What’s the Preakness IP deal mean for future?
Surprise deal has many scratching their heads
Frank Vespe
April 24, 2026
Tuesday’s announcement that Churchill Downs Inc. would purchase the Preakness Stakes and Black-Eyed Susan Stakes intellectual property caught much of the racing world off guard.
“Blindsided,” is how one Maryland insider put it.
The suddenness of the announcement, and the Thoroughbred industry’s love-hate relationship with Churchill Downs, fueled social media chatter, which could be summarized thusly:
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Sure, we’re happy to see the Stronachs out the door. But Churchill in? Oh, no… how will Maryland get screwed in this deal?
“I see how Stronach benefits. I see how Churchill benefits,” one person wrote on Facebook. “I don’t see how Maryland benefits. I don’t see how Baltimore benefits. I don’t see how Maryland racing benefits.”
“If it wasn’t so sad, we’d all be laughing,” replied another.
Industry sources have mostly struck a different tone. The Maryland Jockey Club (TMJC) issued a statement that said, in essence, that there’s nothing to see here.
“That announcement of that intended transfer does not affect TMJC’s right to full operational control and responsibility for the Black-Eyed Susan and Preakness Stakes,” the statement read, adding, “TMJC also controls the media rights and licensing for the Preakness Stakes, as identified in the Master Agreement between the State of Maryland and 1/ST Maryland LLC, dated June 28, 2024. None of that is affected by the potential Churchill Downs transaction.”
That agreement starts in 2027 and runs for 10 years, and TMJC president Bill Knauf said in an interview that he understood it to be renewable at the state’s option ad infinitum.
Churchill Downs Inc. CEO Bill Carstanjen acknowledged as much during a Thursday morning conference call to report the company’s first quarter earnings.
“Maryland is in control of the destiny of the Preakness,” he said, adding, “They have a war chest of about $525 million of funds that have been allocated to invest in racing, and they’re in control of that.”
Under the license agreement, the state will pay a base fee of $3 million annually – which increases by 2.5% each year – as well as 2% of gross handle during Preakness weekend. In 2025 that would have resulted in a total payment of nearly $5.8 million.
One view, then, is that the only thing changing is the name the state will write next to “pay to the order of” following each future Preakness. Knauf said he’s operating on the principle that it’s business as usual.
“We’re operating under the deal that was struck by the state, and we’ve been already planning for months for the Preakness ’27, as well as starting the search for the media rights with our consulting company,” Knauf said. “And so we’re going to continue on planning just as it was before.”
Then there’s what Maryland Thoroughbred Horsemen’s Association general counsel Alan Foreman termed the “optimistic look at it.”
No racing company has more effectively built and monetized an event than Churchill has the Kentucky Derby. CDI now has a vested interest in seeing Preakness weekend handle increase. The state and the Preakness could do a lot worse than having CDI in their corner, the thinking goes.
“We have started already a very strong dialog with the state on how we may be able to help them achieve [the goals of boosting the Preakness],” Carstanjen said. “We have a real team of experts here that do this on an absolute world-class level, and certainly those resources and efforts are available to the state if they seek our help and would like our help in any way.”
“We’ve had some initial conversations with [CDI], and they’ve said they’re available as a resource to us, which is great,” Knauf said. “They have an incredibly successful Kentucky Derby, which is what they’re known for: putting on probably the biggest racing event.”
Of course, CDI is also known as the company that shuttered Arlington Park, one of American racing’s jewels, thus the online negativity towards the company.
Whether the naysayers or advocates have it right in this case remains to be seen. One thing’s for sure: this story likely has not yet reached its conclusion.
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