Churchill, 28 racetracks locked in signal dispute

Negotiations between Churchill Downs Inc. and a collective of 28 racetracks have failed to produce a simulcasting contract for Churchill's seven signals, opening up the possibility that a substantial number of racing fans will not be able to bet on the Kentucky Derby at their local simulcasting outlets.

As of Monday, no new negotiations had been scheduled, according to Jim Simpson, legal counsel for the collective. The lack of an agreement has already cost the two sides revenue from the opening weekend of the Churchill-owned Hollywood Park in California, which opened on Friday night. The signal from Churchill's Calder Race Course in Florida was not available at any of the cooperative sites on Monday, opening day for Calder.

"We just can't agree on rates," Simpson, an Arkansas attorney, said Monday afternoon. "Some of the rates have gone up 15 percent to some of our tracks, and we don't think that's the reality of the marketplace at this point."

Karl Schmitt, the president of Churchill Downs Simulcast Network, said that the company would not comment on details of the negotiations, but said that Churchill is still in discussions with the cooperative and is "hopeful we can reach a resolution."

The collective, known as the Southern Racing Cooperative, comprises racetracks in Arkansas, Florida, Iowa, Louisiana, Nebraska, New Mexico, Ohio, and Texas, including Oaklawn Park, River Downs, Beulah Park, Delta Downs, Prairie Meadows, Sam Houston, Retama, Tampa Bay Downs, and four New Mexico Thoroughbred tracks. Most of the cooperative's other members are harness and greyhound tracks.

The meet at Churchill's flagship racetrack, Churchill Downs in Louisville, Ky., is scheduled to begin Saturday. The Kentucky Derby is scheduled for May 7. All-sources handle on the Derby last year was $99 million, and total wagering on Churchill's 12-race card was $142 million, both records.

In late 2003, Churchill Downs and the cooperative signed a contract guaranteeing that Churchill's signals would go to the cooperative's members, but the contract expired earlier this year at the close of the Fair Grounds meet in New Orleans, Simpson said. Churchill bought Fair Grounds, a former member of the cooperative, last year.

As a policy, Churchill asks simulcasting outlets to sign a single contract covering all of its seven signals, although individual rates for each signal may differ. In addition to Calder, Churchill, Hollywood, and Fair Grounds, Churchill owns Arlington Park in Illinois, Ellis Park in Kentucky, and a majority share in Hoosier Park in Indiana.

Simpson said that the cooperative is hopeful of opening negotiations with Churchill on the cards for the Derby and the Kentucky Oaks, run the day before the Derby, in isolation from the other signals.