Louisville Business: Churchill Downs Sues Horsemen, GE to Sell Appliance Park?

Churchill Downs

(above photo of Churchill Downs from kentucky.gov)

If you’ve been following horse racing with more than a casual interest this spring, you might be aware of the until-now relatively low-key feud between Churchill Downs and two different horsemen organizations (generally horsemen include owners and trainers) over online wagering. Well, that simmerin’ pot came to an angry, boiling head yesterday as Churchill filed suit (from Business First):

The ongoing battle between Churchill Downs Inc. and Kentucky horsemen escalated Wednesday afternoon, when the racetrack operator filed suit against the Kentucky Horseman’s Benevolent and Protective Association, the Kentucky Thoroughbred Association and officers for each of the organizations.

Churchill Downs Technology Initiatives Co. and Calder Race Course Inc. also were listed as plaintiffs in the suit, which was filed in U.S. District Court for the Western District of Kentucky in Louisville.

In the suit, Churchill Downs Inc. and its affiliates allege that the KHBPA and the KTA violate the Sherman Antitrust Act by blocking the distribution of Churchill Downs’ simulcast signal to national advance-deposit wagering, or ADW, sites, including Churchill’s own ADW site, www.twinspires.com.

The only races the horsemen allowed to be simulcast during the current Spring Meet were the Kentucky Oaks on Friday, May 2, and the Woodford Reserve Turf Classic and the Kentucky Derby on Saturday, May 3.

The suit amends a complaint Churchill filed on Thursday, April 24, against the Thoroughbred Horsemen’s Group, the Florida Horsemen’s Benevolent Protective Association and the officers of those organizations.

Those organizations sought to block the simulcast of Calder races to out-of-state, off-track betting sites.

In both cases, the horsemen are seeking a greater share of the money that bettors wager at off-track betting parlors and on Internet betting sites.

“It is in the best interest of our racetrack, our horsemen and certainly our customers for the Churchill Downs signal to be made available to racing fans throughout the country,” Churchill Downs Inc. executive vice president Steve Sexton said in a news release. “Unfortunately, our negotiations with Kentucky horsemen have not advanced.”

The suit is the latest salvo in the battle between Churchill Downs Inc. and the horsemen.

Beginning today, Churchill cut purses for Spring Meet races by 20 percent.

The Courier-Journal‘s article on the same issue adds the following comment from Churchill’s opposition:

“I don’t believe we’ve breached anything,” David Switzer, executive director of the Kentucky Thoroughbred Association, said in an interview.

In other big, maybe-going-to-affect-a-lot-of-Louisvillians news, the Wall Street Journal is reporting that General Electric is looking to sell its appliance unit, which would “mean more uncertainty for the 5,000 workers at Appliance Park” (from the C-J):

GE has hired Goldman Sachs to run an auction for the appliances unit, which could fetch up to $8billion, the Journal reported.

“We just don’t comment on this kind of speculation,” Kim Freeman, spokeswoman for the Louisville-based Consumer & Industrial division, said when asked about the report. Goldman Sachs also would not comment on the report.

IUE/CWA Local 761 President William T. “Tommy” Spires said he hadn’t been aware of any sale plans.

“As far as I’m concerned, it’s business as usual,” Spires said. “I’ll continue to do everything I can to save the jobs here. I’m as shocked as anybody else at this time. I just find it hard to believe.”

Through a spokesman, Mayor Jerry Abramson said he and officials of Greater Louisville Inc., the local chamber of commerce, have been talking to GE managers during the past two weeks about rumored job losses at Appliance Park.

Abramson said he spoke to Jim Campbell, CEO of GE Consumer & Industrial, which also includes lighting, and was told the company was looking at job reductions across the board but hadn’t made a decision about Louisville.

“That conversation didn’t include the possible sale of the appliances division,” Abramson spokesman Chad Carlton said. “Certainly, we’ll be proactive in the event they want to go that route and make the case, to either GE or new owners, that Louisville is a great place to continue operations.”

About half of Appliance Park’s 5,000 workers are in white-collar jobs in areas such as marketing, finance, and research and development. The others are union workers who build dishwashers, washing machines and top-freezer refrigerators.

…The appliance business, which for years used the slogan “We bring good things to life,” has been the public image for GE and provided most of the company’s consumer products.

Last year the Consumer & Industrial business accounted for less than 8 percent of GE’s overall revenue of almost $173billion.

As GE was confirming plans to sell its plastics business in January 2007, Immelt was asked about other industrial businesses it might shed and responded, “The other obvious candidate … is Consumer & Industrial.”

Reasons for keeping it, he said, were that the GE brand was important to the business, it returns major amounts of cash to the parent company and presents innovation opportunities.

So it’s not entirely clear what will happen to Louisville, but we’re guessing we might soon see a return of the “GE isn’t me” t-shirts we remember from Appliance Park layoffs in the 1980s.


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