LOUISVILLE, Kentucky -- (PRESS RELEASE) -- Churchill Downs Incorporated (CDI) (CHDN) announced that it has entered into a binding term sheet with The Stronach Group (TSG) under which TSG will operate, at TSG's expense, live racing and maintain certain facilities used for racing and training at Calder Race Course (Calder) located in Miami Gardens, Fla.
TSG will run at Calder the minimum number of race days required by Florida law while also running live racing during the course of the rest of the year at Gulfstream Park. This arrangement will be in effect through the end of 2020.
The transaction is anticipated to be completed by June 30, 2014 and is contingent upon regulatory approval, certain amendments to Calder's agreement with the Florida Horsemen's Benevolent and Protective Association, Inc. (FHBPA), execution of certain other definitive agreements (such as the facility lease agreement) and other usual and customary closing conditions.
The transaction will involve a lease to TSG of Calder's racetrack and certain other racing and training facilities, including a portion of the barns on Calder's backside consisting of approximately 430 stalls. TSG will operate live horse racing at Calder, under Calder's racing permits, in compliance with all applicable laws and licensing requirements. TSG will operate and maintain the racing and training facilities that are subject to the lease agreement on a year-round basis. TSG will be responsible for substantially all of the direct and indirect costs associated with these activities and receive the associated revenues. CDI will continue to own and operate the Calder Casino.
In addition, TSG and CDI reached agreement with respect to extending their current contracts to provide each other with their respective horse racing content for simulcast and account wagering purposes and modification of their HRTV operating and ownership agreement which will result in, among other things, the disposition of CDI's remaining interest in HRTV to TSG early next year.
CDI's President and COO, William Carstanjen, said he believes this transaction makes sense for all of the stakeholders of the thoroughbred racing industry in South Florida in light of the limited supply of thoroughbred horses racing in the region.
"Without this arrangement, there is no other apparent, viable long-term solution to preserving racing in South Florida on a year-round basis. In addition, CDI and TSG addressed the future of their HRTV partnership and other outstanding topics of discussion between the companies, all of which sets the stage for a mutually productive working relationship going forward," Carstanjen said.
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