04/28/2010 11:00PM

Prime-time Derby may not be far off

Email

The expiration this year of the broadcast contracts for the three Triple Crown races and the decision by Churchill Downs to install permanent lighting has raised suggestions that Churchill might run the Kentucky Derby at night in the near future.

Churchill and television executives said this week that they have had no discussions yet about holding the Derby at night, but the $2 million installation of the lights and Churchill's aggressive efforts to promote the Derby less as a horse race and more as a celebration of traditional Kentucky culture and glitzy Hollywood celebrity have convinced some people that a prime-time Derby is only three to five years away, if only as a one-year experiment.

Ed Seigenfeld, the former executive vice president of Triple Crown Productions, a partnership of Churchill, Pimlico, and Belmont that was dissolved last year, said he believes Churchill will run a Derby under the lights by 2015.

"I'm convinced it will happen in the next three to five years," Seigenfeld said from his Louisville home. "I know there's tradition. But we can't have night baseball at Wrigley Field, right? We can't play NFL or college football at night, right? And we definitely can't play the World Series at night. And yet we do all those things."

Kevin Flanery, the president of Churchill, said this week that the track has had "no discussions, either internally or externally," about running the Derby during prime-time hours, typically defined as 8 p.m. to 11 p.m. Eastern. The Derby is scheduled to go off this year at 6:24 p.m.

Flanery said Churchill made the decision to install the lights to capitalize on the track's success last year with three night cards held in June and July under temporary lighting. For those cards, an average of 30,000 people attended, four times the normal crowd. Ontrack handle for the three days skyrocketed 250 percent.

Regardless, discussion about a prime-time Derby could not be taking place at a more fortuitous time for the company. A $44 million, five-year contract with NBC covering the Kentucky Derby and Preakness Stakes expires after the races this year, and Churchill officials have not yet begun serious negotiations on a renewal. Pressure to run the Derby at night may come from the networks if they are convinced that the shift would significantly boost ad rates for commercial time sold during the broadcast.

Flanery declined to discuss the negotiations other than to repeat that Churchill was "very happy with its relationship with NBC."

Ken Schanzer, the president of NBC Sports, said on Wednesday that Churchill and the broadcast network have "never" discussed the possibility of holding the Derby at night, but that the network would be open to those discussions.

Any analysis of a prime-time Derby would have to take into account two principal factors: the impact on the ratings and the impact on handle for the race. With the exception of a year in which a horse is going for the Triple Crown in the Belmont Stakes, the Kentucky Derby broadcast is the highest-rated horse racing show of the year, and handle far exceeds any other single race in the U.S.

In addition to providing guidelines for sponsors about an event's visibility, ratings are the principal factor in determining rights fees. Most racing officials have said they expect that a Derby run at 9 p.m. would boost ratings because many more people watch prime-time programming compared with daytime programming. However, that also would mean stiffer competition from other networks' quality programs.

Several racing officials said they believe handle on the Derby would be negatively impacted if the race were held at night. The majority of bettors are not accustomed to hanging out at an OTB past sunset. As a result, many East Coast and Midwest bettors would be expected to wager hours before the race is run. Bets placed well before post are usually nowhere near as big as the wagers made minutes before post time, when information on odds and the field is more accurate.

"I really think a prime-time Derby would kill the betting, at least in the first few years," said a racetrack official who spoke on the condition of anonymity because he negotiates simulcast contracts with Churchill.

Although officials declined to confirm the value of the previous contract, officials did not dispute that Churchill received approximately $30 million over the five-year length of the current deal. In comparison, handle in 2009 on the Derby was $104 million, down 8.7 percent from the 2008 figure of $114.6 million. Churchill retains at least 10 percent of the handle on Derby Day, and revenue from betting far exceeds the single-year revenue from its current television contract.

However, under Bob Evans, Churchill's chief executive since the summer of 2006, Churchill has been attempting to drive up the value of the Kentucky Derby brand by emphasizing glamour and connections to celebrity culture, suggesting that Churchill might want a chance to expand the Derby audience.

It's also possible that Belmont Park will re-enter the broadcast negotiations with Churchill and Pimlico, according to Charles Hayward, the chief executive of the New York Racing Association, which operates Belmont. Belmont's five-year, $20 million contract with ABC-TV also expires this year, and Hayward said Evans has indicated that he would like the three tracks to promote the Triple Crown on one network.

The three races haven't been covered by one contract since 2005, when Belmont struck out on its own because of dissatisfaction over the split of revenues.

"We're all on hold until after the Belmont this year," Hayward said. "But it would be nice to put it back together again, not just from a television standpoint, but also from a sponsorship standpoint. I think we could all benefit in what's a really tough television market right now."