Churchill Downs Inc. has put the New Orleans Fair Grounds up for sale, on the selling block. CHDN purchased the racetrack and its 11 off-track betting facilities out of bankruptcy for million in 2004. In May, CDI officials and the Louisiana legislature brokered a compromise agreement under which CDI pledged to spend 0,000 in recommended repairs before the November 21 start of the 2014-2015 racing season. Additionally, CDI committed to turf and track repairs and marketing efforts totaling around 0,000. The state has wanted to return the Gentilly track to its former glory days as a first-class racing facility, following a decline in operating results since CDI has owned it.
CDI hired JPMorgan Chase to solicit requests for proposals from other gaming interests around the country. CDI also approached its largest stockholder, the Chicago-based Duchossis Group, about a deal for the Fair Grounds plus Arlington Park, near Chicago, which the Duchossis Group owned the racetrack before it merged with CDI in 2000. But a source said that deal was unlikely to move forward.
New Orleans Saints owner Tom Benson reportedly made inquiries recently about purchasing the racetrack, but a spokesman for Benson said he thought the $125 million asking price was too high.
Industry observers said CDI wants to shift its emphasis from racing to casinos and other gaming operations. Besides Churchill Downs in Louisville, Kentucky, the Fair Grounds and Arlington Park, CDI owns the struggling Calder Park in Miami. Most of CDI’s revenue in Louisiana comes from the slot machines at the track and video poker located in the OTBs. Last year the company reported profits of more than $20 million.
Louisiana Racing Commission Chairman Bob Wright said, “We’ve understood for some time that CDI is seeking to move out of racing, except for Churchill Downs, while expanding its gaming interests. At the same time, the asking price we’re hearing shows that they value the Fair Grounds. We’ll just have to see where it goes from here.”
Earlier this year the racing commission deferred renewing CDI’s rolling 10-year Fair Grounds license until the company submitted a written plan promising around $1 million in improvements. Most of those funds are being spent on improving the turf course; 45 percent of the races scheduled there over the past two years either moved to the dirt course or were canceled, which contributed to lowered purses.
Now, although the license renewal is still on a conditional basis, the commission recently gave the track’s operators favorite notices for improvements made so far. Bernard Chatters, president of the Louisiana Horsemen’s Benevolent & Protective Association, which had filed numerous complaints about conditions at the Fair Grounds, said, “Our working relationship is good. Every request we’ve made has been met. I appreciate the working relationship we now have. We are absolutely interested in working with anyone who wants to work with the horse industry, whoever that might be.”
Legislators still have their doubts. House members unanimously approved a bill sponsored by Rep. Patrick Connick demanding that CDI dedicate 10 percent of its slots revenue for track maintenance. The bill was withdrawn after CDI assured lawmakers the upgrades would be completed. “As long as the new owners are more interested in racing than slot revenue, I think this could be a great thing for the city and the state. Let’s see what happens,” Connick said regarding a possible sale.
