Canterbury: Trouble Recouping Losses from Shutdown
Canterbury Park in Shakopee, like many other businesses throughout Minnesota, was hit hard during the state government shutdown. In fact, it lost an estimated $3 million during the 20-day period.
Canterbury Park Holding Corporation, which owns the park, on Friday reported a net loss of $348,056 for its second quarter, which ended on June 30. And the effects of the shutdown won't be apparent until third-quarter financial results are reported-but the company warns that the impact will be significant.
“While we won't know the full impact until the racing season is over, we expect the suspension of our operations for 20 days in July will have a material, adverse effect” on third-quarter and full-year results, President and CEO Randy Sampson said in a statement.
Sampson told Twin Cities Business on Tuesday that he “can't be specific” regarding the projected impact of the shutdown on third-quarter and full-year results, in part because he's uncertain himself. “But I do expect a substantial negative impact and [the company to report] a quarter that will be down from last year's third quarter,” he said.
The company reported a loss of $132,875 on revenue of $12 million for the third quarter last year. The full-year net loss totaled $992,206, while revenue totaled $39.9 million. Canterbury is among Minnesota's 90-largest public companies.
Canterbury's operations are regulated by the Minnesota Racing Commission (MRC), an agency that was forced to cease operations on July 1 under the shutdown. The park was forced to close because the MRC must be operational in order for Canterbury to keep its doors open.
Canterbury told Twin Cities Business on July 21-the first day it resumed operations following the shutdown-that its leaders were seeking ways to recoup those lost funds-possibly by adding races, extending the racing season, and rescheduling various events.
Sampson on Tuesday said that Canterbury has run some additional races and will extend the season with several races at the beginning of September-but the added events are more an effort to help horse riders and owners recoup some of the money they lost during the shutdown than to make a significant impact on Canterbury's revenue. “We don't expect it will be particularly helpful for our bottom line,” Sampson said. Because the recently added races weren't scheduled prior to the racing season, he doesn't expect attendance to be as high as during regularly scheduled events-especially those around the Fourth of July weekend that were missed due to the shutdown.
And even if the additional races generate some revenue, Sampson pointed out that about half of the park's revenue during the peak racing season comes from its card rooms and simulcasting, or live betting on races taking place at tracks other than Canterbury Park. Due to the nature of the live simulcasting events, and the fact that the card room is open 364 days a year, those lost revenues cannot be recovered, Sampson said.
Since resuming operations, it's been “more or less business as usual,” Sampson said. But he still projects that the park lost about $3 million as a result of the shutdown-about 7.5 percent of the company's revenue last year. He said he's unable to estimate how much of that money will be recovered because most of the added races have yet to occur, but he predicted that it will be “a relatively small portion-less than half.”
Canterbury Park Holding Corporation on Friday reported a net loss of $348,056 for its second quarter, which ended on June 30. That's compared to a loss of $380,969 during the same period in 2010. Revenue for the quarter totaled $11.67 million, up from $11.45 million during last year's second quarter.
In its second-quarter earnings release, Canterbury said that the proposed “racino” legislation-which wasn't passed in the most recent session-could bolster its business and benefit the state, and that it will continue to support the legislation.
“Studies have shown that a racino would generate much needed revenues for the State of Minnesota, while creating a significant number of jobs in the racing, hospitality, and equine industries,” Sampson said in a statement. “A racino would also enable Minnesota's horse racing industry, which already employs several thousand individuals, to remain competitive and viable.”