Churchill Downs reports over $162 million net revenue loss

Churchill Downs reports over $162 million net revenue loss
Photo: Eclipse Sportswire
On a Churchill Downs Inc. earnings call Thursday, company officials said Churchill Downs racetrack suffered a loss of $162.9 million in net revenue during the second quarter as compared to a year earlier, which was largely attributed on having to reschedule the 2020 Kentucky Derby from its traditional date on the first Saturday in May to Sept. 5. That number also includes a $13.5 million loss from Derby City Gaming, which was shut down at the height of the COVID-19 pandemic. Churchill Downs racetrack earned $30.2 million in net revenue during the second quarter, down from $192.1 million in the second quarter of 2019. Churchill Downs Inc, which includes all of the company's properties and operations, many of which were forced to close due to the pandemic, reported a net revenue loss of $292.3 million, with net revenues falling from $477.4 million in the second quarter of 2019 to $185.1 million in 2020. Churchill Downs Inc, which includes all of the company's properties and operations, many of which were forced to close due to the pandemic, reported a net revenue loss of $292.3 million, with net revenues falling from $477.4 million in the second quarter of 2019 to $185.1 million in 2020.

Due to the COVID-19 pandemic and its associated social distancing protocols, CDI CEO Bill Carstanjen said the company will be unable to make back all of the lost revenue. Despite that, he said that the Run for the Roses has not suffered any long-term damage.

“The financial details for this year’s Kentucky Derby week will continue to change as we make decisions over the coming weeks,” Carstanjen said. “We will provide the metrics right after Derby as we do every year. Since we have few guests and lower sponsorship participation, we will deliver lower financial results this year.”

The company has offered refunds to ticketholders who feel unsafe attending the scheduled September event, and has allowed sponsors to delay their sponsorship to the 2021 Derby.


In addition, general admission tickets are not currently being sold, despite being below the limited capacity approved by Kentucky governor Andy Beshear. Carstanjen said Churchill is trying to get a handle on safety precautions and might reopen the sales at a later date.

“We will protect the long-term relationship we have with our guests and sponsors during this challenging time,” Carstanjen said. “That’s the way to think about it and when we know the Derby will be back next year and every year after that into the foreseeable future.”

Carstanjen made the Derby and other sports’ proclivity for bring people together during difficult times a point of emphasis, however, he noted that it will look much different this year.

“Most years, we take it for granted that it is both a celebration and an inspiration,” Carstanjen said. “I don’t think it’s that same this year. With all that is going on, it just cannot be the same celebration that it normally is. However, we hope that when we run it for the 146th consecutive year this September, it will serve as an inspiration and unifying force.”


Churchill Downs’ executive vice president and CFO, Marcia Dall was also on the call, delivering some specific financial numbers. Dall said Churchill Downs has cash liquidity through the next 12 months, and can be flexible with much of its capital spending, having already made some cuts, especially to gaming facilities, that have saved money for the company as reopenings have begun.

“Sustainability of these margins depends upon the competitive landscape in each market,” Dall said. “Though rest assured, we will only add back amenities or additional free play and other incentives if necessary.”

Churchill Downs plans to release more financial reports following the Sept. Kentucky Derby.

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