Churchill, Magna Enter Major Content Agreement
by Tom LaMarra
Date Posted: 3/5/2007 2:03:33 PM
Last Updated: 3/6/2007 1:40:47 PM

Robert L. Evans, Churchill Downs president and CEO, said agreements will benefit customers and the industry.
Photo: Associated Press

Ongoing rumors of a partnership between two racing giants proved accurate March 5 when Churchill Downs Inc. and Magna Entertainment Corp. announced a broad agreement that entails the sharing of content, purchase of a half-interest in a racing network, and creation of a new account wagering (advance deposit wagering) platform.

CDI and MEC have formed a joint venture called TrackNet Media Group through which each company’s content will be available to each other’s various distribution platforms, including the ADW services XpressBet, owned by MEC, and CDI-owned twinspires.com, which is under development in Northern California. CDI also purchased a 50% interest in HRTV, the MEC-owned horse racing television network that is available via satellite and cable television.

CDI president and chief executive officer Bob Evans, who discussed the deal on a March 5 teleconference with members of the media, said it’s all about growth. He said the status quo, by which pari-mutuel handle has grown 1% the past 10 years when inflation is figured in, isn’t acceptable.

“One percent real growth isn’t going to pay anyone’s bills in the years ahead,” Evans said. “This is the first step for putting in place a new industry paradigm.”

MEC chief executive officer Michael Neuman, named to that post in late February, called TrackNet Media Group a “content mall” with CDI and MEC the first “anchor tenants.” He said the goal is to be inclusive, not exclusive, so customers can access all content available in the marketplace.

Evans and his predecessor, Tom Meeker, have said the current system whereby bettors need multiple wagering accounts to access content isn’t user-friendly. Evans and Neuman, however, didn’t say how the new system would work, because it will require other racetracks, horsemen’s groups, and third-party ADW companies to buy into it.

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, Neuman said.

The agreement comes as the longtime partnership between CDI and TVG, the ADW and racing network, is ending. TVG has had exclusive access to CDI racing, and has sub-licensed the product to other ADW providers. The first exclusive TVG contract--for the Churchill Downs product--ends this month.

TVG is available in many more homes than HRTV, but the latter eventually will have a strong content line-up including all CDI and MEC tracks. There remains a chance, however, TVG will be able to broadcast CDI and MEC product if comments from Neuman are an indication.

“I don’t want to presuppose what form a TVG agreement might take,” he said. “We expect we’ll be having these conversations assuming they’re interested. Everything is on the table.”

John Hindman, vice president of communications and general counsel for TVG, said the company had no comment at this time.

An offiicial with Youbet.com, one of the leading ADW companies in the United States, said the company would have no immediate comment on the developments.

CDI races will become available on HRTV as the TVG contracts expire. The Churchill Downs spring meet will be broadcast on HRTV; Arlington Park, Calder Race Course, and Fair Grounds will join the roster as their respective contracts expire this year and early in 2008.

Officials said CDI and MEC would “actively explore how the television medium can be used to more effectively serve horse racing customers and the industry as a marketing vehicle. HRTV will seek additional content providers that wish to televise their horse racing content alongside the Churchill Downs and Magna Entertainment content.”

As part of its 2007 offerings, HRTV will broadcast “Target Louisville,” a 30-minute television program highlighting the training, workouts, and final preparations of Kentucky Derby Presented by Yum! Brands (gr. I) contenders the week of the race. It will be similar to “The Works,” a popular program on TVG that previewed the Derby and 2006 Breeders’ Cup at Churchill Downs.

The CDI account wagering platform will launch later this year. It will offer content from CDI, MEC, and other tracks, Evans said.

Evans indicated the two companies have “addressed” potential anti-trust concerns, and he also said TrackNet Media Group would be “as transparent as we can” when it comes to informing industry stakeholders of host, source-market, and sub-licensing fees that could be charged for signals. Horsemen’s groups in particular have said they are sometimes left out of the contractual process or don’t know where revenue is going.

“We’re not trying to create a secret world here,” Evans said.

CDI owns Arlington Park, Calder Race Course, Churchill Downs, Fair Grounds, and Hoosier Park, which is pending a sale. MEC owns Golden Gate Fields, Great Lakes Downs, Gulfstream Park, Laurel Park, Lone Star Park, Pimlico Race Course, Portland Meadows, Remington Park, Santa Anita Park, and Thistledown.



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