Quote:
Originally Posted by ubercapper
I think you're missing something here and that is cash flow and growth from HHR. CDI is buying Colonial and the Rosie's establishments which they can grow in Virginia (adding more HHR terminals) but that requires for every 100 machines added an additional race day per year so likely another 10 to 30 days at Colonial annually.
Then they just spent $79 million in cash for Ellis Park because of the HHR facility (which they can expand) and are opening a satellite HHR/Simulcast Facility in Owensboro which will bring in millions per month.
Some of that has to go to purses and there's no decoupling possible in Kentucky so along with Turfway, Ellis Park and Churchill there's going to be a strong year round racing circuit in the stated owned by CDI, plus of course Keeneland and Kentucky Downs. In the end, no winding down of CDI's horse racing holdings in these two states whatsoever because they drive shareholder value through HHR.
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Your thesis depends on the fact that decoupling does not come into reality. How did that work out in Florida?
The $79M in cash made CDI a corporate raid target to gain access to the capital. Buying Ellis Park moves the cash off the books, allows CDI more direct control over the Kentucky racing calendar, and drives the circuit down to three tracks with two owners which is much easier to shrink to two tracks.
For those who think I have this wrong, I understand. But answer just one question : name one racetrack acquisition by CDI which has been a long term success for racing.
