CDI to yield control of Calder racing, HRTV to Stronach Group

CDI to yield control of Calder racing, HRTV to Stronach

Group

Churchill Downs Inc. (CDI) 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.

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 (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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