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Churchill Downs Inc. Message Board

  • lorddarley lorddarley Nov 6, 2005 9:00 PM Flag

    Have I got this right ??

    I'm working w/o the Sept. balance sheet and trying to determine enterprise value based on June 30 financials, adjusted for the Sept. Hollywood sale.

    A. The market cap is $424 M.

    B. At June 30, liabilities were $425 million. The Hollywood sale was for $258 million so reduce the debt by that much.

    Add A + B and subtract current assets of approx $236M.

    Is "enterprise value" only about $350 - $400M ???

    That buys Calder, Arlington, Churchill and the rest ??
    Wow. Seems cheap, or else my reasoning is wrong.

    LordDarley

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    • Enough of the "computer parasite" crap. These sites expand the racing and betting audiences. I live seventy miles from the nearest indian horse book, eighty miles from the nearest bush league track. These sites allow the tracks to take my betting dollar that they otherwise wouldn't be getting. CHDN could acquire a company like Youbet and run it as a wholey owned subsidiary. anything wrong with that? Do you remember what happened to Magna when they pulled their signal from the "parasites" (think Boycott Magna)? The CEO later called that decision a mistake.

      If the tracks want to survive they might try being more fan friendly. They might try setting food and beverage prices at a more reasonable level. Del Mar sent me free tickets after I attended opening week end. They might even comp some of their bigger players (oh no, rebates!).

      Oh, that comment about the Bushes and economics, last time I looked economics was a requirement to get an MBA at most prestigious universities.

    • been trying to nut out finster's economic theory behind the track operators not being allowed, on economic-based anti trust grounds, to raise their margins to chop shops including ubet. now, 'f' is a great fan of the bushes and economics is not a word easily spelled or even pronounced properly in that family, but still...

      the 'f' theory seems to run along these lines: there are two dairy farmers in a town. they are losing money. they want to raise their prices. 'you cannot,' the government says, 'because there are only two of you and you have been charging the same price for six years. if you wanted to raise your prices, why didn't you do it six years ago? all the consumers are used to this price by now and you should not change it. and, anyway, you might be in collusion.' so the two farmers go broke and the town has no milk.

      i am not a lawyer, but the argument seems equally spurious on anti trust grounds. following the same logic, the major oil companies - there are only a handful of them - could not raise prices because they might be in collusion. wal-mart could not raise prices. the big three would be locked in. telephone companies. only a couple of them left. and so on.

      where's the soundness of this argument? if i have this correct, in capitalism businesses are allowed to make a profit. and that is what the track operators ought to be allowed to do - and if that involves squeezing 'computer parasites' who use but contribute little to the product then so be it. warm and fuzzy feelings for ubet at the expense of chdn would seem out of place on this board.

    • --Have you ever petitioned or answered a Justice Dept. Anti-Trust Div. subpoena?

      --If you had, you would have not posted such folly!

    • I suggest you drive by CRC and rethink your real estate play potential....the Paris 'burbs are a better real estate play.
      Slots will come and that is the value!
      ----Patience--

    • tlg: you're absolutey right. they did ask for it. and they bent over when tv came along also. and, to the old time operators, the internet is turning out to be the rough end of the pineapple because meeker, stronach et al were of a different generation and they did not see its potential.

      they deserve everything they get. however...

      the logical end is oblivion. if they don't get a fair price for their product, there will be no facilities left outside of those with slots.

      almost every industry has to be saved from its own stupidity. the fed bails out the banks. the taxpayer bails out everyone from chrysler to the airlines to every company pension plan, it seems (even exxon is billions in the red with its pension fund?)

      that aside, there has to be a model developed to save this industry. and, imho, the chop shops are doing more harm than good. if people like finster are going to cry 'anti trust' every time the tracks try to get a fair price for their product, then there will be virtually no product worth buying. horse racing will become a sideline for casinos - and only because state legislatures make them keep the horses running to retain jobs, keep the place green etc.

      btw (in ref to another posting here) a 2.5 per cent increase in the handle on the bc ain't gonna do it.

    • CDHN has an unpresidented opportunity BECAUSE of the storms to consolidate their winners{CD FG and Arlington} , close their losers{Ellis and Calder] , and get into the casino business.
      Calder is more valuable as raw real Estate and there is NO way to save "the pea patch".It's time to make some money for the investors and not just for the management and board.

    • >>...the racing industry is dying. there will >>be no carcass left for ubet to suck off if >>things...

      I'm not so sure why everyone is so quick to declare horse racing one foot in the grave... sure the industry is having it's problems, but it's more like a broken arm bone, not congestive heart failure... weren't the Triple Crown handles up this year? I know the Breeder's cup was...

      -------------
      All-sources handle on the Oct. 29 Breeders' Cup World Thoroughbred Championships at Belmont Park was a record $124,009,593, up 2.5% from the $120,897,141 wagered last year when the event was held at Lone Star Park.
      Though Breeders' Cup and the National Thoroughbred Racing Association set a goal of 9% handle growth for the Cup each year through 2010, officials indicated they were satisfied with the numbers given the circumstances. There were 10 races on the Cup card this year versus 12 last year, and several secondary pari-mutuel operations weren't allowed to take the signal this year; those sources produced about $13 million in handle last year.

      In addition, business was expected to be down in hurricane-ravaged regions of Florida and Louisiana.

    • The racetracks IMHO do not treat the bettor that goes to the track in a way that they would choose the track over the ADW.I use to frequent Maryland tracks,now I use AmeriTab...free replays.....Why should I go to Pimlico Simulcasting,gas money...food prices ,flu,lack of comfort and if Iwant a little comfort I have to pay extra for the smokey sports palace and eat a minimum food bill.The tracks want slots and I believe MECA would be smart to pursue poker if they can't get slots in Maryland.

    • i could not disagree more. the racing industry is dying. there will be no carcass left for ubet to suck off if things keep going the way they are. all law, anti trust law included, recognizes that there has to be a price at which survival of an industry is not compromised, no matter how many players are involved. this administration especially is not going to tell an industry it has to go into insolvency to provide a product on uneconomic terms to the likes of ubet, which is nothing more than intellectual property shop preying on a dying industry.

      there will be one primary track operator - or an alliance of two - before this decade is out simply because that is the only way the industry will survive. how long do you give chdn to survive if it does not get slots at calder or ap or in kentucky? it is shrinking and, like meca, its real estate is worth something so it can string life along a bit longer. but where does that lead? it does not have a viable business and a major of reason is it does not receive sustainable value for its product.

      to my mind, chdn, meca, penn etc have been far too forgiving in not pursuing a fair price for their signal at home and overseas. i would hire some disney-type lawyers and go after the illegal offshore operators for a start. you might not shut them down, but you could make more it expensive for them to rip off the track signal. and the chop shops, and i include ubet in that category, should have to pay more for the signal. the survival of the industry depends on it.

      ubet is so small a player and i really can't see how it has any weight to throw about when the next consolidation occurs.

    • Betonallfours hinted at it. Any collusion between the #1 and #2 race track companies to keep content away from certain ADW operations to the betterment of their own ADW operations would be violative of antitrust laws. It is far too late for them to do that now. Maybe 6 years ago when ADW was in its infancy and there were only a handful of companies. But not anymore. The market has been established for ADW. There can be consolidation, but it will be scrutined for competitive effect. Included in antitrust regulation is anti-competitive pricing policies.

      MECA and CHDN might have had a chance years ago to combine and control the ADW market. However, now the market, as determined pursuant to antitrust laws and regulations, has been established. There are numerous players, some large, some small. For the same reason why MECA and CHDN could not work together, even indirectly, to set discriminatory or anti-competitive pricing, TVG and UBET would likely run afoul, or at least highly scrutinized, if they got together at this time.

      The United States has antitrust laws to protect just the scenario you described whereby MECA and CHDN combine to the detriment of other ADW's in terms of content and fees. The market has been established in ADW. The train has left the station in terms of the ADW market.

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