10/30/2013 4:26PM

Churchill Downs Inc. racing revenue falls on steep Calder declines


Revenue at Calder Race Course in Miami has plummeted 41 percent in the face of head-to-head live racing competition and an end to its exclusive right to sell simulcast signals for much of the year, according to financial documents released Wednesday by the track’s parent company, Churchill Downs Inc.

The sharp decline in revenue underlines the difficulties Calder is facing as it runs head-to-head with Gulfstream Park for the first time this year and competes with other tracks in the in-state simulcasting market. In previous years, Calder ran exclusive live racing dates during the summer and fall and was the state’s only simulcast-signal broker for much of the year, but that ended in 2013 when Gulfstream began running summer race dates and other tracks, including Gulfstream, made inroads into the simulcasting market by becoming licensed as year-round tracks.

According to the financial documents, Calder’s “revenue from external customers” has been $27.9 million through the first nine months of the year, down 41 percent from $47.4 million through the first nine months of 2012. The decline in the third quarter of 2013 was even sharper, down 62 percent, from $22.6 million last year to $8.6 million this year.

The decline marred Churchill’s financial results for its racing operations even as the company posted sharp gains from its other businesses. Total racing operations revenue, excluding the company’s online betting business, was down 7 percent through the first nine months of the year, from $253.5 million to $235.9 million, with the decline at Calder figuring most prominently in the loss.

Two other tracks owned by Churchill, Arlington and Fair Grounds, also posted year-over-year losses through the first nine months of the year, with Arlington’s revenue declining 8 percent and Fair Grounds’ revenue dropping 7 percent.

Revenue at the company’s flagship track, Churchill Downs, was up 8 percent due to strong results for the Kentucky Derby weekend and the addition of a September meet for the first time this year, according to the documents.

Overall, Churchill posted net income of $9.2 million for the third quarter, up 53 percent compared to third-quarter net income of $6.0 million last year. Revenue for the company in the third quarter was $185.6 million, up 13 percent, largely because of the inclusion of revenues from two casinos that Churchill bought following the close of the third quarter last year.

Revenue from the company’s casino-gambling operations rose 61 percent to $79.8 million during the quarter, according to the documents. Revenue from the company’s online gambling operations, which consists principally of revenue from Churchill’s market-leading account-wagering operation, twinspires.com, was up 6 percent, to $48.5 million.