Churchill Downs Inc. to Purchase Turfway Park

So much for a showdown over winter racing dates in Kentucky. Churchill Downs Inc. announced Oct. 3 it plans to purchase Turfway Park, completely overhaul the grandstand of the Northern Kentucky track, and add a historical racing facility in a $150 million development.

CDI said it has signed a definitive agreement through its wholly owned subsidiary NKYRG to acquire Turfway in Florence, Ky., from Jack Ohio, an affiliate of JACK Entertainment and Hard Rock International, for total consideration of $46 million in cash, subject to certain working capital and other purchase price adjustments.

The closing of the transaction is contingent upon approval by the Kentucky Horse Racing Commission. The KHRC has scheduled a special meeting Oct. 8 in order to consider the change of control of Turfway. If approved, the parties expect to close the transaction shortly thereafter. 

CDI previously said it would pursue building a new track in Northern Kentucky that would seek the winter racing dates that were traditionally awarded to Turfway, but in purchasing Turfway, the new track, which would have been called New Latonia Racing & Gaming, would be out. Instead, CDI said Oct. 3 that if it's approved to purchase Turfway, it would withdraw its dates application for the proposed track and completely overhaul the Turfway grandstand and add a historical gaming facility.

Immediately after closing, CDI will commence planning for the demolition of the existing grandstand after the 2019-20 meet, making way for development of Turfway Park Racing & Gaming, an up to $150 million (including the announced purchase price) state-of-the art live and historical Thoroughbred racing facility.

In its release, CDI said that subject to KHRC approval, the 2019-20 winter Thoroughbred racing meet at Turfway will be conducted on racing dates previously awarded to Turfway for December 2019 and in accordance with the schedule of racing dates submitted by JACK to the KHRC for 2020.

"We are thrilled to welcome Turfway Park to the Churchill Downs racing family," said Kevin Flanery, president of Churchill Downs. "Our team is poised to restore Turfway to its former glory, anchored by northern Kentucky's first historical racing machine facility. The result will be a first-class racing product fueled by increased purses that keeps high-quality horses in Kentucky year-round and appeals to horseplayers nationwide." 

An updated Turfway Park is anticipated to support up to 400 direct full- and part-time equivalent positions and create an estimated 800 direct construction jobs. The project will include a historical racing machine facility featuring up to 1,500 machines, a state-of-the-art clubhouse, food/beverage venues, and a new inner dirt track to complement the existing one-mile synthetic main race track.

The transaction is structured as an acquisition of all the outstanding equity of Turfway Park, and the $46 million acquisition price will be funded with cash from CDI's balance sheet. Of this amount, $36 million (subject to certain working capital and other adjustments) will be paid to JACK and be capitalized on CDI's balance sheet. The remaining $10 million will be paid to Hard Rock and will be expensed.