Archives for April 2016

WHY A DARTMOUTH SORORITY IS SO WRONG ABOUT THE KY DERBY

The Kappa Delta Epsilon sorority at Dartmouth University normally holds a Kentucky Derby party where guests dress up and sip mint juleps…but no more. The event has been cancelled.

During the 2015 party, Black Lives Matter protestors said the sorority was “recreating an Antebellum South atmosphere…” that was racist and elitist. The protestors chanted that “Derby..is the face of genocide…and police brutality.”

The sorority vice president explained that the Kentucky Derby party theme was abandoned because of its “racial connotations” and “pre-war southern culture.”

Following are several historical facts that the sorority might have considered before terminating its annual Derby party and, in effect, agreeing with protestors’ uninformed accusations about the event.

1. The first Kentucky Derby was held on May 17, 1875, ten years after the American Civil War ended. Additionally, Kentucky was part of the union, not the confederacy, in the Civil War.

2. Thirteen of the 15 jockeys in the inaugural Kentucky Derby were of African-American ancestry , including the winning jockey Oliver Lewis.

3. In marked contrast to the history of other sports–and in particular Major League Baseball, the National Football League, college football and basketball, the PGA, and professional tennis– black Americans were prominent in horse racing from the very beginning.

The History Channel reported: “In the years following the Civil War, black jockeys dominated horse racing at a time when it was America’s most popular sport. African-American riders were the first black sports superstars in the United States, and they won 15 of the first 28 runnings of the Kentucky Derby…While the 1880s saw professional baseball draw the color line, not to be broken until the Brooklyn Dodgers called up Jackie Robinson in 1947, African-Americans continued to thrive on the track.”

Similarly, the first African-American golfer did not play in the Masters until 1975 (Lee Elder) and the first African-American tennis player did not win a Grand Slam tournament until 1956 (Althea Gibson). The first NCAA championship college basketball team with all black starters was in 1966.

4. Arguably the greatest jockey in American turf history is the late 19th century rider Isaac Murphy, with an unrivaled 34% win percentage and three wins in the Kentucky Derby.

Although it is factual that black jockeys were banned from the major American racetracks by about 1905, this was true of racetracks all over the United States, not just in the Jim Crow South. Moreover, a ban on African-American athletes was also in effect for the other dominant sport of the day, Major League Baseball, which prompted the creation of the Negro leagues.

5. Just as it did in the latter part of the 19th century, horse racing today provides lucrative opportunities for minority jockeys. Two thirds of the 18 riders in the 2015 Kentucky Derby, for example, had Hispanic surnames.

6. One of the premier events of the Kentucky Derby Festival is the “100 Black Men of Louisville Derby Gala” that raises funds to send disadvantaged high school students to college.
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Kappa Delta Epsilon replaced its supposedly racially tainted Kentucky Derby party theme with a theme the deep thinkers in charge evidently think is not objectionable in polite society, Woodstock.

Copyright © 2016 Horse Racing Business

CANTERBURY PARK 2015 OPERATING RESULTS

Canterbury Park Holding Company released its annual report (SEC 10K) on March 29, 2016. Canterbury is listed under the symbol CPHC on the Nasdaq exchange and has a market cap of about $44 million.

CPHC owns the Canterbury Park Racetrack and Casino in Shakopee, Minnesota near the Twin Cities. CPHC operates in three business segments, as follows:

Pari-mutuel wagering on live and simulcast Thoroughbred and Quarter Horse Racing. Live racing is held for approximately 70 days per year from May to September and simulcasting is held the entire year. The main competition comes from North Metro Harness Initiative, which operates Running Aces Harness Park about 50 miles from Canterbury Downs and offers Standardbred racing and a card room.

Total handle in 2015 was $70.3 million (versus $68.5 million in 2014) with live handle accounting for $12.5 million in 2015 and $12.3 million in 2014. Minnesota state law caps the takeout rate at 17% on straight wagers and 23% on exotic pools.

Unbanked card games (i.e. patrons compete against one another playing poker and other card games).

Food and beverage sales. CPHC has the fourth largest event space in the Twin Cities of 100,000 square feet.

In 2015, CPHC showed increases in net revenues, net income, and earnings per share over 2014. Net revenues in 2015 were $52.3 million, up by nearly 8% from the year before. Net income for 2015 was $2.7 million, an increase of 12.5% from 2014. Earnings per share were $0.64 in 2015 compared to $0.57 in 2014. CPHC has had a slow but steady increase in all these measure in the past five years.

The CHPC common stock price per share increased in 2015 from $8.98 at the beginning of the year to $10.59 at the close of the year, for an 18% price appreciation. The stock was at $10.36 per share at the end of the third quarter 2016. CPHC has a price-to-earnings ratio of around 16.75 and a beta of .12, which means that it has a weak correlation to the Nasdaq index. Short interest rose dramatically in March 2016, indicating that short sellers are increasingly betting on the stock price to decline.

Copyright © 2016 Horse Racing Business

OGDEN MILLS PHIPPS

Ogden Mills “Dinny” Phipps came from ancestors who had a deep and lasting effect on the United States. Left with famous lineage and great wealth, Mr. Phipps, like the late Paul Mellon, had a passion for horse racing…and both the Phipps and Mellon fortunes were made in Pittsburgh.

Horses campaigned by Mr. Phipps’ father and grandmother included such esteemed names as Bold Ruler, the sire of Secretariat, Buckpasser, Personal Ensign, Easy Goer, and many others. As the longest-serving chairman of the American Jockey Club, Mr. Phipps advocated for initiatives he believed to be in the best interests of horse racing.

Ogden Mills Phipps was one of the last links to the patrician families that once were commonplace in horse racing. It is fitting that he co-owned a Kentucky Derby winner, Orb, late in his life.

May he rest in peace and long be remembered for his many contributions to the sport he loved. His family will miss him and so will the sport and business of horse racing.