Exclusive: Maryland seeks ownership of Preakness brand for $85M

Maryland is quietly taking steps to secure rights to the Preakness Stakes’ brand, a move that would cost $85 million but further bind the historic race to the state where it has been run for more than 150 years, according to five sources with knowledge of the state’s plans.

The effort comes nearly a month after Churchill Downs, the Kentucky-based company that owns the Kentucky Derby, announced it was acquiring the intellectual property rights to the Preakness and Black-Eyed Susan Stakes for $85 million.

Maryland’s decision to pursue the rights was not publicly known.

Maryland currently leases the Triple Crown race’s intellectual property rights — including all branding and trademarks — even as it spends public money rebuilding Pimlico Race Course in Baltimore, the event’s longtime home.

That arrangement leaves Maryland in the vulnerable position of spending $400 million to build the Preakness’ new home while leasing rights from a third party for perhaps its most important asset — the name of the race itself.

Now Maryland is moving to secure those rights from 1/ST Maryland LLC, an affiliate of 1/ST Racing, said the sources, who spoke on condition of anonymity because no announcement has been made. The move also raises questions of where the $85 million will come from — state and racing officials declined to say whether that’s settled — and whether the state is equipped to oversee valuable Preakness branding and maximize the asset’s potential.

Officials from the Maryland Stadium Authority and the Maryland Jockey Club, the nonprofit overseeing Maryland thoroughbred racing, declined to comment.

The deal hasn’t been finalized, and the state is performing “due diligence” before closing, according to two sources with direct knowledge of the assessment.

Maryland law allows the state the opportunity to match the deal made by Churchill Downs, whose CEO, Bill Carstanjen, called the Preakness “one of the most iconic brands in American sports.” The state had 60 days from the Churchill Downs agreement to match, which would mean until the third week of June.

First held in 1873, the Preakness is the second leg of the Triple Crown of Thoroughbred Racing and one of the sport’s most recognized events. The Black-Eyed Susan, a premier race for three-year-old fillies, is traditionally run the day before the Preakness at Pimlico Race Course.

The Preakness Stakes is being held this Saturday at Laurel Park because the new Pimlico is not yet constructed.

Joe De Francis, former majority owner and CEO of the Maryland Jockey Club, said in an interview that it was to the state’s advantage to secure branding rights, comparing it to holding the deed to a home.

“I do believe it is Maryland’s interest,” De Francis said. “Maybe the best metaphor I can use is that if you think of the Preakness as a house, Maryland is renting the house. Anyone is better off owning their home if they can afford to do so.”