08/28/2014 9:03AM

Churchill Downs Inc. replaces CEO Evans with Carstanjen


Churchill Downs Inc. has elevated its chief operating officer, Bill Carstanjen, to chief executive, replacing Robert Evans, the company’s CEO since 2006. The change is effective immediately, the company announced in a release on Thursday morning. Evans will remain the chairman of CDI’s board, the release said.

The release did not contain a reason for the change. A company spokesperson said Evans, 62, would not be available for an interview and referred inquiries to a quote in the release from Evans.

“We operate under a collaborative senior leadership model and have frequently changed our organizational structure to allow our executives to develop experience in new areas,” Evans said in the release. “This approach has served us well, enabling us to diversify and grow the company.”

A filing with the Securities Exchange Commission states that Churchill’s board approved the management changes on Wednesday.
Under Evans, Churchill has focused its efforts in three areas: building its account-wagering business under the twinspires.com banner, acquiring stand-alone casino gambling properties, and leveraging the track’s most valuable property, the Kentucky Derby. Since Evans took over, Churchill’s stock’s price has climbed from approximately $35 to $90.

In March of last year, Churchill approved a long-term incentive plan rewarding Evans, Carstanjen, and the company’s chief financial officer, William Mudd, with millions of dollars in stock options, with the expenses for the plan being recognized through June of this year. Since the launch of the program, Evans has sold approximately $14 million worth of Churchill stock, largely by exercising options rewarded at the time Evans took the company helm.

As a company, the Churchill that Evans is leaving is far different than the Churchill he took over. In part because of a merger with Youbet.com in 2010, twinspires.com, which was launched in 2008, is now the dominant account-wagering operation in the U.S. Churchill also now owns three standalone casino properties, all purchased in the past three years, to go along with casinos at Calder Race Course in Miami, Fair Grounds in New Orleans, and at a new harness track in Ohio it owns in partnership. And revenues from the Derby and Kentucky Oaks have soared, as Churchill focused its efforts on high-end amenities and revamped its ticketing and sponsorship programs.

Evans’s strategies have not been universally praised within the racing industry. Churchill has come under intense criticism from horsemen who say the company has neglected Calder and Fair Grounds, and some horseplayers launched a campaign urging a boycott of the company’s tracks after the takeout was raised at Churchill Downs. Handle declined at the recent Churchill spring meet, which was also hurt by a decline in field sizes.

Evans is relinquishing the reins when many analysts have become cautious over the prospects of further growth in the casino industry due to weakness in local markets because of the rapid expansion of gambling over the past five years. While many casino companies are saddled with billions of dollars in debt, Churchill has $369 million in long-term debt, considered a manageable number.

Carstanjen is 46, and he received $9.9 million in compensation in 2013. Carstanjen has been the company’s president and chief operating officer since 2011. He joined Churchill in 2005 as general counsel, and later served as chief development officer. He was named chief operating officer in 2008, and added the title of president in 2011.