Churchill wants to sell Ellis

Churchill Downs Inc. is seeking a buyer for Ellis Park in Henderson, Ky., according to Tom Meeker, the president of Churchill, who acknowledged on Tuesday that the track has been a "drag on our earnings for several years."

Meeker said Churchill did not have a timetable for selling the track, which the company bought for $22 million in 1998 along with a training facility near Lexington, Ky. Meeker said Churchill will seek a deal that will allow it to retain the rights to Ellis's simulcast signal, a structure that is uncommon, if not unique, in the U.S. racing industry.

Meeker said that Churchill had put Ellis on the market on the same day the company reported net income of $21 million in 2002, or $1.57 a share, down $1.1 million compared to 2001.

In the fourth quarter of the year, Churchill took a $4.5 million charge against Ellis Park's book value, a statement from the company said.

Churchill's stock dropped 7 percent on Tuesday, or $2.25, to $30.35. Churchill stock declined more than $5 in the five days that ended Tuesday.

The Ellis sale would ideally be limited to the track itself, Meeker said, allowing Churchill to continue to generate revenues from the track's simulcast signal. All of Churchill's tracks - Churchill Downs, Hollywood Park, Arlington Park, Ellis Park, Calder Race Course, and Hoosier Park - are currently marketed under a brand the company calls "CDSN," for the Churchill Downs Simulcast Network.

Racetracks have frequently used other companies to market their signals in international venues like the Caribbean and Europe. But no major American racetrack currently owns a racing facility while giving another company its domestic simulcast rights.

According to Churchill's financial statements, CDSN was the biggest money-maker for the company in 2002. CDSN had net income of $17 million in the year; by comparison, Calder Race Course, Churchill's most profitable track, had net income of $12.3 million on the year.

The Louisville-Courier Journal reported on Tuesday that the owners of Balmoral Park and Maywood Park, harness tracks in the Chicago area, were interested in making an offer on Ellis. Meeker declined to comment on the report.