AURORA, ON/LOUISVILLE, KY, March 5 /CNW/ - North America's leading horse
racing companies, Churchill Downs Incorporated (NASDAQ: CHDN) ("Churchill
Downs") and Magna Entertainment Corp. (NASDAQ: MECA; TSX: MEC.A) ("Magna
Entertainment") today announced a series of customer-focused agreements.
Through the agreements, Magna Entertainment and Churchill Downs hope to
accomplish four objectives:
1. Foster an open and competitive business environment where horse
racing content is readily available to customers through a wide
variety of distribution points and wagering platforms;
2. Create an innovation-based environment of sustainable growth for the
North American horse racing industry domestically and
3. Enhance wagering integrity and security to address horse racing
signal piracy and ensure content creators are compensated; and
4. Benefit the horsemen and racetracks that together create racing
content through new industry growth.
The specific agreements are as follows:
Churchill Downs and Magna Entertainment Form Media Management Company,
TrackNet Media Group LLC, to Buy Content from and Sell Content to Third
Churchill Downs and Magna Entertainment have formed a joint venture
called TrackNet Media Group LLC ("TrackNet Media") through which the full
breadth of the companies' respective horse racing content will be available to
each company's various distribution platforms, including Magna Entertainment's
advance deposit wagering ("ADW") platform, XpressBet(R) (www.xpressbet.com), a
Churchill Downs-owned ADW platform, www.twinspires.com, under development, and
to third parties, including racetracks, OTBs, casinos and other ADW providers.
TrackNet Media will also purchase horse racing content from third parties to
make available through Churchill Downs' and Magna Entertainment's respective
distribution platforms. Both companies believe that a single organization
performing these important functions will promote optimal distribution of
content across a broader spectrum of platforms, including ADW providers,
international outlets and distributors that offer rebates. By creating a
single cost-effective organization to more efficiently buy and sell racing
content, TrackNet Media will have the resources to pursue wagering integrity
and security objectives, with a view toward generating revenue for horsemen
and racetracks that create content.
"Both Churchill Downs and Magna Entertainment believe that our industry
must embrace change and drive innovation to make our products more appealing
to our customers," said Churchill Downs' President and Chief Executive Officer
Robert L. Evans. "We believe that our customers and our industry will benefit
from broader distribution of our racing signals and that integrity and
security with respect to our signals is paramount. We hope other content
owners will endorse our approach in similar reciprocal agreements with
TrackNet Media to ensure the broadest possible distribution of racing content
to markets worldwide."
"To better serve our customers and grow the financial return for our
horsemen, Magna Entertainment and Churchill Downs believe the time has come to
make our simulcast content available through as many trusted and eligible
distribution platforms as possible," said Magna Entertainment Chief Executive
Officer Michael Neuman. "In doing so, we can maximize the content available to
customers and the revenue available to the horsemen and racetracks who create
the industry's content."
Churchill Downs Purchases 50-Percent Interest in HRTV(TM)
In addition, Churchill Downs has purchased a 50-percent interest in Magna
Entertainment's horse racing TV channel, HRTV(TM). Both Churchill Downs and
Magna Entertainment will work to offer as much of their respective live export
simulcast content as possible on HRTV(TM) and will actively explore how the
television medium can be used to more effectively serve horse racing customers
- and the industry as a marketing vehicle. HRTV(TM) will seek additional
content providers who wish to televise their horse racing content alongside
the Churchill Downs and Magna Entertainment content.
As part of its 2007 offerings, HRTV(TM) will broadcast "Target
Louisville," a 30-minute television program highlighting the training,
workouts and final preparations of Kentucky Derby contenders. "Target
Louisville" will air daily during the week leading up to the 133rd Kentucky
Derby at Churchill Downs.
"With the inclusion of Churchill Downs-owned racing content on HRTV(TM),
this television channel becomes a significant destination for horse racing
fans," continued Neuman. "With Magna Entertainment and Churchill Downs serving
as anchor tenants, HRTV(TM) represents a subscriber acquisition opportunity
for carriers and a distribution opportunity for content providers to consider
as their television rights become available."
Churchill Downs to Launch ADW Service, www.twinspires.com
Churchill Downs is currently developing its own ADW platform,
www.twinspires.com, which will launch later this year. The site will offer
racing fans the opportunity to watch and wager on Churchill Downs- and Magna
Entertainment-owned racing content as well as other racing content made
available through TrackNet Media licensing agreements. Customers can visit
www.twinspires.com to learn more about its future offerings and sign up for
e-mail alerts. Churchill Downs will share more information about
www.twinspires.com, including the target date for launch, with customers and
members of the media in the next few weeks.
One of the primary focuses for the companies' joint venture, TrackNet
Media, will be enhanced wagering integrity. TrackNet Media will invest
significant resources to better monitor the entities that have access to the
companies' racing content and wagering pools. TrackNet Media staff will work
closely with domestic and international outlets licensed to simulcast and
accept wagers on TrackNet Media-licensed products to ensure that content
offered through TrackNet Media is being used appropriately and in ways that
provide compensation to the horsemen and racetracks that produce the content.
Third parties will not be allowed to sublicense TrackNet Media content to
other tracks, OTBs, casinos, rebate shops or ADW providers, thereby reducing
the risk of horse racing signal piracy and other integrity issues.
Both Churchill Downs and Magna Entertainment will continue to honor all
existing contractual obligations with respect to their content. TrackNet
Media's ability to license simulcast content from Churchill Downs-owned
racetracks to ADW providers other than the Television Games Network ("TVG")
will commence with the expiration of those tracks' individual TVG agreements.
TrackNet Media will have immediate access to racing signals from Churchill
Downs racetrack for its 2007 Spring Meet, which begins April 28, and to
signals from Fair Grounds Race Course when the track begins its 2007-08 meet
in November 2007. TVG will continue to have access to simulcast content from
Arlington Park through Aug. 6, 2007, and from Calder Race Course through the
end of its 2007-08 racing season, which ends Jan. 2, 2008.
Churchill Downs 2007 Spring Meet will be available on HRTV(TM). Arlington
Park, Calder Race Course and Fair Grounds Race Course will join the HRTV(TM)
line-up as their respective TVG contracts expire.
"We believe the business initiatives we're launching will benefit
customers in many ways, including the optimal distribution of simulcast
content originating from Churchill Downs- and Magna Entertainment-owned
racetracks to other tracks, OTBs, casinos and ADW providers," said Evans. "We
hope other content providers and content licensees will follow our example,
and make their content available as well.
"The transition to a new and more competitive business model may cause
some temporary disruptions for some customers. We acknowledge that and want to
apologize in advance for any inconvenience to them. In the end, we believe
customers will benefit greatly from the approach we're taking, and we
appreciate their patience and understanding."
TrackNet Media will be headquartered in Louisville, Ky. TrackNet Media
and HRTV(TM) will have offices in Louisville and Arcadia, Calif. Scott Daruty,
formerly the chief U.S. counsel for Magna Entertainment, will serve as
TrackNet Media's chief executive officer. Patrick Troutman, who served as vice
president and general manager for the Churchill Downs Simulcast Network
("CDSN") and Churchill Downs Simulcast Productions, will serve as TrackNet
Media's executive vice president. Current members of CDSN's support staff will
join TrackNet Media, as will certain members of MEC's simulcast operations.
Representatives from Magna Entertainment, Churchill Downs and TrackNet
Media will discuss their new customer-focused partnership in a teleconference
with members of the media today (March 5) at 10 a.m. EST. Journalists may
participate in the teleconference by dialing (866) 713-8565 or (617) 597-5324
for international participants and entering the pass code 30351265 at least
10 minutes before the appointed time.
Churchill Downs Incorporated ("Churchill Downs"), headquartered in
Louisville, Ky., owns and operates world-renowned horse racing venues
throughout the United States. Churchill Downs' five racetracks in Florida,
Illinois, Indiana, Kentucky and Louisiana host many of North America's most
prestigious races, including the Kentucky Derby and Kentucky Oaks, Arlington
Million, Princess Rooney Handicap, Louisiana Derby and Indiana Derby.
Churchill Downs' racetracks have hosted seven Breeders' Cup World
Championships. Churchill Downs also owns off-track betting facilities and has
interests in various advance deposit wagering, television production,
telecommunications and racing services companies that support Churchill Downs'
network of simulcasting and racing operations. Churchill Downs trades on the
NASDAQ Global Select Market under the symbol CHDN and can be found on the
Internet at www.churchilldownsincorporated.com.
Magna Entertainment is North America's largest owner and operator of
horse racetracks, based on revenue, including such major venues as Santa Anita
Park, Gulfstream Park and Pimlico Race Course, home of the Preakness Stakes,
the middle jewel of racing's Triple Crown. It develops, owns and operates
horse racetracks and related pari-mutuel wagering operations, including
off-track betting facilities. Magna Entertainment also develops, owns and
operates casinos in conjunction with its racetracks where permitted by law.
Magna Entertainment owns and operates AmTote International, Inc., a provider
of totalisator services to the pari-mutuel industry, XpressBet(R), a national
Internet and telephone account wagering system, as well as MagnaBet(TM)
internationally. Magna Entertainment trades on the NASDAQ Global Select Market
under the symbol MECA and the Toronto Stock Exchange under the symbol MEC.A
and can be found on the Internet at www.magnaent.com.
Magna Entertainment and Churchill Downs previously formed a joint venture
with Racing UK, a media rights company and subscription television channel
owned by 31 leading British racecourses, to operate the international
television channel Racing World, which brings the best North American and
international racing five days a week, six hours a day to British and Irish
viewers. British and Irish customers can wager though the British bookmaker
Victor Chandler. Racing World plans to continue to add additional bookmakers
HRTV(TM) is a 24-hour television network providing up to 15 hours per day
of wire-to-wire coverage of live horse racing action from more than
70 thoroughbred, harness and quarter horse racetracks in the United States,
Canada and Australia. The award-winning network is available from major
satellite and cable companies throughout the country. Additional background
information on HRTV can be found on www.hrtv.com.
Information set forth in this news release contains various
forward-looking statements within the meaning of Section 27A of the Securities
Act of 1933 and Section 21E of the Securities Exchange Act of 1934 and
forward-looking information as defined in the Securities Act (Ontario)
(collectively referred to as "forward-looking statements"). The Private
Securities Litigation Reform Act of 1995 and the Securities Act (Ontario)
provide certain "safe harbor" provisions for forward-looking statements. The
reader is cautioned that such forward-looking statements are based on
information available at the time and/or management's good faith belief with
respect to future events, and are subject to risks and uncertainties that
could cause actual performance or results to differ materially from those
expressed in the statements. Forward-looking statements speak only as of the
date the statement was made. Churchill Downs and Magna Entertainment assume no
obligation to update forward-looking information to reflect actual results,
changes in assumptions or changes in other factors affecting forward-looking
information. Forward-looking statements are typically identified by the use of
terms such as "anticipate," "believe," "could," "estimate," "expect,"
"intend," "may," "might," "plan," "predict," "project," "should," "will," and
similar words, although some forward-looking statements are expressed
differently. Although MEC and Churchill Downs believe that the expectations
reflected in such forward-looking statements are reasonable, Churchill Downs
and Magna Entertainment can give no assurance that such expectations will
prove to be correct. Important factors that could cause actual results to
differ materially from expectations include: the effect of global economic
conditions; the effect (including possible increases in the cost of doing
business) resulting from future war and terrorist activities or political
uncertainties; the economic environment; the impact of increasing insurance
costs; the impact of interest rate fluctuations; the effect of any change in
our accounting policies or practices; the financial performance of our
companies' racing operations; the impact of gaming competition (including
lotteries and riverboat, cruise ship and land-based casinos) and other sports
and entertainment options in those markets in which our companies operate; the
impact of live racing day competition with other racetracks in the
jurisdictions in which our companies operate; costs associated with our
companies' efforts in support of alternative gaming initiatives; costs
associated with Customer Relationship Management or other marketing
initiatives; a substantial change in law or regulations affecting pari-mutuel
and gaming activities; resistance to our business strategies; a substantial
change in allocation of live racing days; our companies' continued ability to
effectively compete for the country's top horses and trainers necessary to
field high-quality horse racing; our companies' continued ability to grow our
share of the interstate simulcast market; our companies' ability to execute
acquisition strategies and to complete or successfully operate planned
expansion projects; our companies' ability to successfully complete any
divestiture transaction; our companies' ability to adequately integrate
acquired businesses; market reaction to our companies' expansion projects; any
business disruption associated with facility renovations or construction at
our companies' operations; the loss of industry totalisator companies or their
inability to provide our companies with assurance of the reliability of their
internal control processes through Statement on Auditing Standards No. 70
audits or to keep their technology current; the need for various alternative
gaming approvals in states where our companies operate; our companies'
accountability for environmental contamination; the loss of key personnel; the
impact of natural disasters, including severe weather on our companies'
operations and the extent of our companies' property and business interruption
insurance coverage for any related losses; any business disruption associated
with a natural disaster and/or its aftermath; and the volatility of our
companies' stock price.
For further information:
For further information: contact: Churchill Downs Incorporated, Julie
Koenig Loignon, Phone: (502) 636-4502, E-mail: email@example.com; Magna
Entertainment Corp., Mike Gathagan, Phone: (310) 470-5461, E-mail: