Welcome to the May 21 Monday Business Briefing, your business intelligence digest from Insider Louisville.
Court ruling boosts Churchill Downs shares
Shares of Churchill Downs surged 11 percent last week after the U.S. Supreme Court legalized sports betting.
Shares of the Louisville-based company closed at $309.65 Friday, up more than $30 for the week. For comparison, the S&P declined last week.
Two days after the SCOTUS ruling, Churchill Downs announced that it had reached an agreement with Golden Nugget Atlantic City to enter the online gaming and sports betting markets in New Jersey.
“We are looking forward to offering integrated iGaming and sports betting products in New Jersey,” Churchill Downs CEO Bill Carstanjen said in a news release. “We have the unique opportunity to leverage our knowledge and experience operating the largest legal online horse racing wagering business in the U.S. as we enter the iGaming and sports betting markets.”
On the same day, the company also said it was partnering with SBTech to enter iGaming and sports betting in Pennsylvania, and sports betting in Mississippi.
Churchill Downs owns two brick-and-mortar casinos that the company said it will use to offer sports betting. The company had previously said that it was buying the Presque Isle Downs & Casino in Erie, Pa.
Brown-Forman shuffles leadership ranks
The Louisville-based distiller announced in a news release that it had appointed:
- John Hayes as senior vice president, president of USA & Canada. Hayes has been with the company for 31 years, most recently as SVP and chief marketing officer.
- Thomas Hinrichs as SVP, president of the International Division. Hinrichs has been with Brown-Forman for 21 years, most recently as president of the company’s Europe, Asia, Australia, New Zealand and Pacific islands region.
The distiller also said that Jill Jones, executive vice president and president of the North America region, will leave the company after 18 years.
Brown-Forman also said that its Global Corporate Affairs organization, led by Senior Vice President and Chief Corporate Affairs Officer Mike Keyes, will include corporate social responsibility, government affairs, family shareholder relations, corporate communications, global community relations and corporate services. Keyes has been with Brown-Forman for 27 years, most recently as SVP, president of the North America region. —Boris Ladwig
Analysts examine details of Kroger deal with online British supermarket
Last week, the Kroger Co. announced that it would partner with the British-based Ocado Group, which specializes in automating online grocery shopping and fulfillment. As part of the deal, Kroger said it would increase an existing stake in Ocado by 5 percent — for a reported cost of £183 million, or about $250 million, according to Seeking Alpha.
Kroger and Ocado are working to identify the first three sites in 2018 for development of new, automated warehouse facilities in the United States, and will identify up to a total of 20 over the first three years of the agreement, according to a news release.
BBC News reported that “Ocado’s technology will be used in the US exclusively by Kroger” and that the agreement was the latest in a “series of deals that Ocado has struck with retailers to share its technology that automates online grocery orders.” Its shares spiked on the deal.
Seeking Alpha suggested the deal would benefit the technology company more than Kroger because U.S. shoppers “have shown they prefer to see and handle the food they buy in person.”
Reuters reported that the deal, which comes less than a year after Amazon bought a key Instacart customer Whole Foods, would be a setback for Instacart in the U.S. because Kroger is one of its big customers. Even so, a Kroger spokesman told Reuters its relationship with Instacart “was unaffected by the Ocado deal, adding that it viewed them as “complimentary.’ ”
Reports: S&P downgrades Kentucky issuer credit due to pension obligation
Pensions & Investments reported on Friday that S&P Global Ratings downgraded Kentucky’s issuer credit one notch, due in part to “increased budgetary strain from rising costs associated with pension obligations,” the ratings agency said in a news release.
The Bond Buyer reported that Kentucky’s fiscal problems led to the downgrade as it prepares to issue $281 million of revenue bonds.
In the S&P release, Timothy Little, a credit analyst said: “In our opinion, the state is more vulnerable to fiscal stress due to years of uneven budgetary management that has relied on expenditure cuts and weakened reserve levels during a period of economic expansion. The commonwealth’s high level of fixed costs for its pension obligations and Medicaid are likely to remain such, further pressuring future budgets.”
The outlook is stable, he added, which “reflects the state’s enacted pension reform, adopted biennium budget that fully funds its required actuarial determined employer contribution to all pension plans, and transferring of funds to its budget reserve trust fund.”
The Bond Buyer noted that S&P lowered Kentucky’s issuer credit rating to A from A-plus and cut the ratings on the state’s appropriation-backed obligations to A-minus from A.
“S&P also lowered to A-minus from A the ratings on Kentucky’s state aid intercept programs for schools and universities, and downgraded to BBB-plus from A-minus the ratings on lease debt backed by appropriations from the Administration Office of the Courts,” The Bond Buyer said. —Mickey Meece
State board of education broke open meetings law, AG rules
The Kentucky Board of Education broke open meetings law when it discussed former Commissioner Stephen Pruitt’s contract, which led to his sudden resignation in a meeting last month, the attorney general ruled.
In an opinion sought by WDRB News, the AG said the board went beyond the scope of the law when it discussed Pruitt’s contract in the closed session. In the meeting, Pruitt’s contract was amended, giving him 90 days of pay and benefits in turn for his immediate resignation.
Under state law cited to enter the closed session, the board should have only discussed the appointment, discipline or dismissal of an employee, the ruling said.
The board or WDRB can appeal the decision in court, WDRB said in its article announcing the ruling. A KDE spokeswoman did not return Insider’s request for comment. —Olivia Krauth
Fitness ranking a bust for Louisville
Louisville missed out — by a long shot — on being named America’s most fit city. In fact, the bourbon, beer and barbecue town came in 98th among 100 cities on the American Fitness Index.
Rankings were released May 15 by the American College of Sports Medicine and the Anthem Foundation after being expanded from 50 metropolitan service areas to the nation’s 100 largest cities.
To come up with the rankings, 33 indicators were considered. They included personal health indicators like exercise, eating habits, obesity, asthma and diabetes as well as community and environment indicators, such as walkability, acres of parkland, and use of public transportation to work.
Arlington, Virginia came out on top, with an overall score of 77.7. Louisville’s score was 27.0.
Kentucky program courts students for social service apprenticeships
Students looking for a pathway into the social service field now have a new option — courtesy of the state of Kentucky.
The state has started a registered apprenticeship pilot program for young adults who want to pursue social service careers in state government.
The program, which started earlier this year as a co-op for high school students, provides paid apprenticeships in the local Protection and Permanency and Family Support offices within the Department for Community Based Services (DCBS).
“Whether it’s a junior in high school who is dreaming of a career that gives back to the community, or a college student looking for a pathway into the social services field, this apprenticeship program will fundamentally change the way that the Commonwealth of Kentucky recruits and trains public servants for rewarding careers within DCBS,” Gov. Matt Bevin said in a news release.
“Apprenticeships are a proven training model that will enhance the way we provide social services throughout the Commonwealth, and we are exploring other areas where we can further use this program to recruit and retain the next generation of public servants in Kentucky.”
Kentucky high school juniors and seniors who would like to apply for the fall 2018 semester should contact their guidance counselors. Anyone else can contact Tresa Straw: [email protected] or (502) 564-7770, ext. 3367. — Darla Carter
Gilda’s Club is coming to Grinstead Drive
Gilda’s Club Louisville is on the move. The organization, which provides support for people with cancer, plans to more than double its clubhouse space by moving next year to a 35,000-square-foot building at 2440 Grinstead Drive.
Friends gathered at the site for a Hard Hat Party recently to tour the space and to smash a wall, which had the word “cancer” spray painted on it. The new Gilda’s will open in summer 2019, allowing the nonprofit to serve more than 5,000 people a year.
When it moves to Grinstead, the group plans to change its name to Gilda’s Club Kentuckiana. The name switch reflects the group’s expanding reach.
Gilda’s recently began offering support groups at the Pat Harrison Cancer Resource Center in Jeffersonville, Indiana. It also plans to open a branch in west Louisville in spring 2020 in collaboration with Passport Health, the Kentucky Cancer Program and Kentucky African Americans Against Cancer. —Darla Carter
Book Warehouse has opened and Puma is coming soon to the Outlet Shoppes of the Bluegrass. Recently, the outlet in Simpsonville has added Tory Burch and Le Creuset among other brands.
Gov. Matt Bevin has selected deputy chief of staff Adam Meier to lead the Kentucky Cabinet for Health and Family Services. Meier, who oversaw the state’s application to overhaul Medicaid, now becomes secretary of the state’s largest cabinet, where he will lead policy and operations. Kristi Putnam, who’s been part of the 1115 Medicaid waiver implementation, has been named a deputy secretary of the cabinet. Scott Brinkman, who became acting secretary after the departure of Vickie Yates Brown Glisson, goes back to his role as secretary of the Executive Cabinet.
UPS recently announced a bonus program for employees who work at Worldport this summer. Employees can earn a bonus of up to $250 per week, depending on what shift they work.
Texas Roadhouse promoted Tonya Robinson to chief financial officer. Robinson, who was vice president of finance and investor relations, assumes the role held by the company’s current president, Scott Colosi, who had served as interim CFO since 2015, according to an announcement.
The TALK Cybersecurity Summit on June 14 at Sullivan College will include a keynote address from Klint Walker, cybersecurity adviser for the U.S. Department of Homeland Security Region IV.