Damp rain affects Derby revenue, according to Truist analyst's assessment
Half a Million Bucks Missing: Rain Spoils Kentucky Derby's Record-Breaking Betting Haul
Last weekend's Kentucky Derby may have set record-breaking betting numbers, but the rainy weather left Churchill Downs with a four-million dollar cash-flow shortage. That's the word from Truist Securities analyst, Barry Jonas, in his May 5 investor note.
According to Jonas, the sudden downpour on Derby Day scared away those spontaneous ticket buyers, wrecking the cash flow. However, he's optimistic about the future, pointing at a strong setup for growth next year, thanks to favorable pricing, smaller projects, and a new NBC contract.
The Kentucky Derby welcomed around 100,000 spectators to Churchill Down's iconic track in Louisville, Kentucky. But this was a seven percent drop compared to 2022, and the analyst blames the lousy weather for the decline.
Despite the smaller crowd, the handle leaped 11 percent to $234.4 million, with the entire card recording an impressive wagering amount of $349 million, a whopping nine percent increase. For the week, betting surged six percent to $473.9 million.
Last year, the Derby Week series marked the completion of an $80 million renovation of the Starting Gate Pavilion & Courtyard, shrinking the seating capacity by 10,000. While 2022's event saw a record $32 million in cash flow, Jonas projects this year's Running of the Roses to pull in $28 million to $30 million due to fewer last-minute ticket purchases.
Online betting handle with TwinSpires for the entire May card skyrocketed 17 percent, reaching $108 million, up from $92.1 million in 2022. For the Derby proper, it was a record $73 million, a massive 20 percent increase.
Television viewership rose eight percent at peak moments, attracting 21.8 million viewers, with an average of 17.7 million eyes on the screen. This marked the highest TV rating since 1989, and a remarkable six percent improvement from 2022.
Streaming ratings for Derby Day witnessed a 34 percent boost, making it Peacock's most-watched Saturday program since 2024's NFL playoff games. A more lucrative TV contract kicks in from 2026, covering the Kentucky Derbies until 2032.
Despite the cash-flow disappointment last weekend, Jonas sees better days ahead, thanks to renovations at The Mansion and the Finish Line Suites, a $30 million project, and the renewed NBC contract, which he sees as a $10 million upside. Also, deriving from subdued prices in 2025, he anticipates the introduction of "dynamic pricing" in 2026.
"We also see opportunity for further growth during Derby Week beyond the Derby and Oaks," Jonas added. "We expect management to announce smaller-scale projects to incrementally grow the Derby race over the coming months." From his perspective, it seems like the rain has returned to Churchill Downs, but there's still a silver lining hiding behind the clouds.
- Despite the rain spoiling the Kentucky Derby's record-breaking betting haul, Truist Securities analyst Barry Jonas predicts better financial prospects for future racing events.
- Barry Jonas attributes the cash flow shortage at the Kentucky Derby to the impulse buyers who were scared away by the precipitation.
- despite a seven percent drop in spectators compared to 2022, the wagering amount at this year's Kentucky Derby saw a remarkable nine percent increase, reaching $349 million.
- In anticipation of revenue growth, Barry Jonas points to favorable pricing, smaller projects, and a new NBC contract as factors that will boost the financial performance of horse-racing events in the future, including the Kentucky Derby.
