Mgt gets a little aggressive
12/31/97 Colonial Downs To Double Races, Increase Marketing In
1998
By Mark Yost
Staff Reporter
RICHMOND, Va. -(Dow Jones)- Moving its racing card to
Thursday nights from Wednesday afternoons is just one of the
many changes that Colonial Downs Holdings Inc. Chief Operating
Officer Ian M. Stewart said will take place in 1998.
In an interview with Dow Jones, Stewart said the company hit
some bumps as it rushed to open the first season of horse racing
in Virginia since the Civil War. But if investors look beyond
some of the short-term problems, he said, they will see that the
New Kent County horse racing and parimutuel betting facility has
a bright future.
"Our biggest objective for 1998 is to get past some of the
finance issues," said Stewart, who has long been the company's
chief financial officer and took over as chief operating officer
when Jim Peterson announced his retirement Dec. 10.
Beyond that, Stewart said Colonial Downs will look to focus
on current operations rather than adding new facilities in 1998.
The track plans to more than double the number of races it
hosts to about 80 from 30 in 1997. The 1998 season also will see
its first harness racing meets from April 24 to July 5, and the
prestigious Breeder's Cup on Nov. 7-15.
Most important, Stewart said, management will apply what they
learned in Colonial Downs' first season. For instance, Wednesday
afternoons were the worst day for attendance and wagering. So
this year, races will be run three nights a week, Thursday
through Saturday, with day races on Sunday.
Stewart said 1998 will be easier because the track won't be
racing to complete construction and putting on a program. He
said the track will focus on promoting its daily suite rentals,
which cost $1,000 and allow up to 30 guests. Similarly, it will
focus more on its "Groups on the Green" program, in which up to
50 patrons can rent a catered tent alongside the track for
$1,000 a day.
While Colonial Downs hopes to draw more spectators, he said
he believes it was partly his fault that investors focused too
much on attendance and per-capita wagering during the 1997
season.
Stewart noted that immediately after an opening-day crowd of
more than 13,000, average attendance dropped to about 2,500.
But, it rose steadily over the season, peaking at about 4,200
toward the end. Preseason estimates had put average daily
attendance at about 5,000.
Similarly, betting was off, averaging about $70 a person
compared with preseason estimates of $100.
Besides the group marketing campaigns, he said the track
plans more special events for 1998, such as post-race concerts
and corporate catering.
One innovation Colonial Downs won't try is casino gambling,
even though there was talk of merging the company with a casino
CEO Jeff Jacobs owns in Colorado.
"Our core business is horse racing," Stewart said. "That's
what we're going to focus on and that's what is going to
continue to generate strong revenues for us in the future."
But there are a few obstacles in the way.
Colonial Downs is going through nonbinding mediation with its
primary contractor, Norglass Inc., to settle a construction-cost
dispute. Stewart said he is restricted in what he can discuss
about the matter but did say news reports misstated the dollar
figure.
He said Norglass and Colonial Downs disagree over about $6
million in construction billings and about 85% of that has been
resolved by Robert Beck, a Virginia Racing Commission member
who's mediating the dispute. The next mediation meeting is
scheduled for early January, Stewart said.
Another setback for Colonial Downs was the Nov. 4 defeat of
three referendums seeking voter approval for new Satellite
Wagering Facilities in Roanoke, Martinsville and Fredericksburg,
Va.
Although the company is licensed to operate six such
facilities, Stewart said it has "no specific plans" to expand
from the four it operates in Richmond, Chesapeake, Hampton and
Brunswick County, Va.
Copyright (c) 1997 Dow Jones & Company, Inc.
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