Casino gambling is doing well. Don't have to pay anything out of pocket before hand to play any casino game like you do with racing. CDI is all about their shareholders now and raking in the money from the casinos

What should CDI be about if not their shareholders?

[Augenj]

If lowering the takeout was the panacea for all of racings problems every track would immediately reduce the rates. Can you name a US track that has increased their bottom line do to a rate reduction? Just increasing handle doesn't mean an increase in profit.
Can you name me a track that has lowered the takeout? In Las Vegas, they lowered the slot takeout and increased their profit exponentially due to churn by the gamblers. Horse racing isn't slot machines but lowering the takeout by 1 point each year and comparing that with the previous year's profits might open some eyes. When the profit declines from lowering it 1 point, raise it back to where it was the year before. That would be the optimum takeout rate. Not my original idea but it sounds good to me.

[1st time lasix]

I haven't played Churchill since thet raised the take. Used to play them their entire meet. There are other options in the simulcast era

[whodoyoulike]

Why are the re-quoted posts blank?

Or, is it just my viewing?

[PaceAdvantage]

If you're getting a blank post when trying to quote, then you're changing something within the quote and/or adding tags by mistake...

[duncan04]

What should CDI be about if not their shareholders?

I'm not saying they shouldn't.

[AndyC]

Can you name me a track that has lowered the takeout? In Las Vegas, they lowered the slot takeout and increased their profit exponentially due to churn by the gamblers. Horse racing isn't slot machines but lowering the takeout by 1 point each year and comparing that with the previous year's profits might open some eyes. When the profit declines from lowering it 1 point, raise it back to where it was the year before. That would be the optimum takeout rate. Not my original idea but it sounds good to me.

Normally that would sound like a great idea but when the horsemen get a fixed percentage and the government gets a fixed percentage the only one taking a percentage decrease is the track. It is quite different when talking about slot machines.

It could be that CDI has found the optimum rate. Of course what is optimum for them might seem bad to some bettors.

[Augenj]

Normally that would sound like a great idea but when the horsemen get a fixed percentage and the government gets a fixed percentage the only one taking a percentage decrease is the track. It is quite different when talking about slot machines.

It could be that CDI has found the optimum rate. Of course what is optimum for them might seem bad to some bettors.
CDI hasn't tried lowering the rate so it can't be "optimum". How about each of those parties you mentioned giving up 1/3 point? I'm quite sure they'll all agree to that. :D No wait. :lol:

[Grits]

What should CDI be about if not their shareholders?

If Apple thought it in their best interest to be about their shareholders before their products? Its quite possible they wouldn't be where they are today.

Whether one's selling widgets, phones, computers, or horse racing doesn't matter. Product and services make success. CDI is the exception. It has been successful due to greed and...maybe the ability to diversify. JMO

[duncan04]

Why can't people understand CDI is going in another direction? As a business they need to find profitable ventures? Horse racing isn't that. Maybe one day they will get back to it. But if you owned a corporation you'd do the same thing.

[Grits]

Don't underestimate everyone here, its well understood that CDI wants out. That they're going in other directions. Seriously, it has been understood for quite some time. Kinda like the elephant in the room.

[AndyC]

If Apple thought it in their best interest to be about their shareholders before their products? Its quite possible they wouldn't be where they are today.

Whether one's selling widgets, phones, computers, or horse racing doesn't matter. Product and services make success. CDI is the exception. It has been successful due to greed and...maybe the ability to diversify. JMO

Making great products and selling them at a good profit IS BEING ABOUT THE SHAREHOLDERS? Isn't making a profit the best thing for shareholders? And isn't the best way to make a good profit selling good products?

I don't see how working for the owners has to be mutually exclusive from providing a product that the customers want.

[whodoyoulike]

If you're getting a blank post when trying to quote, then you're changing something within the quote and/or adding tags by mistake...

It must have just been me. I was getting a blank post viewing other people's posts. It's fine now, even the ones on the first page. I did re-sign in and exited out of Google.

[duncan04]

If Apple thought it in their best interest to be about their shareholders before their products? Its quite possible they wouldn't be where they are today.

Whether one's selling widgets, phones, computers, or horse racing doesn't matter. Product and services make success. CDI is the exception. It has been successful due to greed and...maybe the ability to diversify. JMO

Everyone is saying horse racing is dying. Can't get younger people interested. CDI realizes that. Puts racing on back burner. They are focusing on other stuff knowing that. Only good day for them is Derby day.

[Grits]

CDI, unfortunately, neither makes a great product nor are they selling a great product.

They're a joke the other 363 days of the year. They nail the bettors seven ways to Sunday, not caring whether what they offer is acceptable or not. Its all about THEM/THEIR OWN PROFITS. Its not about thoroughbreds and its certainly not about bettors. .... At this point, most don't care what they do with their product.

I'm sorry, EOC.

[whodoyoulike]

Making great products and selling them at a good profit IS BEING ABOUT THE SHAREHOLDERS? Isn't making a profit the best thing for shareholders? And isn't the best way to make a good profit selling good products?

I don't see how working for the owners has to be mutually exclusive from providing a product that the customers want.

I recall Corporations used to publish their CREED which in essence was:

Customers, Employees and then Shareholders.....

Was that just all talk?

[OTM Al]

I recall Corporations used to publish their CREED which in essence was:

Customers, Employees and then Shareholders.....

Was that just all talk?

Yes. Nothing has changed. We just have more info available to us and now have no excuse for not knowing better.

[duncan04]

I recall Corporations used to publish their CREED which in essence was:

Customers, Employees and then Shareholders.....

Was that just all talk?

Didn't know racing was about the customer. It sure doesn't see like it. Why get mad at CDI when all of racing is all about themselves?

[whodoyoulike]

Didn't know racing was about the customer. It sure doesn't see like it. Why get mad at CDI when all of racing is all about themselves?

It's just that long-term successful businesses in general should keep that credo in mind.

I wasn't talking just about racing. I think CDI in their last take-out increase went from 16% to 19% for WPS and from 22% to almost 25% for exotics which is why I'm kinda "mad".

It's been almost a year so my %'s may be off.

[AndyC]

CDI, unfortunately, neither makes a great product nor are they selling a great product.

They're a joke the other 363 days of the year. They nail the bettors seven ways to Sunday, not caring whether what they offer is acceptable or not. Its all about THEM/THEIR OWN PROFITS. Its not about thoroughbreds and its certainly not about bettors. .... At this point, most don't care what they do with their product.

I'm sorry, EOC.

Give an example of a track that CDI should try and copy as a business model. The fact of the matter is that CDI has a changing customer base. They can be like Radio Shack and hang on to the past or they can embrace the future and new endeavors and move forward.

[DeanT]

CDI's profits were down 16% in 2014 for a number of reasons. They are in the annual review, and mainly are due to gaming and other extraneous factors.

For racing, Twinspires was up 3% for handle growth, which was below last year's 6.2%, and well below the double digit increases the past few years (for both them, and TVG).

As predicted by everyone, Derby revenues were up, due to increased takeout and on track revenues. This increase was harmed by decreased revenues for the rest of the meet. That was also predicted by most (increased prices/takeout on regular races, less handle was at a percentage worse than the takeout hike was). The best analogy I have seen is, jacking ticket prices for a World Series game seven will result in higher revenues, but higher ticket prices for the other 162 games can sting. Pretty basic what happened, and as I said, everyone predicted that.

In 2013, Churchill had gaming revenues outstrip horse racing revenues for the very first time; being a so called "gaming company". So, I am not sure they care much that their handle was down, and revenue was down from handle outside Derby week. For tracks that do care about handle, we can all hope they don't raise their takeout and get stung like the Churchill meet did.

[AndyC]

Didn't know racing was about the customer. It sure doesn't see like it. Why get mad at CDI when all of racing is all about themselves?

No business is just about the customer. Its about providing goods and/or service to a customer at a price the customer is willing to pay that will provide a profit to the business. If either part of the equation is not working the business model is broken.

[Jeff P]

Give an example of a track that CDI should try and copy as a business model. The fact of the matter is that CDI has a changing customer base. They can be like Radio Shack and hang on to the past or they can embrace the future and new endeavors and move forward.

Kentucky Downs anyone?

Just before the 2013 meet, The Blood-horse ran an article titled Kentucky Downs Touts Low Takeout Rates:
http://www.bloodhorse.com/horse-racing/articles/80240/kentucky-downs-touts-low-takeout-rates?source=rss

A Kentucky Downs release said the 18.25% takeout on exacta wagers is the lowest in North America. The track will have a 14% takeout on its new Pick 5 bet, with a takeout rate of 16% on win, place and show wagering. There will be a 19% takeout on exotic wagers other than the exacta and Pick 5.

"Kentucky Downs offers some of the best betting value anywhere," Jeff Platt, president of the Horseplayers Association of North America, said in the Kentucky Downs release. "Exacta takeout is the lowest in North America. Combine that with a 19% takeout on other exotic bets and great average field size, and I am not surprised that the handle trend is up."

"HANA's recognition of our product offering means a great deal, because we want Kentucky Downs to be known as the 'horseplayers' racetrack,'" Kentucky Downs president Corey Johnsen said in the release. "Providing value to the betting public drives every decision we make. Our goal is to present quality racing run over a safe, consistent race course with an attractive takeout structure and wagering menu."


Then, oddly enough, after the meet was over, DRF ran an article titled Kentucky Downs handle, purses soar at five-day meet:
http://www.drf.com/news/kentucky-downs-handle-purses-soar-five-day-meet

Horseplayers showed their enthusiasm for the big fields and purses offered this fall at Kentucky Downs, with all-sources wagering surging past $12.8 million, an increase of nearly 70 percent over 2012. Handle on the 13-race Wednesday finale alone was $3,371,476, an all-time single-day record for the south-central Kentucky track and more than double what was handled on the corresponding date last year.

Kentucky Downs paid out more than $4.1 million in purses, or more than $820,000 per day and more than double what was paid out during a five-day meet in 2012. The purses were fueled in large part by the Instant Racing video machines that have been operational at the facility for two years. Field size for the 50-race meet was 9.96 horses per race, and takeout ranged from 14 to 19 percent on exotic wagers.

"We were proud to offer quality racing with a low takeout, and horseplayers responded with record handle,” track president Corey Johnsen said in a media release. “We had top-quality horses, trainers and jockeys from all over the country."




-jp


.

[Augenj]

"We were proud to offer quality racing with a low takeout, and horseplayers responded with record handle,” track president Corey Johnsen said in a media release. “We had top-quality horses, trainers and jockeys from all over the country."

Irrefutable. :ThmbUp:

[duncan04]

"We were proud to offer quality racing with a low takeout, and horseplayers responded with record handle,” track president Corey Johnsen said in a media release. “We had top-quality horses, trainers and jockeys from all over the country."

Irrefutable. :ThmbUp:

That's what happens when you have that short of a meet. Plus they have instant racing machines down there bringing in the money as well.

[AndyC]

Kentucky Downs anyone?

Just before the 2013 meet, The Blood-horse ran an article titled Kentucky Downs Touts Low Takeout Rates:
http://www.bloodhorse.com/horse-racing/articles/80240/kentucky-downs-touts-low-takeout-rates?source=rss



Then, oddly enough, after the meet was over, DRF ran an article titled Kentucky Downs handle, purses soar at five-day meet:
http://www.drf.com/news/kentucky-downs-handle-purses-soar-five-day-meet






-jp


.

So the model should be this track? With $12.8 million in handle and using a blended takeout rate of 17% there was $2,170,000 taken out. With purses being $4,100,000 the racing was running at a huge deficit. I think this business model is already in play at just about every track in the US.

No wonder it is a 5 day meet. They couldn't fund the races for more days than that even with the video game revenue.

[Augenj]

Churn, baby, churn!

It works like this. Vegas took a gamble and drastically reduced the takeout on slots a long time ago since the revenue from them was so low anyhow. People started winning more and poured their winnings back into the slots (churn). Slot revenue went up, table games went south, and slots (in all their various forms) were and are king.

Slots are an accelerated form of horse racing. The more the horse bettors get back, the more they bet (churn). The track takeout may be reduced on each bet but bettors make more and larger bets with their winnings. This increases the total revenue for the track since they get a piece of each bet. Successful newer wagers such as Pick 5's demonstrate how attractive lower takeout is to bettors. On the other hand, CDI increased takeout and revenue went down.

Slots are different than horse racing? Bettors are bettors are bettors. Start off with a one point reduction on all bets. It will invigorate horse racing and the bean counters will be happy too.

Churn, baby, churn! ;)

[OTM Al]

This meet is fantastic and did great getting a record 3.3 million on one day, yet Aqueduct is garbage and should be gotten rid of because they only brought in 5.2 million one day. Clearly takeout and field size means so much.

To be honest, I do like this meet and would like to see it in person at some point. But please be honest. It has a lot of low end races. The camera work and picture on the simulcast makes it almost unwatchable. This meet is not the example it is being made to be.

[JustRalph]

Moral victory=Churchill received no revenue from me last year