Maryland will match the $85 million offer from Churchill Downs Inc.
Churchill Downs Inc. is no longer acquiring the intellectual property of the Preakness Stakes and Black-Eyed Susan Stakes after the state of Maryland stepped in as a buyer.
CDI announced its $85 million deal to acquire the IP rights to the Preakness Stakes and Black-Eyed Susan Stakes in April, with the acquisition having been expected to complete soon.
However, Maryland Governor Wes Moore formally announced on Thursday that the state would exercise its right of first refusal to match CDI’s $85 million offer.
“The Preakness Stakes is more than just a race; it is a cornerstone of Maryland’s history, culture, and economy,” said Governor Moore. “Our administration has made historic investments to revitalize Pimlico Race Course and secure the long-term sustainability of the Maryland horseracing industry.
“This decision secures a vital asset for our state, allows Maryland to shape its horseracing destiny, and by leveraging the Preakness’s iconic status and partnering with industry experts to enhance the fan experience, preserve Maryland’s position as a key power player in the Triple Crown for generations to come.”
Maryland already owns Pimlico Race Course, home of the Preakness Stakes, and is in the process of acquiring Laurel Park Race Course, which hosted the Preakness Stakes this year while Pimlico is being renovated.
The State said that the acquisition of the Preakness IP rights completes its control over the essential assets of the race.
The governor’s statement added that by owning the IP, the state will no longer be subject to the disadvantageous fee structure of the existing exclusive licensing agreement, which would have escalated costs for the state over time. “Instead, the State will operate under a model that prioritizes industry health and community benefit, consistent with the nonprofit model adopted by the Maryland Jockey Club.”
The acquisition will be funded through a tax-exempt revenue bond issuance by the Maryland Economic Development Corporation (MEDCO).
The governor said the state remains open to identifying areas of mutual interest with Churchill Downs and other industry partners to benefit the broader Triple Crown and the sport of horseracing.
Mark Anthony Thomas, president and CEO of the Greater Baltimore Committee, commented: “Ownership ensures that the decisions shaping the future of the Preakness are made in the interest of Maryland and that the value created through public investment benefits Maryland taxpayers, businesses, workers, communities, and the equine industry.
“We look forward to working alongside the State, the Maryland Jockey Club, and partners across Maryland to help maximize this opportunity and ensure the Preakness continues to grow as a source of pride, prosperity, and economic opportunity for generations to come.”
CDI chief executive Bill Carstanjen acknowledged the state’s move in a statement Thursday.
“We understand why the state of Maryland would decide to acquire the Preakness IP rights as a state-owned asset from 1/ST Maryland LLC,” he said. “We remain committed to working with the Governor and other elected leaders and horse racing constituents in Maryland to fully realize the potential of a redeveloped Pimlico and Preakness Stakes within the Triple Crown and the broader sports and entertainment landscape.”
Shares in Churchill Downs Incorporated (NASDAQ:CHDN) closed 0.58 per cent higher at $88.27 per share in New York Thursday.