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Stunner: Sources say Breeders’ Cup will not return to Churchill Downs

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(Editor’s note: Terry Boyd also contributed to this post.)

The Breeders’ Cup is abandoning its old Kentucky home.

So say several well-placed sources who tell Insider Louisville that the self-proclaimed world championships of thoroughbred horse racing are unlikely to return to Churchill Downs.

Ever.

Or, at the very least, not for the forseeable future.

The annual series of elite graded stakes may permanently relocate to California or Florida. Coincidentally or not, this comes after years of feuding with Churchill Downs officials about compensation for staging the event.

Losing the Breeders’ Cup would be a blow to Louisville-area hotels and restaurants.The two-day event pumps hundreds of millions of dollars into the local economy.

Hotel sources said they were led to believe that the Cup would return to Churchill next year, which seemed a virtual certainty until recent months.

Now they are in limbo, anxiously awaiting official word so they can start booking – or releasing to other customers – rooms that have been set aside for the weekend of Nov. 1, 2014.

Jim Gluckson, senior communications consultant for the Lexington, Ky.-based Breeders Cup LTD., declined to discuss details regarding future plans. Gluckson said the group is focused on identifying a site for the 2014 races.

Darren Rogers, senior director of Communications and Media Services at Churchill Downs, said track officials will have no comment until Breeders’ Cup officials make a formal announcement.

The studied silence from both sides of the fence is reminiscent of what legendary newspaper editor Ben Bradlee called “non-denial denials.” Rather pointedly, no one is saying that rumors of the Cup’s relocation are incorrect.

In fact, several sources in Louisville’s hospitality industry and in economic development say they’ve been told the series has made its last visit to Bluegrass State.

Some sources say the Breeders’ Cup will alternate between Gulfstream Park in south Florida and Santa Anita Park in suburban Los Angeles. However, one insider said the series will not rotate but settle permanently at Santa Anita.

That seems unlikely if the main player is, as expected, The Stronach Group, based in Ontario, Canada.

Headed by prominent breeder and owner Frank Stronach, the company owns both Gulfstream and Santa Anita. Gulfstream recently announced plans for a $500 million expansion. The goal: Return the Breeders’ Cup to south Florida for the first time since 1999.

Several years ago, a consulting group advised the Breeders’ Cup to choose a permanent site and identified Santa Anita as the ideal venue. Not only is the weather reliably sunny and warm, the proximity to Hollywood holds the prospect of drawing celebrities (and celeb watchers) to the event.

The idea triggered serious blowback from the blue-blooded Eastern racing establishment and from many turfwriters, most of whom live east of the Mississippi. Fans weren’t too keen on the idea either. Most of them live in the eastern U.S. as well.

The Breeders’ Cup was the brainchild of John R. Gaines, the late Lexington horseman and pet food heir. He established Breeders’ Cup Ltd. in 1982 to shore up fading interest in the sport, partly by rotating the event around the country.

Since the inaugural races in 1984, the Breeders’ Cup has been staged at 10 different race tracks, including Woodbine Racetrack in Toronto, Canada. The most frequent venues have been Churchill Downs, Santa Anita and Belmont Park in New York.

Promotional materials for Breeders’ Cups at Santa Anita may hold clues as to how the owners seek to position the event in the future.

A series of promotional videos with Tony Bennett singing “The Best is Yet to Come” includes actresses Allison Janney, Bo Derek and Elizabeth Banks, as well as other celebrities, talking about their love of horse racing.

Santa Anita and, to a lesser extent, Gulfstream Park benefit from their proximity to celebrities. Bob Hope, Bing Crosby and other movie stars boosted horse racing’s profile during its heyday, and the involvement of contemporary celebrities would be a boon for a publicity-starved sport whose marquee championships are regarded by national media as a footnote during football season.

Sun and stars aside, many would argue that Churchill Downs is the ideal Breeders’ Cup venue. It’s where the event draws the largest crowds and the biggest betting pools.

British and French racing stables, whose participation is highly coveted by Cup leadership, like Churchill Downs because the autumn weather is similar to that of Europe, and because Louisville is 2,000 miles closer than Los Angeles.

Also, most everyone agrees that Churchill stages the event with most aplomb, owing to its experience with the huge throngs that attend the Kentucky Oaks and Kentucky Derby each year.

However, the event is not easy for Churchill to accommodate. It interrupts the track’s fall meet and requires major adjustment in the allotment of stall spaces and other logistical considerations.

Click to see full size.

Churchill has hosted the Breeders’ Cup eight times, more than any other venue. It is the only site to draw single-day crowds in excess of 70,000, a mark achieved on six occasions, including a record crowd of 80,452 in 1998.

Santa Anita will host its seventh Breeders’ Cup in November. Its average attendance trailed Churchill Downs’ by about 13,000 from 1984-2007, when the Cup was a one-day event. Since the event expanded to Friday and Saturday in 2008, Churchill has widened its lead to 19,000.

In addition, more money is wagered at Churchill than at Santa Anita. Churchill’s record handle of $173.9 million, set in 2010, is 12 percent higher than Santa Anita’s best. Since the vast majority of bets are placed off-track, this implies that bettors prefer the races staged in Louisville.

Figures regarding the sale of concessions, parking and souvenirs are not publicly available. But it stands to reason that larger crowds generate more revenue in those areas as well.

How then can the Breeders’ Cup afford not to make regular stops at Churchill Downs?

The devil is in the details of contracts between the host site and Breeders’ Cup Limited, the event’s owner. Hosting the event is a huge undertaking, especially now that it has expanded to two days. Host tracks need to be compensated for their trouble, and in the past this has been a bone of contention for Churchill Downs.

Former Breeders’ Cup board member Satish Sanan told a radio interviewer in early 2010 that Churchill Downs was the “worst organization” to host the event. Whatever difficulties existed were apparently ironed out. Churchill hosted the Breeders’ Cup in 2010 and 2011, providing record crowds and wagering both times.

Sanan later apologized for his remarks, and a Breeders’ Cup official said they did not reflect the board’s position.

Note that in the same radio interview Sanan said Santa Anita was the “best site” for the Breeders’ Cup.

It is believed that the Stronach Group has cut the Breeders’ Cup an especially sweet deal. Whatever benefits the Breeders’ Cup enjoys with Santa Anita would presumably be replicated at Gulfstream. That might explain why the Cup might want to work exclusively with those two tracks.

Last fall Gulfstream announced an ambitious renovation aimed at bringing the Breeders’ Cup back to the Miami-Fort Lauderdale area. The Hallandale Beach, Fla., track last hosted the Cup in 1999. About five years later, its old grandstand was razed to make way for a casino, restaurants and other entertainment facilities.

The expansion project aims to triple seating capacity from roughly 17,000 to 52,000, which is large enough to make it a viable Breeders’ Cup site. But of the five tracks to host the cup more than once, Gulfstream owns the lowest average attendance, 47,294 – some 25,000 less than the average crowd at Churchill Downs.

Impact on Louisville

Losing the Breeders’ Cup would cost Louisville-area hotels and restaurants a windfall weekend they have enjoyed every three or four years for the past three decades.

Jim Wood, president and CEO of the Greater Louisville County Conventional and Visitors Bureau, deferred to Kevin Flanery, president of Churchill Downs Racetrack, about the details of Breeders’ Cup plans. But Wood acknowledged losing Breeders’ Cup would have “a significant economic impact” on Louisville’s hotels.

“I can say that for that weekend … we run occupancy rates in the high 90 percent range,” Wood said.

While hotel room rates don’t approach the stratospheric highs of Derby weekend, when the penthouse at 21C Museum Hotel can go for as much as $10,000 per night, hotel sources rate the Breeders’ Cup as second behind Derby.

“We’ll take a bit of a hit,” said Rita Reedy, corporate marking manager for The Galt House, Louisville’s largest hotel.

Reedy said that when Breeders’ Cup comes to Louisville, it has a big impact at the A. J. Schneider Company’s Crowne Plaza Louisville Airport hotel, which is 2 ½ miles from Churchill Downs.

Reedy added at the much larger Galt House, events and conventions are booked years out. Because the Breeders’ Cup isn’t an annual event, it sometimes bumps up against big conventions, “and we just don’t have the rooms.”

But in terms of total impact on her company, she added, “it’s nothing like Derby.”

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