Maryland Government Matches $85 Million Bid to Secure Preakness Stakes Intellectual Property Rights

Maryland Governor Wes Moore’s administration has officially matched Churchill Downs’ $85 million offer to purchase the intellectual property rights associated with the Preakness Stakes, securing state ownership of the race’s trademarks and branding. This development marks a significant shift in the management and control of one of horse racing’s premier events.

Historically, Maryland had leased the intellectual property rights for the Preakness Stakes, which included all associated branding and trademarks. This leasing arrangement had left the state vulnerable to changes in ownership and control. The Preakness Stakes has previously moved between various state entities and private operators, including 1/ST Racing, which managed this year’s race at Laurel Park due to renovations at Pimlico Race Course.

Governor Moore’s decision to match the Churchill Downs offer effectively ends the ongoing shuffling of ownership among racing properties. According to reports from Cohn, Chingarande & Carey of the Baltimore Sun, the state will now hold the rights outright, providing greater stability and control over the event’s intellectual property.

The acquisition will be financed through a tax-exempt revenue bond issuance by the Maryland Economic Development Corporation (MEDCO). Importantly, no General Fund tax dollars will be used for this transaction. Instead, the debt service on the bonds will be backed by future revenues generated from the Preakness Stakes and the Black-Eyed Susan Stakes, including wagering, ticketing, and sponsorship income streams.

Financial analysts at Gardner & Sanderlin have estimated that between $6 million and $7 million annually from the racing industry’s revenues will be allocated to pay off the bonds over a 30-year period, totaling approximately $200 million. State officials have expressed confidence that the Preakness Stakes will generate sufficient revenue each year to cover these payments and break even.

In the event that revenues fall short, the Maryland Jockey Club will serve as a financial backstop, supported by state funds derived from slot machine revenues that traditionally finance horse racing purses. This safety net further mitigates financial risk for the state.

Looking ahead, the Preakness Stakes is expected to return to its historic venue, Pimlico Race Course, next year following renovations. The state’s acquisition of the intellectual property rights is anticipated to provide a more secure foundation for the race’s future operations and branding.

This strategic move by Maryland reflects a broader trend of states seeking greater control over valuable sports and entertainment intellectual property assets. By securing ownership of the Preakness Stakes’ trademarks and associated rights, Maryland aims to protect and enhance the economic and cultural value of this storied horse racing event.