Churchill Downs Incorporated ("Company" or "CDI") (NASDAQ: CHDN), the Kentucky Horsemen’s Benevolent and Protective Association (“HBPA”), and the Kentucky Thoroughbred Association (“KTA”) have reached agreement on a three-year contract that establishes levels of race purses at the home of the Kentucky Derby. In addition, the Kentucky HBPA and CDI have agreed to dismiss their claims against one another in a lawsuit filed in United States District Court for the Western District of Kentucky in 2008. The agreement follows the expiration of the previous contract following the historic track’s 2009 Spring Meet.
Churchill Downs has also agreed to provide a $1.5 million supplement to race purses divided evenly over the three years of the horsemen’s agreement. That commitment includes a provision that would allow the track to distribute a greater share of that supplement early in the three-year period should race purses at Churchill Downs drop below anticipated levels.
“Churchill Downs is very pleased to be part of this long-term agreement that is good for horsemen, Churchill Downs, Kentucky’s embattled horse industry and racing fans in Kentucky and throughout North America,” said Kevin Flanery, president of Churchill Downs racetrack. “This three-year pact between our track and horsemen comes at a crucial time for Kentucky’s horse industry as horses and horsemen are leaving our state to pursue the growing purses and breeding incentives that exist in states with slots and other expanded wagering options at their racetracks. Decisions are being made daily on where to breed and race in 2010 and beyond, and once horsemen, stallions and mares leave Kentucky, it will be very difficult to get them to return. Churchill Downs’ commitment to provide an additional $1.5 million to purses is an effort to protect Kentucky racing from states that supplement their races with expanded gaming revenues. Our hope is that the purse supplement will help keep a few more horses and horsemen in Kentucky through 2010 while our united horse industry works for the passage of legislation that would allow additional gaming at racetracks and level our competitive playing field with tracks and breeding operations in those rival states.”
“It’s a good contract – I think it’s good for both parties,” said KHBPA President Rick Hiles. “I think it’s going to work out well for the horsemen and for Churchill Downs. We’re glad to get this behind us and we look forward to working together over the next three years in the effort to get all of Kentucky racing back on track.”
“The KTA appreciates the professional and unified manner we experienced in working with Churchill Downs in our recent negotiations for a contract renewal,” KTA President Don Robinson said. “We believe all parties, owners, trainers and the track will benefit as racing continues in these troubled economic times.”
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