SBJ/November 9 - 15, 1998/No Topic Name
Casino interests boost Hollywood Park
Published November 9, 1998
Hollywood Park Inc.'s third-quarter earnings reveal just how much the company has transformed itself into a gaming concern.
Although named after its famous horse racing track in California, recent acquisitions have significantly boosted the percentage of revenue the company receives from casinos. In the third quarter ended Sept. 30, only 15 percent of revenue came from racing, compared to 16.4 percent in the year-ago period. And for the nine months ending Sept. 30, racetrack revenue was 21 percent of all revenue, down steeply from 35 percent in the year-ago period.
"Hollywood Park's revenues are becoming less and less tied to racing and more and more tied to the casino business," said Tom Ryan, a partner with Integrated Corporate Relations, a Westport, Conn., firm that consults the leisure industry.
"If the racetrack revenues are down 1 or 2 or 3 percent, it is irrelevant to shareholders," he added.
Racetrack revenue was down in the third quarter, a reflection of the softness in the off-track business. Hollywood Park takes bets on other facilities' events on the days it does not host races, and it is weakness in that business the company said is responsible for the decline in horse racing revenue. Revenue from the Hollywood Park RaceTrack fell to $11.68 million, down from $12.334 million in the year-ago period. And revenue from the company's Phoenix track, Turf Paradise, fell to $1.4 million from $1.6 million.
Total revenue jumped to $87.4 million from $85.2 million, boosted by the addition of the casino company Boomtown New Orleans. The company now controls six casinos in three states, two card club casinos in California, plus the two horse racing tracks.
The company said its third-quarter earnings were 8 cents a share, 2 cents short of analysts' expectations. Shares of Hollywood Park rose on Wednesday, however, the day the company released its earnings results. During midday trading shares were up 50 cents to $10.50.