10/06/2010 9:11AM

Churchill dissolves entertainment unit


Churchill Downs Inc. has abandoned its efforts to build a live-concert business at its racetracks and will cut 64 people from its account-wagering operations, the company said in government filings and a press release on Wednesday.

The company will dissolve a business unit, Churchill Downs Entertainment, that was formed last year to explore ways to use its four racetracks as hosts for festivals and concerts, Churchill said in the Wednesday release. Steve Sexton, a former general manager of Churchill and Arlington who was appointed head of the business unit, has resigned, according to the company.

The business unit’s first major project was the three-day HullabaLOU concert festival, held this summer at Churchill Downs. Advance ticket sales were well below expectations, and walk-up attendance was hurt by summer temperatures that exceeded 100 degrees on all three days. Earlier this year, Churchill chief executive officer Bob Evans said the festival, which had total attendance of approximately 78,000, lost about $5 million.

HullabaLOU will not be held in 2011, Churchill said in the release, though it “may return in future years once the economy and the live-music business in the U.S. have fully recovered.”

Churchill also said in filings with the Securities and Exchange Commission that it planned to cut 64 jobs from the staff at twinspires.com and Youbet.com, the two account-wagering platforms that the company operates. The cuts will require $1.2 million in severance costs, but Churchill said that it expects to pare $12 million in annual costs from the operation as a result of the cuts and other moves.

Churchill purchased Youbet.com earlier this year, in a transaction valued at approximately $130 million. The acquisition made Churchill the largest account-wagering operator in the U.S., by annual handle.