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Maryland got deeper into the horse racing business Thursday, announcing it has finalized its purchase of the rights to the Preakness Stakes and the Black-Eyed Susan Stakes for $85 million.
The purchase keeps those properties out of the hands of Churchill Downs Inc., the owners of the Kentucky Derby, who announced plans this spring to buy rights to those races from 1/ST Maryland LLC for that amount. But聽 1/ST鈥檚 previous deal with Maryland gave the state the right to match any offer for the sale of rights to those races, which the state said in June it would do.
State officials were quick to note Thursday that no tax dollars will be used for the purchase. Funds for the deal will come from notes issued by the Maryland Economic Development Corp. (MEDCO). which will be repaid with funds generated by the two races.
In a statement released by the goveror鈥檚 office, MEDCO CEO Tom Sadowski says the organization is 鈥減roud to have had the opportunity to conceive and execute a financial transaction that secures ownership of the Preakness and Black-eyed Susan IP and cements the success of horse racing in Maryland for generations to come.鈥�
By buying the Preakness, the state not only guarantees that the race remains in Maryland, but it ends regular licensing fee payments to 1/ST Racing, that would have risen over time.
Gov. Wes Moore (D) said in the statement that horse racing is 鈥渁 cornerstone of Maryland鈥檚 history, culture and economy,鈥� which is why it鈥檚 important to own the rights to the Preakness.
鈥淲ith this final acquisition we are not only leveraging the Preakness鈥檚 iconic status and uplifting our horse racing industry, we are revitalizing the communities that directly benefit from the economic opportunities of the race,鈥� Moore鈥檚 statement said.
The Preakness is the second leg of racing鈥檚 storied Triple Crown, which begins in May with the Kentucky Derby and ends five weeks later with the Belmont Stakes.
The state鈥檚 purchase of intellectual property rights to the two races is the latest in a string of investments in the horse racing industry. The Maryland Stadium Authority owns Pimlico, the historic track where the Preakness has been run for more than a century, and it is spending about $400 million for a complete teardown and rebuild of the facility, which is going on now.
The state is also in the process of buying the only other thoroughbred track in the state, Laurel Park, which hosted this year鈥檚 Preakness while Pimlico is under construction. Plans call for Laurel Park to be converted to a state-owned training facility.
The state also owns Shamrock Farms in Carroll County, which it had planned to turn into the state training facility, but it abandoned those plans recently when it encountered financial and logistical problems with the site. It is currently deciding what to do with that property.
As the owner of the Preakness and Black-Eyed Susan, the state will be responsible for running those races every year. All other racing days will be run by the Maryland Jockey Club, a nonprofit established under state law.
The state said in its announcement that the Maryland Jockey Club has secured partnerships with Oak View Group for sponsorship growth and KO Productions for event production. It also said that while it owns the intellectual property rights to the races, the state 鈥渞emains open to identifying areas of mutual interest with Churchill Downs and other industry partners to benefit the broader Triple Crown and the sport of horseracing.鈥�
鈥淲ith all assets now residing with the State, we will work closely with the Maryland, Baltimore and Park Heights business communities to showcase the Preakness on the national stage,鈥� said Bill Knauf, president and general Manager of the Maryland Jockey Club, in the statement.
