by Ray Poirier | Share price of publicly-traded Churchill Downs Inc. (CHDN) has been dwindling since the company’s executives have been feuding over the method in which it would share revenues with the horsemen from advance deposit wagering.
The feud will escalate this week as Churchill Downs in Louisville, Kentucky, has announced that it will begin cutting race purses by 10%.
The smaller purses will also reflect a slowdown in business due to the economy, officials said, but the major reason for the cut is the horsemen’s dispute.
As one official said, "The unresolved negotiations with horsemen over distribution of the Churchill Downs simulcast signal to national advance deposit wagering prompted Churchill Downs to announce a 10% reduction in overnight purses for the remainder of the fall meeting."
Actually, CHDN’s problems with the horsemen’s associations began earlier this year in Florida with the race meeting at Calder Race Course, a facility owned by Churchill Downs Inc.
Simply stated, horsemen throughout the country feel they are not getting their proper share of monies paid for the rights to receive simulcast signals. Whereas in many cases, tracks, off-track betting outlets and some advance wagering systems have been paying 3% of their revenues to the originating track, activist horsemen have been working to increase that amount to 8% with purses receiving half the revenues.
Under federal law, horsemen have the authority to withhold racing signals from disputed areas. That has prevented Churchill Downs from distributing its racing signals to many of its national outlets, thus reducing daily income.
Churchill officials say they will continue to work with the horsemen in hopes of ending the dispute.