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Peloton announced Thursday that CEO Barry McCarthy will be stepping down and the company will lay off 15% of its staff because it “simply had no other way to bring its spending in line with its revenue.”

McCarthy, a former Spotify and Netflix executive, will become a strategic advisor to Peloton through the end of the year while Karen Boone, the company’s chairperson, and director Chris Bruzzo will serve as interim co-CEOs. Jay Hoag, another Peloton director, has been named the new chairperson of the board. Peloton is seeking a permanent CEO.

The company also announced a broad restructuring plan that will see its global headcount cut by 15%, or about 400 employees. It plans to continue to close retail showrooms and make changes to its international sales plan.

The moves are designed to realign Peloton’s cost structure with the current size of its business, it said in a news release. It’s expected to reduce annual run-rate expenses by more than $200 million by the end of fiscal 2025.

“This restructuring will position Peloton for sustained, positive free cash flow, while enabling the company to continue to invest in software, hardware and content innovation, improvements to its member support experience, and optimizations to marketing efforts to scale the business,” the company said.

Shares were up about 9% in premarket trading.

McCarthy took the helm of Peloton in February 2022 from founder John Foley and has spent the last two years restructuring the business and working to get it back to growth.

As soon as he took over, he began implementing mass layoffs to right size Peloton’s cost structure, closing the company’s splashy showrooms and enacting new strategies designed to grow membership. Contrary to Peloton’s founder, McCarthy redirected Peloton’s attention to its app as a means to capture members who may not be able to afford the company’s pricey bikes or treadmills but could be interested in taking its digital classes.

In a letter to staff, McCarthy said the company needed to implement layoffs because it wouldn’t be able to generate sustainable free cash flow with its current cost structure. Peloton hasn’t turned a profit since December 2020 and it can only burn cash for so long when it has more than $1 billion in debt on its balance sheet.

“Achieving positive [free cash flow] makes Peloton a more attractive borrower, which is important as the company turns its attention to the necessary task of successfully refinancing its debt,” McCarthy said in the memo.

In a letter to shareholders, the company said it is “mindful” of the timing of its debt maturities, which include convertible notes and a term loan. It said it is working closely with its lenders at JPMorgan and Goldman Sachs on a “refinancing strategy.”

“Overall, our refinancing goals are to deleverage and extend maturities at a reasonable blended cost of capital,” the company said. “We are encouraged by the support and inbound interest from our existing lenders and investors and we look forward to sharing more about this topic.”

In a news release, Boone thanked McCarthy for his contributions.

“Barry joined Peloton during an incredibly challenging time for the business. During his tenure, he laid the foundation for scalable growth by steadily rearchitecting the cost structure of the business to create stability and to reach the important milestone of achieving positive free cash flow,” Boone said.

“With a strong leadership team in place and the Company now on solid footing, the Board has decided that now is an appropriate time to search for the next CEO of Peloton.”

In a joint statement, Boone and Bruzzo said they are looking forward to “working in lockstep” with the company’s leadership to ensure it “doesn’t miss a beat while the CEO search is underway.”

Also on Thursday, Peloton announced its fiscal third-quarter results and fell short of Wall Street’s expectations on the top and bottom line. Here’s how the connected fitness company did compared with what Wall Street was anticipating, based on a survey of analysts by LSEG:

Loss per share: 45 cents vs. a loss of 37 cents expected

Revenue: $718 million vs. $723 million expected

The company’s reported net loss for the three-month period that ended March 31 was $167.3 million, or 45 cents per share, compared with a loss of $275.9 million, or 79 cents per share, a year earlier. 

Sales dropped to $718 million, down about 4% from $748.9 million a year earlier. 

Peloton has tried a little bit of everything to get the company back to sales growth. It removed the free membership option from its fitness app, expanded its corporate wellness offerings and partnered with mega-brands like Lululemon to grow membership, but none of the initiatives have been enough to grow sales.

For the ninth quarter in a row, Peloton’s revenue fell during its fiscal third quarter, when compared to the year-ago period. It hasn’t seen sales grow compared to the year ago quarter since December 2021, when the company’s stationary bikes were still in high demand and many hadn’t yet returned to gyms amid the Covid-19 pandemic.

The business is continuing to bleed money and hasn’t turned a net profit since December 2020. 

Last February, McCarthy set a goal of returning the company to revenue growth within a year. When it failed to reach that milestone, McCarthy pushed it back and said he now expects the company to be back to growth in June, at the end of the current fiscal year. 

McCarthy had also expected Peloton to reach positive free cash flow by June — a goal the company said it reached early during its third quarter. It’s the first time Peloton has hit that mark in 13 quarters. In a letter to shareholders, Peloton said it generated $8.6 million in free cash flow but it’s unclear how sustainable that number is.

Last month, CNBC reported that Peloton hadn’t been paying its vendors on time, which could temporarily pad its balance sheet. Data from business intelligence firm Creditsafe showed that Peloton’s late payments to vendors spiked in December and again in February after improving in January.

Part of the reason why Peloton had failed to reach positive free cash flow is because it’s simply not selling enough of its hardware, which is costly to make and has become less popular since the Covid-19 pandemic ended and people returned to gyms.

Shortly after McCarthy replaced Foley, he implemented numerous rounds of layoffs that impacted thousands of employees. The last round of cuts, affecting 500 employees, were announced in October 2022. He later said the company’s restructuring was “complete” and it was instead pivoting to “growth.” 

“We are done now,” McCarthy had said in November 2022 of the layoffs. “There are no more heads to be taken out of the business.”

This post appeared first on NBC NEWS

Arcade giant Dave & Buster’s is set to allow adults 18 and older to place real-time bets with friends on arcade games.

The Dave & Buster’s app will begin to incorporate an option to bet against other players, the company said Tuesday as part of a news release. The arcade company is partnering with Lucra, a company that makes gamification software, and expects to launch the bet feature in the coming months.

‘This new partnership gives our loyalty members real-time, unrivaled gaming experiences, and reinforces our commitment to continuing to elevate our customer experience through innovative, cutting-edge technology,’ Simon Murray, senior vice president of entertainment and attractions at Dave & Buster’s, said in the news release.

A representative for Lucra said that there will be a limit on bets but added that the limit was not something the company could share publicly yet, noting that the average bet between users is $10.

The company also said that it has ‘extensive responsible gaming policies’ and that its partners can configure bet limits.

Dave & Buster’s, which started in 1982, has more than 222 venues in North America, offering everything from bowling to laser tag, plus virtual reality. The company says it has 5 million loyalty members and 30 million unique visitors to its locations each year. The company’s stock is up more than 50% over the past year.

Gambling has in recent years moved from a fringe activity into the mainstream thanks in large part to the legalization of sports gambling in many states, leading to a rush of apps and advertising that has caused some concerns about rises in problem gambling.

The Dave & Buster’s effort appears to be significantly different than sports betting, most notably since players are gambling against each other rather than against the company itself.

Lucra, founded in 2019, makes what it calls ‘gamification services’ that include ‘cash, e-commerce, or cashless contests on partner platforms.’

“We’re creating a new form of kind of a digital experience for folks inside of these ecosystems,” said Michael Madding, Lucra’s chief operating officer. “We’re getting them to engage in a new way and spend more time and money.”

Lucra says its skills-based games are not subject to the same licenses and regulations gambling operators face with games of chance. Lucra is careful not to use the term “bet” or “wager” to describe its games.

“We use real-money contests or challenges,” Madding said.

Lucra’s contests are currently available in 44 states.

The social betting category is a $6 billion industry, according to gaming research firm Eilers & Krejcik. Several companies such as Fliff and Rebet have emerged, hoping to mimic the success of the gambling industry and capture a younger market.

This post appeared first on NBC NEWS

Strong demand and tight supply continue to push home values higher, even though mortgage rates are now moving higher again.

Home prices in February jumped 6.4% year over year, another increase after the prior month’s annual gain of 6%, according to the S&P CoreLogic Case-Shiller national home price index released Tuesday. It was the fastest rate of price growth since November 2022.

The 10-city composite rose 8%, up from a 7.4% increase in the previous month. The 20-city composite saw an annual gain of 7.3%, up from a 6.6% advance in January.

“Following last year’s decline, U.S. home prices are at or near all-time highs,” said Brian Luke, head of commodities, real and digital assets at S&P Dow Jones Indices. “For the third consecutive month, all cities reported increases in annual prices, with four currently at all-time highs: San Diego, Los Angeles, Washington, D.C., and New York.”

Prices in San Diego saw the biggest gain among the 20 cities in the index, up 11.4% from February of 2023. Both Chicago and Detroit reported 8.9% annual increases. Portland, Oregon, saw the smallest gain in the index of just 2.2%.

“The Northeast region, which includes Boston, New York, and Washington, D.C., ranks as the best performing market for over the last half year. As remote work benefitted smaller (and sunnier markets) in the first part of the decade, return to office may be contributing to outperformance in larger metropolitan markets in the Northeast,” according to Luke.

“Since the previous peak in prices in 2022, this marks the second time home prices have pushed higher in the face of economic uncertainty. The first decline followed the start of the Federal Reserve’s hiking cycle. The second decline followed the peak in average mortgage rates last October,” he added.

This index records prices on a three-month moving average, so they go back as far as December, when mortgage rates hit their recent lows. There was also a strong expectation then that the Federal Reserve would lower interest rates. That may have driven buyers to jump in.

Since that time, however, mortgage rates have jumped nearly a full percentage point. In addition, stubborn and persistent inflation has lowered expectations that the Fed will cut rates significantly this year.

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PHOENIX − They departed for their three-city, two-country, 5,400-mile, no day-off, bee-hived road trip with anxieties, questions and fears about whether this international star-studded team may be nothing more than a tease.

Well, 11 days later, the Los Angeles Dodgers returned home early Thursday morning proving once again they are the class of the National League West, and perhaps the most dangerous team in the land.

The Dodgers, after losing three consecutive series to sub-.500 teams in their last homestand, lived up to every bit of their preseason hype. They stopped in the nation’s capital in Washington, D.C., grabbed their passports for Toronto and returned to Phoenix where their season died a year ago. They not only won seven of nine games, but pummeled the opposition by a combined score of 53-19.

So, what’s wrong with the Dodgers?

Absolutely nothing.

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“People expect us to win every game,’’ Dodgers sensation Mookie Betts told USA TODAY Sports. “They expect us to hit homers every at-bat. It’s like we’re not humans.

“It’s a silly game. You’re going to have ups and downs no matter who you are. It’s inevitable. Remember, this game is based off failure, not success. It’s good to have those expectations though. The guys we have in here, the coaches, we have a lot of confidence.

“But we got to go play.’’

The Dodgers were relentless on their magical mystery tour where Shohei Ohtani was booed for snubbing Toronto, Yoshinobu Yamamoto was questioned whether he seriously considered signing in New York, and a beehive relentlessly awaited to attack their mojo until a Phoenix beekeeper came to the rescue.

The Dodgers’ bats exploded at the top of the order, while the middle and even the bottom of the order proved to be just as lethal. Rookie outfielder Andy Pages, starting every game of the trip, hit .364 with five extra-base hits and seven RBI in his last eight games. He was joined by Miguel Rojas and Enrique Hernandez, who started six of the nine games, with the bottom-of-the-order trio hitting .333 with a .386 on-base percentage.

“The whole lineup,’’ said catcher Austin Barnes, “just kind of took off.’’

The Dodgers scored at least eight runs in four of their games, and for the first time in 18 years went one entire game without striking out.

“Andy’s a big part of that [success],’’ Roberts said. “Once he got called up, the bottom part of the order solidified and became more productive. I think you look at these nine games and the production the bottom half of the lineup has given us, that narrative should be silenced a little bit. It’s been big, really big for us.’’

The Dodgers rotation yielded a 2.45 ERA on the trip, including the resurgence of Yamamoto. The same guy who was hammered for five earned runs in one inning in his major league debut in South Korea against the San Diego Padres pitched six shutout innings Wednesday and is now 3-0 with a 1.64 ERA and 0.97 WHIP since his debut.

“I think I’m being able to keep myself very calm,’’ Yamamoto said, “and that’s one of the biggest reasons I’m being able to execute my pitches. There are some differences between here and Japan such as the PitchCom, pitch clock. I think I’m getting myself used to it, and I’m feeling more comfortable.’’

The bullpen, which lost setup man Ryan Brasier with a strained calf Monday, was lights out on the trip, yielding a 1.11 ERA.

And of course, there is Betts, who had five multiple-hit games on the trip with a .512 on-base percentage. He’s the runaway MVP one month into the season, hitting a league-leading .377 with a .481 on-base percentage, 1.104 OPS, 49 hits, 29 runs and 26 walks.

“He just conducts professional at-bats,’’ Roberts says, “and that’s a perfect recipe for an MVP-type season.’’

Oh, and about all the concern and apprehension whether he could handle being an everyday shortstop after not playing the position regularly since high school?

The dude looks like he’s played there his whole life, and will continue being their everyday shortstop for the foreseeable future while Rojas slides to second base along with Gavin Lux.

“To his credit,’’ Roberts says, “he really raised his level of play. Certainly, right now, he’s an above-average shortstop. I grade him out as a solid B-plus. It’s hard to imagine that given where he started. It’s really, really impressive.’

When the Dodgers step on the field to play Atlanta for a three-game series Friday at Dodger Stadium, their fans may not even recognize this juggernaut.

Certainly, it hardly resembles the team that stunk up the joint up the last time they were in town.

“There’s an expectation when you come to the Dodgers,’’ veteran reliever Daniel Hudson says, “that you should win 60 to 70 percent of your games. The boo-birds come out, and it’s justified. I’d probably boo if I were a fan, too. We lost three straight series at home, seven of 10 games, and we played like [expletive].

“The expectations this organization has brought upon a good fan base. They expect us to win almost every game. When we don’t, we go on a little run where we lose seven of 10 games, everyone is surprised by it, including us.

“But this group is just so professional that we all knew we would turn it around at some point.’’

And somewhere along the way, on a road trip they thought would never end, it happened.

They jelled into the team they envisioned all along.

“You look back 11 days ago and we’re in a tough spot,’’ Roberts said. “We weren’t playing good baseball. To go on the road with an East Coast trip, to go north of the border, and then come back here and play a divisional rival and end up 7-2, it was a nice feat. Offensively, we were really good the entire road trip, and then the pitching, the defense, has been the best we’ve had all year. …

“Everybody likes playing at home, but sometimes it’s nice to get on the road, and it’s just the guys coming together.’’

The Dodgers, 20-13, suddenly have a bulging 4 ½-game lead in the NL West, with no one else in the division having a winning record.

“The Dodgers,’’ Diamondbacks manager Torey Lovullo says, “are just an unbelievable team.’’

The scary part is that they’re going to even get better. Walker Buehler, one of the finest talents in the game, is scheduled to start for them Monday for the first time since June 2022. Starter Bobby Miller and veteran reliever Blake Treinen are expected to be activated later this month. Three-time Cy Young winner Clayton Kershaw is scheduled to return after the All-Star break and starter Dustin May could potentially come back before the season’s conclusion.

“This team, we don’t let the external factors get to us,’’ said Dodgers closer Evan Phillips, who has eight saves and a 0.77 ERA. “We know we’re a good team. We know we have the talent. We’re not going to let anything get in our way.’’

It helps having that $700 million man hitting second in the order, too, with Shohei Ohtani.

Ohtani hit .250 on the trip with two homers and six RBI while striking out eight times and grounding into three double plays. He was out of the starting lineup Wednesday after striking out three times the previous night.

Yet, even when Ohtani proves to be human, and slumps like everyone else, his sheer presence is a huge factor.

“I’m not saying that Ohani is Barry [Bonds],’’ Roberts said, “but when I played against Barry, it was like he was always looming. Ohtani is just like that. I can’t imagine the stress it puts on opposing teams knowing that he’s looming. He’s always there. It’s got to be stressful.’’

The same goes for the Dodgers.

They are always looming, winning the NL West title 10 of the last 11 years, and already given a 99% chance to be playing in October again.

“On paper, people might think we’re going to go 162-0,’’ Hernandez said. “But in baseball, there’s a bunch of ups and downs and it’s all about figuring out a way to make the downs as short as possible.

“It took us a little second there to get going again, but we’re rolling right now.

“I don’t think we have even reached our best yet, but once that happens, look out, this team is going to be special.’’

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This post appeared first on USA TODAY

Two jockeys were hospitalized Thursday after an incident caused them to fall from their horses during the second race at Churchill Downs.

Irving Moncada and Emmanuel Giles had to be carted off the dirt track via ambulance after falling from their mounts near the far turn during a 1 1/16-mile, $20,000 maiden claiming race.

Moncada, riding Territoriality, was knocked unconscious, his agent, Joe Paulley, told The Louisville Courier Journal, part of the USA TODAY Network. Nearly two hours after post time (1:15 p.m.), Paulley said Moncada had regained consciousness at UofL Hospital and was undergoing scans. Moncada was released from the hospital with the all clear Thursday evening.

Spectators near the final turn told The Courier Journal that Moncada never moved while being loaded onto a gurney and into the ambulance.

Giles was also taken to UofL Hospital. His agent, Nancy Bahena, told The Courier Journal that Giles has pain in his shoulders and spine. They are waiting now on X-rays and CT scans.

Back in the receiving barn, while a state veterinarian evaluated Vostra, trainer Jeffrey Jones told The Courier Journal no one would give him an update on Giles, Vostra’s jockey. Jones also said he didn’t know what caused the spill.

Martin Chuan, aboard Valerie Blue, was disqualified for his role in it after a steward’s inquiry. He was bumped to last in the 10-horse race.

Another jockey who participated in the race said Chuan went into a spot with no room. According to a race recap in Equibase, Territoriality ‘clipped an outer rival’s hind heels and fell’ leaving the 5/16 pole. She ran free toward the finish line before an outrider caught her.

Vostra, the recap says, ‘struck a fallen foe’ and lost Giles around the 5/16 pole. The filly also was caught by an outrider before being led back to the receiving barn.

Martin Garcia, who rode Fasta Lavista Baby to victory, told The Courier Journal he was lucky his filly was able to jump around the incident when it occurred right in front of him.

Neither Territoriality nor Vostra was injured in the spill, Churchill’s equine medical director, Dr. Will Farmer, told The Courier Journal.

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The week of Tiger Woods continues.

A day after his Sun Day Red brand was made available to the public – which he promoted on various talk shows – the United States Golf Association announced on Thursday that Woods was receiving a special exemption to play the 2024 U.S. Open at Pinehurst No. 2 in North Carolina, June 13-16.

While the PGA Championship and Masters offer lifetime exemptions to past champions, the U.S. Open does not. Woods is currently No. 789 in the Offical World Golf Ranking, and his five-year exemption after his 2019 Masters victory has run out.

The 48-year-old will make his 23rd U.S. Open start this year and first since 2020, when he missed the cut at Winged Foot. Woods is a three-time U.S. Open champion in 2000 (Pebble Beach), 2002 (Bethpage Black) and 2008 (Torrey Pines) and has finished inside the top 10 eight times.

So far this year Woods has withdrawn from his Genesis Invitational and finished 60th at the Masters, where he set the all-time record for consecutive cuts made at Augusta National. Woods is also expected to play the 2024 PGA Championship later this month, May 16-19, at Valhalla Golf Club in Louisville, Kentucky.

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INDIANAPOLIS — After missing out on their first opportunity to close out a playoff series for the first time since 2014, the Indiana Pacers weren’t about to let another slip by at home. The Milwaukee Bucks had Damian Lillard back in action, but the Pacers still throttled Milwaukee 120-98 at Gainbridge Fieldhouse in Game 6 of their series on Thursday night, clinching a 4-2 series win to move on to the Eastern Conference semifinals.

The series win marks the Pacers’ first since they beat the Washington Wizards in six games in the 2014 Eastern Conference semifinals. The Pacers will play either the Knicks or the 76ers with Game 6 of that series happening later Thursday night. Indiana’s second-round series will begin Monday.

Here are four observations from Thursday’s closeout victory:

Even with Damian Lillard back, Pacers’ defense steps up

The Pacers spent most of the day not certain if they would see one or both of the Bucks’ All-NBA superstars. It wasn’t official until about an hour before tip-off that Giannis Antetokounmpo would not play, but about a half-hour before that, news broke that Lillard would return after missing the last two games with an Achilles issue.

Lillard managed to get his points, scoring 28 points on 7 of 16 shooting, but guards Andrew Nembhard and T.J. McConnell made him work for those. Forward Bobby Portis and center Brook Lopez also scored 20 points each, but overall the Pacers’ defensive performance was one of their strongest of the season.

Milwaukee shot 35 of 83 from the floor (42.2%) including 7 of 27 from 3-point range. They finished with 1.04 points per possession and only one quarter over 25 points.

Obi Toppin catches fire

Obi Toppin has had some bright moments in these playoffs and he entered Game 6 averaging 10.7 points per game in the playoffs on 47.7% shooting, but he was 6 of 22 from 3-point range.

On Thursday, though, he was a force as both a rim runner and an outside shooter as he has been for much of this season.

Playing extended minutes thanks to foul trouble for center Myles Turner and starting forwards Pascal Siakam and Aaron Nesmith, Toppin scored 21 points on 8 of 15 shooting, knocking down 3 of 10 3-pointers. He also grabbed eight rebounds and was plus-9 in 24 minutes.

Toppin helped the Pacers’ bench outscore Milwaukee’s 50-10.

T.J. McConnell had his best performance of the playoffs

After the best season of his nine-year career and one of the best of any substitute in the NBA this season, McConnell struggled throughout the first five games of this series. Prior to Game 6, McConnell was averaging 7.4 points and 3.6 assists per game and shooting just 37% from the floor. And the man who once led the league in total steals for a season didn’t record a single theft.

The Pacers were a combined minus-32 in five games when McConnell was on the floor. During the regular season, he was plus-95, second only to Toppin among the players who ended the year on the Pacers’ bench.

On Thursday, McConnell seemed plenty motivated to change the direction of his postseason. He frequently guarded and harassed Lillard when he was on the floor and he was back to his pesky ways in the backcourt on defense. He stayed in attack mode on offense and got fortunate rolls on the short jumpers that he hasn’t always hit this series.

In the first half, McConnell was 2 of 3 from the floor and 4 of 4 at the line for eight points to go with six assists and three steals in 11 minutes. The Pacers were plus-11 in his minutes.

And in the second half, he was even better. McConnell drilled a 3-pointer right before the end of the third quarter and another early in the fourth with the Bucks having left him alone because the 3-ball is not usually his strong suit. That got him even more motivated for paint attacks. He finished with 20 points on 7 of 9 shooting, nine assists and four steals and was plus-22 for the game.

Pascal Siakam dominates in second half

After he scored a combined 71 points in the first two games of the series, the Bucks started committing more and more double teams to Pascal Siakam and he didn’t find it anywhere near as easy to work, scoring 17 points or fewer in each of the last three games and shooting 43% or under in all three of them. The attention didn’t let up in Game 6, and at halftime, Siakam had just four points on 2 of 4 shooting.

But with exceptional ball movement, the Pacers managed to find Siakam in more advantageous positions in the second half, he got some of his mid-range and outside shooting back and he managed some easy paint buckets and returned to the form of the go-to option he was for the early part of the series. He scored 15 points on 7 of 11 shooting in the second half and finished with 19 points for the game, making 9 of 15 total field goals.

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Seven years after a woman alleges that Dak Prescott sexually assaulted her, Dallas police announced Thursday that they will not pursue charges against the Cowboys quarterback.

An investigation determined there wasn’t enough evidence against Prescott to proceed with the case.

‘I want to thank the Dallas Police Department and Dallas County District Attorneys’ office for their thorough investigation of the allegations against Dak Prescott,’ the quarterback’s attorney, Levi McCathern, said in a statement. ‘As we knew they would, they found nothing in their extensive exploration of the facts that would support a criminal prosecution.’

The news comes the same week that the accuser’s attorney, Yoel Zehaie, filed a motion to dismiss Prescott’s lawsuit against the accuser. Prescott is seeking $1 million in response to what his attorney’s claim was an extortion attempt on the woman’s behalf. They maintain that the woman asked for $100 million to drop the sexual assault allegation.

The women’s attorney also filed a countersuit in civil court.

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McCathern said in a statement on Thursday, ‘We are confident that at the end of law enforcement’s investigation into the extortion case that they will find the accuser and her attorneys just as guilty as Dak is innocent.

‘As I have said from the beginning, Dak is a great football player, and an even better human. He would never assault any woman. These false accusations were brought up 7 years after the alleged events for one reason and one reason only — to line the pockets of the accuser and her attorneys. Their behavior is an affront to all the true survivors of sexual assault.’

Zehaie told WFAA-TV in Dallas this week that Prescott’s lawsuit ‘was meant to silence his sexual assault victim’ and ‘is in violation of Texas’s Anti Slapp Statute which prohibits different forms of retaliatory lawsuits.’

Zehaie added in a statement on Thursday, according to ESPN, ‘We are proceeding with our counterclaims, even though Levi McCathern is using every tactic to prevent us from going to court.’

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LOUISVILLE, Ky. – Sometime in the early evening here Saturday, dusk will settle over Churchill Downs’ picturesque twin spires, and more than 100,000 people leaving the grounds in various states of intoxication and perspiration will return to real life from this once-a-year fantasy world that gets bigger, ritzier and more in-demand every year. 

The party will be over. The 150th Kentucky Derby will have been run. And the two-minute horse race they will have seen and wagered millions of dollars on will, in many ways, have been completely incidental to the experience they came to be part of. 

It works that way here, year after year, because the Derby is an enduring American tradition that seems to have only grown bigger and bigger no matter the circumstances surrounding it, from wars to economic depressions to, perhaps most surprising of all, the rise and fall of thoroughbred racing itself as a significant entity in the nation’s sporting landscape.

“It’s the one mainstay we can really rely on,” said Todd Pletcher, a two-time Derby winner who trains Saturday’s likely betting favorite, Fierceness. 

But this celebration of everything the Derby has been since its first running in 1875 takes place amidst cross-currents that explain the complicated place horse racing finds itself in 2024: A stunning lack of uniformity and organization in the sport’s management across the national landscape; a desperate fear of horses dying on racing’s most visible day and never-ending controversy surrounding Churchill Downs’ role as both a publicly traded company with a nearly $9.5 billion market cap and the Derby’s heavy-handed gatekeeper.

Yet undergirding all of it are two undeniable facts: The first Saturday in May is the one time everybody pays attention, and the Kentucky Derby is the one race everybody who gets involved in horse racing wants to win. 

Churchill Downs aggressively protects lucrative Derby

Has the Derby’s prominence been good for the sport as a whole? It depends on who you ask, but many in the industry will point to the fact that Churchill abandoned its horse racing business at tracks it owned, like Calder in Miami (now a casino); sold off Hollywood Park in Los Angeles in a deal that eventually doomed its horse racing operation (it’s now the site of SoFi Stadium) and ended racing at Arlington Park as part of a deal to sell the land to the Chicago Bears. 

Meanwhile, as part of the 150th Derby celebration, Churchill Downs this week unveiled its new $200 million showpiece paddock, whose primary function is to create more premium seating and dining areas for Derby week that will fetch upwards of $7,000 per person for the weekend. 

“Horse racing is less relevant as a sport now, and if you look back 10, 20, 30, 40 years ago, it’s been kind of a continual decline,” said Craig Bernick, who now runs the Ocala, Florida-based Glen Hill Farm that his grandfather founded as a racing and breeding operation in the 1960s. ‘But the Derby itself has really been able to buck that trend. It’s a major, major event. Churchill, they’ve done an amazing job for their business, for their shareholders. It’s been an unbelievable wealth creation for Churchill. And the only horse race they care about is the Derby.

“They’ve invested in areas where they can get casinos, and they’ve got a great business model for making money. But it hasn’t been beneficial to the sport as a whole. And I don’t think that’s ever been their intention. Their intention is to make money, which they do.”

The aggressive way Churchill protects this one-of-a-kind, money-printing asset that comes around once a year strikes at the heart of this year’s bête noire: The third consecutive absence of six-time Derby winning trainer Bob Baffert and a horse named Muth, who would have been among the favorites Saturday were he allowed to run.

The Churchill-Baffert dispute stems from what would have been Baffert’s record-setting seventh Derby win on May 1, 2021, when 12-1 Medina Spirit crossed the finish line a half-length in front of 27-1 Mandaloun. 

A week later, Medina Spirit tested positive for a small amount of the corticosteroid betamethasone, leading to his eventual disqualification. Baffert claimed that the positive test was the result of an anti-fungal ointment used to treat a skin condition and that he was unaware it contained a banned substance. On June 2, 2021, Churchill hit Baffert with a two-year ban from entering a horse at any track owned by the company, noting five medication violations over the previous year associated with Baffert horses.

Baffert, for his part, has long claimed that any positive tests were inadvertent, usually attributing them to environmental contamination or, in a couple of 2020 cases, transferred to the horse via the hands of one of his staff members from a lidocaine patch on his back. Baffert has vehemently denied that he ever doped horses. 

Nevertheless, Churchill’s harsh suspension was widely viewed as proper given Baffert’s prominence within the game and the industrywide sense that horse racing urgently needed to clean up its act after years of damaging publicity surrounding doping cases and horse deaths. It was also upheld as legal by a U.S. District Court judge in February 2023, which should have brought the matter to an end with Baffert returning to the Derby in 2024. 

Bob Baffert ‘served his time and they extended it’

But on July 3 of last year, Churchill announced that Baffert’s ban had been extended at least another year, saying: “A trainer who is unwilling to accept responsibility for multiple drug test failures in our highest-profile races cannot be trusted to avoid future misconduct.’ This, presumably, was in reference to the fact that Baffert and Medina Spirit’s owner continued to pursue legal recourse to overturn the disqualification, and Baffert continuing to maintain his innocence in media appearances. 

If the original suspension was fair, adding another year on top of it – without any new violations – was seen in some quarters of the industry as unchecked bullying. It also came on the heels of a disastrous Derby week in 2023 in which two horses from the barn of trainer Saffie Joseph died, prompting Churchill to immediately suspend him and scratch his entry, Lord Miles, out of the Derby. 

Two months later, Joseph was cleared and reinstated as necropsies showed nothing conclusive about the incidents. Baffert, however, remained banned. 

“They made him the poster boy for what was happening,’ said four-time Derby winning trainer D. Wayne Lukas. “They put him right out there and made a house rule, and he served his time and they extended it. I thought that whole thing got out of hand.

‘My personal feeling is, management didn’t want that to be a story for the 150th Derby. If Bob was running, he would have been a lot of the story, and I think they felt that, because he really, really should be here.”

The way the Baffert-Churchill dispute has played out has once again put a spotlight on the hodgepodge, somewhat arbitrary nature of rules surrounding horse racing compared to other sports. 

Try to imagine, for instance, if NBA commissioner Adam Silver slapped another 15 games onto a player’s standard 25-game performance-enhancing drug suspension because the player didn’t show enough contrition in media interviews. You can’t imagine it because it simply wouldn’t happen. In pro sports, all of these issues are collectively bargained and standardized for the good of the sport. In horse racing, the motivations are entirely different. 

“Churchill Downs is a multibillion-dollar brand that wants to do everything they can to protect their brand,” said Kip Cornett, a longtime thoroughbred owner and horse player who founded one of the leading ad agencies in Kentucky. “And whether it’s Bob Baffert or any trainer that they feel like is compromising the value of that brand, they have shareholders that they answer to. So I understand their desire to protect their brand in any way possible, because I understand the value of a brand that they have. It’s one of the most powerful brands in sports.”

What’s confusing, though, is that the Horseracing Integrity and Safety Authority (HISA) was enacted by Congress in 2020 as a regulatory body to, in essence, establish national standards on a variety of safety issues – from racetrack conditions to injury reporting to anti-doping and medication rules, rather than the state-by-state fiefdoms that made regulation of the sport wildly inconstant.

As of last May, HISA was fully operational with its anti-doping program, and while there have been some critics and bumps in the road, it has generally been a welcome development in this beleaguered industry.

Within the context of standardization as a national goal enshrined into federal law, it might seem odd that Baffert and owner Amr Zedan now sit on the sideline, readying Muth for the Preakness, where they’re allowed to race in two weeks while being unable to bring their horse to the Derby by decree of Churchill Downs Inc.

In a last-ditch legal effort to get Muth eligible for the Derby, Zedan and attorney John Quinn argued that extension of the ban was the result of nothing more than a personal vendetta against Baffert by Churchill CEO Bill Carstanjen. And in a phone interview last week, Quinn said Zedan had invested significant amounts of money over the past two years in 1- and 2-year-old horses, anticipating that Baffert would be allowed to return when his suspension was over. 

In the end, their legal effort to get Muth in the starting gate was unsuccessful. Once again, Churchill prevailed in a Kentucky court – albeit with a request from Circuit Judge Mitch Perry for the two sides to work together and reach an agreement to end the Baffert standoff. 

After the decision, Quinn said Zedan had a “very pleasant” phone conversation with Churchill’s chairman of the board, Alex Rankin. It’s unclear, though, where things go from here. 

‘He’ll want to have a horse in that race’

The 150th Derby will be run on Saturday without Zedan, Baffert and Muth. And maybe more importantly, the party will go on. 

“We think (they) made an arbitrary, unfair decision which is keeping one of the best horses from the most important race in the country, and we kind of hope as a result of this experience the folks at Churchill Downs will look themselves in the mirror and recognize this isn’t good for horse racing, good for them and that they’ll be more careful in the future,” Quinn said. 

For Zedan, the Los Angeles-born Saudi Arabian investor, it is the second time he has been on the wrong end of Derby heartbreak.

After deciding alongside Baffert in January to drop their final legal appeal to restore Medina Spirit’s victory, Zedan has officially been taken out of the record books as a Derby-winning owner. And now he’ll never even get the chance with Muth, who looked like a real contender for the roses with a dominating win in the Arkansas Derby. 

But the allure of the Kentucky Derby and its paradoxical role in this troubled sport endures as deeply as the race itself. Given the years of bitterness and legal wrangling with Churchill Downs, will Zedan try again for Derby 151?

“Mr. Zedan’s goal has always been, and only been, to have the best horses – including his horses that qualify – racing in the No. 1 horse race in the country,” Quinn said. “And that’s the Kentucky Derby at Churchill Downs. That was his intention this year, and I’m sure that’ll be his intention next year. He’ll want to have a horse in that race.”

This post appeared first on USA TODAY

Former President Donald Trump moves from the courtroom in New York City to the banquet rooms in South Florida on Friday, as he headlines a gathering of top Republican donors and teams up with potential running mates.

Trump starts his day in a Manhattan courtroom, where the former president is being tried on nearly three-dozen state felony charges for falsifying business records in relation to hush-money payments during the 2016 election he made to Stormy Daniels to keep quiet about his alleged affair with the adult film actress.

Trump has repeatedly denied falsifying business records as well as the alleged sexual encounter with Daniels.

But the conclusion of court on Friday will free the former president to travel home to Palm Beach, Florida, where he’ll be the main attraction at the Republican National Committee’s (RNC) Spring Donor Retreat.

The closed-to press gathering – held at the Four Seasons Hotel in Palm Beach and at Trump’s Mar-a-Lago club a few miles north – comes as he aims to close his fundraising gap with President Biden in their 2024 election rematch.

And listed as ‘special guests’ at the confab are a number of Republican politicians considered to be on Trump’s shortlist for running mate, according to an agenda of the weekend’s events obtained by Fox News.

‘This event takes on even greater significance in light of the fact that the President is constrained from travel due to his trial. While at the same time, Biden can travel all over the country to raise money,’ Republican Jewish Coalition CEO Matt Brooks told Fox News

Brooks, who has close ties to the GOP donor class, said that ‘major donors are stepping up now in a big way as we watch in horror the nightly images on TV of our country spiraling out of control.’ 

And he predicted that ‘this weekend will be a huge success.’

Among those listed as ‘special guests’ are possible running mates Sens. Tim Scott of South Carolina, JD Vance of Ohio, and Marco Rubio of Florida. So are Govs,. Doug Burgum of North Dakota and Kristi Noem from South Dakota. Two top Trump supporters in the House – Reps. Elise Seefanik of New York and Byron Donalds of Florida – will also be there, as will entrepreneur and former 2024 presidential candidate Vivek Ramaswamy.

Also attending the gathering are the recently Trump-installed leadership at the RNC – chair Michael Whatley and the former president’s daugther-in-law Lara Trump, who is co-chair of the national party committee. House Speaker Mike Johnson is also attending, as will a handful of top GOP Senate candidates.

While Trump’s team won’t say whether the former president will hold one-on-one meetings with the potential running mates during the weekend confab, it’s not hard to imagine that such encounters may occur.

While the appearance of the potential vice presidential candidates will grab media attention, those involved in the gathering say fundraising is the emphasis.

‘The events this weekend are really more about raising money for the presidential race than it is about auditions for the potential VP candidates,’ a Republican strategist with ties to Trump world told Fox News.

Trump campaign senior adviser Brian Hughes told Fox News the gathering ‘is certainly an opportunity for a collection of the most dynamic leaders of our common sense movement to demonstrate the winning messages we have to end Biden’s weak and dangerously dishonest presidency. Those who financially support President Trump and the America First agenda will see that they are helping save our nation with victory in November.’

The Biden campaign took aim at Trump ahead of the RNC donor retreat.

‘Donald Trump will spend the weekend off the campaign trail again, hiding behind closed doors with billionaire donors, boot lickers, abortion banners, Social Security cutters, and a puppy killer,’ Biden campaign spokesperson James Singer charged.

The ‘puppy killer’ reference was to South Dakota’s Noem, whose anecdote in her upcoming book about shooting and killing a family dog has stirred controversy amid plenty of media attention.

This post appeared first on FOX NEWS