Churchill Downs postpones the Kentucky Derby, plans to move the entire Triple Crown

Churchill Downs Inc. (CDI) CEO William 'Bill' Carstanjen said Tuesday that moving the Kentucky Derby was a difficult and unfortunate decision but also a necessary one as the country tries to clamp down on the spread of the COVID-19 virus. 

During a conference call, Carstanjen said there are now plans in the works to move the entire Triple Crown — rounded out by the Preakness and the Belmont Stakes — to September and October if all parties can come to an agreement. The Preakness is scheduled for May 16 while The Belmont Stakes wraps up the Triple Crown on June 6.

Carstanjen confirmed that the Derby will move from May 2 to Sept. 5 while Oaks will be held the day before on Sept. 4. The change is pending approval by the Kentucky Horse Racing Commission, which should come Thursday. “We sincerely regret any inconvenience this causes for our great fans,” Carstanjen said during the call, as reported by Louisville Business First, adding that “our company’s true legacy is one of resilience.” 

Churchill Downs also has suspended operations at its other casino and racetrack properties across the country, including Derby City Gaming in Louisville.

Carstanjen told reporters that these dates were chosen for Oaks and Derby because of the availability of hotel rooms during this weekend and a slimmer events lineup for NBC, the Kentucky Derby's broadcast partner. Pushing it to September also gives the country more time to halt the spread of the coronavirus and will give guests more time to reschedule travel and lodging arrangements, Carstanjen said. “None of this has or will be simple,” Carstanjen said. “However, we believe we can create a special opportunity for our fans.” 

Churchill Downs Racetrack President Kevin Flanery said the company will look to add additional races to its schedule this summer so horses can accumulate points to gain eligibility.  “We’re going to adjust so the best horses in the best form compete in the Derby,” Flanery said. 

When asked if CDI has contingency plans in place should the coronavirus not be contained by early September, Carstanjen said he is confident in the move after consulting with local, state and national experts. He also said the idea of running the Derby without spectators was not appealing to the company.  “The Kentucky Derby is a participatory event. There’s an energy and magic that comes from the fans,” he said.  

The relocation of the Derby to September has also impacted all the events leading up to it, including Thunder over Louisville, which has been postponed until August 15, and the Kentucky Derby Festival. KDF will release new dates as soon as they are finalized. Information regarding ticketed events, participant registration and refunds will also be forthcoming. The Derby festival produces more than 70 events in the weeks leading up to the first Saturday in May. Those will now shift with the Derby.

The postponement of the Derby has mostly been met with positivity as local agencies have said they can rework their schedules to align with a September Derby.

CDI's stock has been bludgeoned on Wall Street in recent weeks. The company's stock was down 1% around 11:39 a.m. Tuesday, trading at $76.36 per share. The stock was trading at $164 in February.

CDI also announced on Monday that it has provided notice to a group of lenders pursuant to a previously approved credit agreement that it plans to draw down on the entire remaining available amount of $675.4 million under the agreement, resulting in a total of $700 million that is currently outstanding. 

"The Company elected to draw down the remaining available funds from the Revolver to ensure it maintains ample financial flexibility in light of current uncertainty in the global markets," the company said in a filing with the U.S. Securities and Exchange Commission. 

That same day, it also announced an amendment to the credit agreement that extends the maturity and lowers the upper limit of applied spreads for loans. The amendment extended the maturity from December 27, 2022 to at least September 27, 2024 while lowering the upper limit of the applied spreads for loans from 2.25% to 1.75% and for commitment fees from 0.35% to 0.30%, according to the release.