SHAKOPEE (AP) -- Randall Sampson can cite any combination of numbers as evidence of a financial turnaround at Canterbury Park in Shakopee.
But the most intriguing indication that the horse racing facility is on the right track has little to do with annual revenue comparisons or analyst projections of rising share values in parent company Canterbury Park Holding Corp.
Sampson, instead, points to the state's horse farms. In recent years, Minnesota averaged between 135 and 150 births of thoroughbred foals annually. This year, that number has shot up to 225 evidence, he said, that state breeders believe Canterbury is going to be around for a long time to come.
"It's a good indication of what is going on in Minnesota," said Sampson, Canterbury's president and chief executive. "No one wants to be associated with a loser, like back in the 1980s when this place was going in the tank."
Canterbury's 61-day season drew an average of 4,010 patrons and $704,967 in total handle per day. The on-track live racing handle averaged $260,946, down 0.11 percent from last year, and on-track simulcast handle averaged $229,187, up 4.5 percent.
Purses of $120,000 per day drew a record 1,600 horses.
Ironically, now it's the rest of the horse racing industry that appears to be tanking. With casino and online gambling taking a bigger piece of U.S. betting revenue, popular horse tracks such as Santa Anita and Oaklawn have watched attendance and on-track "handle," the amount wagered on horses, slip in recent years.
Canterbury, though, has managed to beat the odds.
At the end of its live season on Labor Day, attendance was running about 2 percent ahead of a year ago, and the company this year expects to post a profit of about $1.5 million. That's a far cry from the mid-1990s when the track was losing about $1 million annually and in more recent years when it was barely eking out a profit.
Chuck Yahnke, of Le Sueur, president of the Minnesota Thoroughbred Association, said the improving fortunes of the track have helped revive his organization. Members are more active in breeding and racing horses than they were in the "dark years" before Sampson and his investment team took over Canterbury, Yahnke said.
"The relationship and the way the track has been run has never been better," he said. "These are very exciting times for breeders here."
Another sign of Canterbury's improving economic health was the decision by Sampson to hire the company's first chief financial officer this summer. David Hansen, a St. Paul native who has finance experience in both the casino gambling and horse racing industries, joined the firm as chief financial officer on July 2.
Sampson, himself a certified public accountant, previously held the CFO position along with other top management duties at Canterbury.
"There was the feeling that, with the card club and everything else going on, I was getting spread too thin," he said.
Sampson would be the first to admit that the Canterbury card club has contributed as much to the revival of the business as anything. The future of the track was questionable before the Minnesota Legislature approved a measure in May 1999 that cleared the way for Canterbury to offer card-playing facilities.
Sampson recalled thinking that consultants were exaggerating when they first told him years ago that a card club at Canterbury could generate up to $6 million a year in revenue.
Turns out the experts weren't even close. The 15,828-square-foot club opened in April 2000 and by the end of the fiscal year last December had taken in $11 million, or $43,000 a day. Sampson expects revenue to approach $16 million this year. Part of the profits from the club are used to fatten racing purses, which in turn draw more horses and bettors to the track.
To say that the club saved us might be a bit of an overstatement, but it certainly put us over the hump," he said.
Jack Nielsen, an analyst with the Miller Johnson Steichen Kinnard investment firm of Minneapolis, said the addition of the card club has stabilized the business and made it a better long-term investment.
He credited management with making other creative moves to bring in money, including sponsoring outdoor concerts in the summer, snowmobiling competitions in the winter, and craft shows, boat shows and other events during the rest of the year. Sampson has even made money by leasing empty horse barns for winter storage of boats and cars.
"Given the early success of the card club and the rejuvenation of the live racing, I don't see any time in the near future when that entity would fail," Nielsen said.
Still, the company's stock has lagged. After hitting a five-year high of $11.94 on April 20, 2000 one day after the opening of the card club shares fell and have stagnated in the $7 range for much of the past year.
Sampson said one problem with Canterbury shares is that they are thinly traded and generally held by insiders who are racing fans. There is little opportunity for institutional investors to gain a major stake in the firm, he said.
Nielsen, though, describes himself as bullish on Canterbury and said in a research report earlier this month that shares could hit $11 within the next year. Besides the new money from the card club now accounting for roughly 45 percent of annual revenue Canterbury is in good financial position because it sits on a real estate gold mine, he said.
Canterbury is situated on 355 acres in a rapidly developing suburban area, about 20 miles southwest of downtown Minneapolis. Nielsen estimates the land is worth $25 million, or roughly $6.50 a share, fully diluted. Even if Canterbury went out of business and had to sell the land, investors would get most of their money back at the current trading price, he said.
But selling the Canterbury site for housing or business development seems far from Sampson's mind these days.
He's talking about a secondary stock offering or some other financing in the future to help raise millions for other entertainment options on the site, including a hotel, shopping area, golf course or the Holy Grail of money makers, casino gaming. That, of course, would require an act of the Minnesota Legislature, Casino gambling now is allowed only on Indian reservations in the state.
Given the Legislature's past friendliness to Canterbury -- the best example being the bill that allowed the card club to open -- Sampson thinks off-reservation casino gambling could be approved in Minnesota someday.
The potential for expansion is one reason he brought in Hansen, the new CFO. Hansen, the former director of finance at the Treasure Island casino in Red Wing, helped take that business through $47 million in hotel and casino expansions in the late 1990s.
Sampson never expected to find himself in this position.
Canterbury, which was built for $80 million in 1985, was forced to close in 1992 after collapsing in financial ruin. As the president of the Minnesota Thoroughbred Association at the time, he and others in the state horse racing industry began looking for a buyer to revive the track.
In the end, a group of investors led by Sampson, his father Curtis Sampson and Dale Schenian bought Canterbury for $8 million from Minneapolis financier Irwin Jacobs and reopened the facility in 1994.
Brainerd Dispatch ©2013. All Rights Reserved.