Kentucky businessman Robert Evans faced shareholders in Churchill Downs Inc. (CHDN) for the first time as president and CEO of company that holds as its treasure the Kentucky Derby and admitted that his actions during the past year "may have ruffled a few feathers."
To many disgruntled race fans, that was an understatement.
He chose to break up the Triple Crown television package that had existed for many years, shifting traditional coverage from NBC to a combination of ESPN and ABC. The result was a huge drop in viewership.
He formed an alliance with Magna Entertainment Corp. in the development of TrackNet Media Group, a television content provider and ended relationships with both TVG and Youbet.com (UBET). That resulted in a major decline in Derby wagering.
At last week’s annual meeting, he told shareholders that "It is not really our intent to just go out and be disruptive. Our intent is to compete aggressively and to attract more customers to our business”¦there are always a few potential consequences when you challenge the status quo.
"We are committed to this path of change," he asserted.
The change, he referred to, also includes a major study of the 150,000 thoroughbred races that were run over the last three years in the United States. The purpose of the study, he said, was to determine just what types of races attracted the most betting.
"We’re trying to figure out what is it that generates handle. Why does race 148,001 generate more handle than race 148,002." Evans explained.
Placed in charge of the study was Tom Jenkins, a Churchill corporate vice president who joined the company in March. Like Evans, he formerly was employed at Accenture Ltd.
Jenkins admitted that he doesn’t have a racing background but he dismissed that by saying that he has expertise in problem solving, analytics and consulting.
Despite Evans radical performance, the new track president has had the strong backing of Richard Duchossois, the company’s largest stockholder. Duchossois was the owner of Arlington International which he sold to Churchill Downs Inc., taking company stock rather than all cash.
Duchossois was among four members of the board of directors that were re-elected last week. The others were J. David Grissom, Seth Hancock, and Susan Elizabeth Packard.
In a departure from previous annual meetings, the company’s officers did not take questions from the overflow audience. Instead, the shareholders were given luncheon tickets and were told they could make their inquiries on an individual basis.