Churchill posts quarter loss

Churchill Downs Inc. lost $3.8 million in the third quarter of 2004, largely as a result of costs associated with lobbying efforts in Florida and California and the poor performance of the company's Ellis Park, Churchill said Wednesday.

The third-quarter loss compared with a third-quarter profit last year of $7.9 million. Churchill took a $6.2 million "impairment charge" on Ellis Park in the quarter, and its "selling, general, and administrative" expenses increased 58 percent, from $8.5 million to $13.4 million. For the first nine months of 2004, Churchill has posted a profit of $11.9 million, compared with $24.4 million in 2003.

Churchill's efforts to get slot-machine initiatives on ballots in California and Florida met with mixed results. In California, an initiative is on the ballot for Nov. 2, but proponents have abandoned an advertising campaign in the face of widespread opposition. In Florida, a referendum that would allow counties to determine whether to approve slot machines at racetracks has qualified for the Nov. 2 ballot.

Churchill also said it has reached an agreement to sell a 19 percent stake in Kentucky Downs, an all-turf track near Tennessee, to Kelley Farms Racing Inc., a company owned by Brad Kelley, a Churchill director. The sale will reduce Churchill's ownership in Kentucky Downs to 5 percent, according to Tom Meeker, Churchill's CEO. Kelley exchanged shares of Churchill worth $3.2 million for the stake.