Churchill Downs Inc. Purchases Preakness Stakes

Beginning in 2027, Churchill Downs Inc. will control the first two legs of the Triple Crown as the company on April 21 purchased the intellectual property rights to the Preakness Stakes (G1). The Louisville, Ky.-based company already owns the Kentucky Derby (G1), the top race at its namesake track, Churchill Downs. CDI announced Tuesday that it has entered into a definitive agreement to acquire the intellectual property, including all trademarks and associated rights, of the Preakness as well as the George E. Mitchell Black-Eyed Susan Stakes (G2) from 1/ST Maryland LLC, an affiliate of 1/ST Racing, for a purchase price of $85 million, subject to customary closing conditions. The Preakness intellectual property rights are subject to an exclusive license agreement pursuant to which CDI will license to the state of Maryland the intellectual property rights necessary to conduct the running of the Preakness and Black-Eyed Susan in exchange for an annual fee. CDI declined to provide further comment Tuesday but said that its CEO, Bill Carstanjen, would provide further details during the company's regularly scheduled earnings conference call with analysts and investors at 9 a.m. ET, April 23. CDI will release its first quarter financial results April 22 after the market closes. The Preakness, first run in 1873, is the second leg of the Triple Crown. The Black-Eyed Susan is a leading race for 3-year-old fillies traditionally conducted at Pimlico Race Course the day before Preakness. "This acquisition adds one of the most iconic brands in American sports to our portfolio and is consistent with our strategy of investing in premier Thoroughbred racing assets with long-term growth potential," Carstanjen said in a statement. "In keeping ownership of the Preakness intellectual property in the racing industry, CDI will support efforts to fully realize the potential of a redeveloped Pimlico and Preakness Stakes within the Triple Crown and the broader sports and entertainment landscape." The parties expect the transaction to close after the running of the 2026 Preakness. The transaction will be funded with cash on hand and the company's existing credit facility. The not-for-profit Maryland Jockey Club operates day-to-day racing in Maryland. Previously it had been owned by 1/ST Racing (The Stronach Group) through purchases that date back to 2002 by Magna Entertainment Corp., in which Frank Stronach had served as chairman. Maryland racing, as well as the Preakness, has been in transition in recent years. Last year marked the final Preakness at the old Pimlico Race Course. This year's Preakness will be conducted at Laurel Park before plans call for a return to a rebuilt—modern but smaller—Pimlico in 2027. Under a 10-year plan in place to run the Preakness at Pimlico, the new MJC has control of day-to-day racing in Maryland, while 1/ST Racing will conduct this year's Preakness and Black-Eyed Susan in 2026. That part of the plan is still in place. Also under the 10-year plan, 1/ST Racing was to receive a license fee as well as payments based on a percentage of handle of the Black-Eyed Susan and Preakness race days. With CDI now holding the intellectual rights to those races, it's expected that agreement will shift. (CDI should provide more detail on this Thursday and BloodHorse also has calls out to new MJC leadership.) MEC acquired 51% of the MJC tracks in November 2002 in a deal valued at $117.5 million. Under terms of an option agreement, MEC in 2007 paid De Francis Entities $18.3 million (plus interest) for the remaining interest in the MJC. A statement from 1/ST Racing noted the sale of the intellectual rights to the Preakness marks an exit plan from Maryland. "Bringing together two prestigious racing brands, the Kentucky Derby and the Preakness Stakes, is a significant step toward the successful longevity and growth of the American Triple Crown of Thoroughbred racing," said the statement from Belinda Stronach, chair and CEO of 1/ST Racing. "The agreement with Churchill Downs Incorporated to acquire ownership of the intellectual property rights of the Preakness immediately following Preakness 151 (this year's Preakness), closes our company's Thoroughbred racing chapter in Maryland. "1/ST is proud to have served as a steward of the Preakness Stakes and we are grateful to the fans, industry stakeholders, the state of Maryland, the city of Baltimore, and the community for their support. We remain focused on our core assets in California (Santa Anita Park), and Florida (Gulfstream Park) and supporting a strong and sustainable future for the sport." This story will be updated.