Kentucky Derby gets ‘Yummy sponsorship’

The grandest event in horse racing no longer is the Kentucky Derby. It’s the Kentucky Derby, presented by Pizza Hut. And Taco Bell. And KFC.

Churchill Downs Inc. yesterday announced a five-year deal with Yum Brands, the world’s largest owner of restaurants, that will give the race a presenting sponsor for the first time in its 132-year history.

The race officially will be called the Kentucky Derby, presented by Yum Brands.

Yum Brands, based in Louisville, will be the first sponsor to gain prominence at Churchill Downs, a track better known for tradition, mint juleps and the fancy spring hats of its patrons than for heavy commercialism.

“As an outstanding corporate citizen in our hometown, Yum Brands understands the importance of the Derby’s history and tradition to the residents of our city and region,” said Thomas H. Meeker, president and chief executive officer of Churchill Downs Inc.

Yum Brands owns some of the world’s top fast-food restaurant chains, including Pizza Hut, KFC, Long John Silver’s, A&W; and Taco Bell, but is relatively little-known as a corporate entity. Until now, Yum Brands invested little in corporate sponsorships or advertising.

Yum Brands was formed as a spinoff of Pepsico Inc. in 1997, originally taking the name Tricon. The name was changed to Yum Brands in 2002.

By partnering with the Derby, the company hopes to become more recognizable to individual investors.

“This is a highly targeted and cost-effective way for us to create awareness and interest in Yum around the globe,” said David Novak, chairman and chief executive officer of Yum Brands. “Through this sponsorship, potential investors will know of Yum Brands and begin to associate the company with our leading restaurant brands.”

As part of the sponsorship, Yum Brands will get six 30-second television ads during NBC’s coverage of the Derby on May 6 and two 30-second commercials on ESPN and ESPN2. The Yum logo will appear everywhere at Churchill Downs, including the famed twin spires and on a sign above the starting gate. Jockeys and race organizers also will wear clothing featuring the logo.

Financial terms of the deal were not disclosed, but the agreement comes after a 2005 race that was one of the most watched in history. More than 156,000 people attended the race, making it the second-largest crowd ever at Churchill Downs. Wagering topped $103 million, the first time a North American race broke the $100 million barrier.

Such arrangements are not new to horse racing. Last year, the Belmont Stakes in New York was presented by Argent Mortgage. Credit-card company Visa has been the title sponsor of the Triple Crown over the past decade, offering a $5 million prize to any horse winning all three races. The Bluegrass Stakes in Lexington, Ky., one of the key warm-up races for the Kentucky Derby, also has a title sponsor in Toyota.

Maryland Jockey Club spokesman Mike Gathagan said the Preakness Stakes at Pimlico Race Course in Baltimore is in negotiations for a presenting sponsor and could have one in place by the May 20 race.

This year, the New York Racing Association, which runs the Belmont Stakes, handed over sponsorship to ABC, which will broadcast the race in June. Visa also dropped its sponsorship of the Triple Crown, and a new sponsor is expected to be named later this year.

The purse of the Kentucky Derby, set at $2 million, will not change as a result of the new sponsorship, though some additional prize money could go toward horses involved in other races at Churchill Downs during the spring and fall.

Story Continues →