Maryland Blocks Churchill Downs' $85M Preakness Stakes IP Deal
The State of Maryland invoked a legal right to match Churchill Downs' $85M offer for Preakness Stakes trademarks, effectively seizing control of the iconic race.
If you thought horse racing drama was limited to what happens on the track, think again. The State of Maryland just dropped a legal maneuver that stops Churchill Downs Incorporated dead in its tracks — at least when it comes to owning the Preakness Stakes brand.
Churchill Downs (Nasdaq: CHDN) had previously announced a deal to buy the intellectual property rights to the Preakness Stakes and the Black-Eyed Susan Stakes from 1/ST Maryland LLC, an affiliate of 1/ST Racing, for $85 million. That package included the trademarks and all associated rights tied to two of Maryland's most storied racing events. Sounds like a done deal, right? Not so fast.
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Maryland notified Churchill Downs that it intends to exercise a right of first refusal buried in state law — specifically Maryland Code Ann. Bus. Reg. §11-520(d) — which allows the state to step in and match any purchase price for the Preakness IP Rights. By matching CDI's $85 million figure, Maryland effectively cuts the Louisville-based racing giant out of the transaction entirely. Think of it like a real estate right of first refusal: the seller had a deal, but the state gets to swoop in at the same price.
For Churchill Downs, this is a notable setback. The company, which already owns Churchill Downs Racetrack and the Kentucky Derby brand, had appeared poised to expand its control over Triple Crown-adjacent intellectual property. Owning the Preakness name and trademarks would have been a significant strategic asset in the growing sports entertainment and wagering landscape. Maryland's move signals that the state views the Preakness as a public asset worth protecting — and is willing to spend big to keep it that way.
What happens next in the ownership transition — and what Maryland plans to do with the IP — remains to be seen, but this is shaping up to be one of the more unusual business stories in American horse racing in recent memory. Continue reading at GlobalNewswire.
