- Enhancement will happen on the firm’s famed Kentucky racetrack
- Victory Run will probably be situated between the First Flip Membership and the Skye Terrace
Churchill Downs (NASDAQ: CHDN) unveiled a brand new venture at its namesake racecourse aimed toward bringing extra high-end clients to the Kentucky Derby and Derby Week occasions.
Kentucky Derby winner Sovereignty. Churchill Downs mentioned it would spend as much as $300 million on the Victory Run venture. (Picture: Kentucky Derby)
The gaming firm mentioned it plans to spend $280 million to $300 million on the Victory Run venture, which will probably be located between the First Flip Membership and the Skye Terrace. Victory Run will substitute some field seats and getting old eateries with improved race viewing and up to date eating ideas.
This new four-story construction options a wide range of premium hospitality experiences with great views of the end line of the racetrack, and can embrace non-public suites, indoor and outside eating, and lined field seating,” mentioned the corporate in a press release. “The venture will substitute roughly 6,400 current seats with premium seating for about 7,800 company.”
The Kentucky-based gaming operator unveiled plans for Victory Run along side the discharge of its third-quarter outcomes on Wednesday.
Churchill Downs Betting on Extra Derby Week Success
Churchill is committing to new facilities on the iconic Kentucky monitor as an avenue for supporting the broader suite of Derby Week festivities and races. Within the 151st version of the “run for the roses” final yr, deal with for Derby Week and the Derby itself topped information.
Earlier this yr, the corporate forecast spending of as much as $920 million, with $400 million anticipated in 2025, on the Conservatory and the Skye Terrace on the monitor that hosts the Kentucky Derby. Growth and enhancement on the Skye Terrace will embrace elevating the variety of premium seats to 13,300 from 11,500. As is the case with these tasks, development on Victory Run is anticipated to begin earlier than the 2026 Derby and be accomplished upfront of the 2028 occasion.
Analysts are bullish on Churchill’s Derby-enhancing efforts, and a few imagine even the non permanent seating supplied by Victory Run previous to 2028 might help progress.
“We see a stable progress profile for the Derby over the following three years as administration has laid out its detailed plans,” mentioned Truist Securities analyst Barry Jonas in a word. “Final night time, CHDN introduced a brand new progress venture ‘Victory Run,’ which is able to provide upgraded (however non permanent) seating in 2027 and absolutely accomplished in time for the 2028 Derby. Administration is concentrating on a ~20% return on the $280M-$300M spend (~$60M) by yr 3 pushed by elevated pricing/facilities with solely a ~2% total enhance in seating capability. Administration additionally famous that the non permanent seating might doubtlessly drive progress in 2027 as nicely.”
Churchill Spending Seems Prudent
Gaming is a capital-intensive business, and analysts and buyers typically apply scrutiny to operators’ spending plans. The excellent news for Churchill Downs buyers is that the corporate isn’t signaling the issuance of latest debt as a part of the aforementioned spending program.
The aforementioned Derby-related tasks could possibly be extra flooring than ceiling as Churchill Downs appears to be like for extra methods to capitalize on the “Run for the Roses.”
“Regardless of the longevity of the Derby, administration nonetheless believes it’s within the ‘third inning’ of progress, with extra small to medium-scale tasks within the pipeline,” provides Jonas.
